UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SeptemberJune 30, 2017
Commission file number: 333-218746
LAS VEGAS XPRESS, INC. | |
(Exact name of Registrant as Specified in its Charter) |
Nevada | 88-0203182 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number) |
2381 St Rose Pkwy, Suite 205
Las Vegas,Henderson, NV 8912389052
(Address of principal executive offices)
(702) 583-6715481-2343
(Registrant'sRegistrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act
Title of Each Class | Trading Symbol(s) | Name of each Exchange on which registered | ||
N/A | N/A | N/A |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X]☐ No [ ]
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]☒ No [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" andfiler," "smaller reporting company"company," or “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ☐ | Non-accelerated filer | ☐ | |
Accelerated filer | ☐ | Smaller reporting company | ☒ | |
Emerging growth company | ☐ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes [ ]☐ No [X]
Number of outstanding shares of common stock as of November 14, 2017June 19, 2020 was 568,197,993.
TABLE OF CONTENTS
PAGE | ||||
Item 1. | Financial Statements: | |||
Balance Sheets – | 3 | |||
4 | ||||
5 | ||||
Statements of Cash Flows | ||||
6 | ||||
7 | ||||
Management's Discussion and Analysis of Financial Condition and Results of Operations | 14 | |||
18 | ||||
19 | ||||
20 | ||||
20 | ||||
20 | ||||
20 | ||||
20 | ||||
21 | ||||
22 | ||||
| 2 | ||
LAS VEGAS XPRESS, INC. X RAIL ENTERTAINMENT, INC.
BALANCE SHEETSHEETS (Unaudited)
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ | 4,700 | $ | 202,169 | ||||
| Prepaid Expenses | 11,725 | - | ||||||
| Deposits | 235 | - | ||||||
| Total current assets | 16,660 | 202,169 | ||||||
| Property and equipment, net of accumulated depreciation | 125,000 | 833,160 | ||||||
| Total assets | $ | 141,660 | $ | 1,035,329 | ||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 44,800 | $ | 78,890 | ||||
| Accrued expenses | 292,977 | 76,234 | ||||||
| Unearned revenue | 1,107 | - | ||||||
| Notes payable to related parties | 440,753 | 348,825 | ||||||
| Current portion of convertible notes payable, net of debt discount | 304,376 | 210,946 | ||||||
| Derivative liability | 26,889 | - | ||||||
| Total current liabilities | 1,110,902 | 714,895 | ||||||
| Long-term portion of convertible debt, net of current portion | - | - | ||||||
| Total liabilities | 1,110,902 | 714,895 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders' equity (deficit) | ||||||||
| Preferred stock, $0.00001 par value, 2,011,000 shares authorized, 98,880 and 98,798 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 1 | 1 | ||||||
| Common stock, $0.00001 par value, 1,000,000,000 shares authorized, 246,226,161 and 208,353,303 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively | 2,463 | 2,084 | ||||||
| Additional paid-in capital | 9,602,722 | 8,284,510 | ||||||
| Accumulated (deficit) | (10,574,428 | ) | (7,966,161 | ) | ||||
| Total stockholders' equity | (969,242 | ) | 320,434 | |||||
| Total liabilities and stockholders' equity | $ | 141,660 | $ | 1,035,329 | ||||
| June 30, |
| December 31, | |||||
| 2019 |
| 2018 | |||||
| ||||||||
Assets | ||||||||
| ||||||||
Current assets |
| |||||||
Cash |
| $ | 405 |
| $ | 3,088 |
| |
Total current assets |
| 405 |
| 3,088 | ||||
| ||||||||
Total assets |
| $ | 405 |
| $ | 3,088 | ||
| ||||||||
Liabilities and Stockholders' Equity (Deficit) | ||||||||
| ||||||||
Current liabilities |
| |||||||
Accounts payable |
| $ | 77,094 |
| $ | 57,037 |
| |
Accrued expenses |
| 2,391,395 |
| 2,151,867 |
| |||
Accrued expenses - related parties |
| 55,076 |
| 45,918 |
| |||
Unearned revenue |
| - |
| 1,516 |
| |||
Notes payable - related parties |
| 518,520 |
| 445,045 |
| |||
Notes payable |
| 4,515 |
| 2,969 |
| |||
Convertible notes payable (net of debt discount of $18,082 and $65,001, respectively) |
| 305,976 |
| 399,111 |
| |||
Derivative liability |
| 143,678 |
| 336,825 |
| |||
Total current liabilities |
| 3,496,254 |
| 3,440,288 |
| |||
Total liabilities |
| 3,496,254 |
| 3,440,288 | ||||
| ||||||||
Commitments and contingencies | ||||||||
| ||||||||
Shareholders' equity (deficit) |
| |||||||
Preferred stock, $0.00001 par value, 2,011,000 shares authorized, 98,800 and 98,800 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively |
| 1 |
| 1 |
| |||
Common stock, $0.00001 par value, 10,000,000,000 shares authorized, 3,518,465,736 and 742,331,965 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively |
| 35,185 |
| 7,423 |
| |||
Additional paid-in capital |
| 19,597,704 |
| 19,375,323 |
| |||
Accumulated (deficit) |
| (23,128,739 | ) |
| (22,819,947 | ) | ||
Total shareholders' equity (deficit) |
| (3,495,849 | ) |
| (3,437,200 | ) | ||
Total liabilities and shareholders' equity (deficit) |
| $ | 405 |
| $ | 3,088 | ||
| ||||||||
See accompanying notes to these condensed financial statements | ||||||||
| 3 |
| Table of Contents |
LAS VEGAS XPRESS, INC.X RAIL ENTERTAINMENT, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended | Three months ended | Nine months ended | Nine months ended | |||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues | $ | - | $ | - | $ | 32,259 | $ | - | ||||||||
| Cost of sales | - | - | (46,051 | ) | - | |||||||||||
| Gross loss | - | - | (13,792 | ) | - | |||||||||||
| Operating Expenses: | ||||||||||||||||
| Compensation and payroll taxes | $ | 137,569 | $ | 210,842 | $ | 391,274 | $ | 1,702,480 | ||||||||
| Selling, general and administrative | 72,429 | 56,213 | 272,977 | 162,238 | ||||||||||||
| Professional fees | 101,313 | 48,094 | 565,438 | 188,681 | ||||||||||||
| Total expenses | 311,311 | 315,149 | 1,229,689 | 2,053,399 | ||||||||||||
| Loss from operations | (311,311 | ) | (315,149 | ) | (1,243,481 | ) | (2,053,399 | ) | ||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (133,630 | ) | (70,121 | ) | (727,727 | ) | (89,019 | ) | ||||||||
| Derivative gain (expense) | 1,764 | - | (7,789 | ) | - | |||||||||||
| Loss on disposition of assets | (629,270 | ) | - | (629,270 | ) | - | ||||||||||
| Total other income (expense) | (761,136 | ) | (70,121 | ) | (1,364,786 | ) | (89,019 | ) | ||||||||
| Net income (loss) from operations before provision for income taxes | (1,072,447 | ) | (385,270 | ) | (2,608,267 | ) | (2,142,418 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net income (loss) | $ | (1,072,447 | ) | $ | (385,270 | ) | $ | (2,608,267 | ) | $ | (2,142,418 | ) | ||||
| Net income (loss) per share, basic and diluted | (0.0048 | ) | (0.002 | ) | (0.012 | ) | (0.013 | ) | ||||||||
| Weighted average number of common shares outstanding, basic and diluted | 223,173,591 | 194,251,646 | 218,006,563 | 169,407,177 | ||||||||||||
|
| Three months ended |
|
| Three months ended |
|
| Six months ended |
|
| Six months ended |
| ||||
|
| June30, |
|
| June 30, |
|
| June30, |
|
| June 30, |
| ||||
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues |
|
| - |
|
| $ | - |
|
| $ | - |
|
| $ | 13,145 |
|
Cost of sales |
|
| - |
|
|
| - |
|
|
| - |
|
|
| (8,754 | ) |
Gross profit (loss) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 4,391 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and payroll taxes |
|
| 76,250 |
|
|
| 272,497 |
|
|
| 230,000 |
|
|
| 2,618,747 |
|
Selling, general and administrative |
|
| 8,826 |
|
|
| 82,570 |
|
|
| 33,151 |
|
|
| 125,467 |
|
Professional fees |
|
| 59,154 |
|
|
| 315,270 |
|
|
| 102,453 |
|
|
| 431,849 |
|
Total expenses |
|
| 144,230 |
|
|
| 670,337 |
|
|
| 365,604 |
|
|
| 3,176,063 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| (144,230 | ) |
|
| (670,337 | ) |
|
| (365,604 | ) |
|
| (3,171,672 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess derivative liability expense |
|
| - |
|
|
| (60,801 | ) |
|
| - |
|
|
| (60,801 | ) |
Interest expense |
|
| (28,210 | ) |
|
| (612,937 | ) |
|
| (80,173 | ) |
|
| (679,095 | ) |
Gain on change in value of derivative liability |
|
| 52,767 |
|
|
| 630,403 |
|
|
| 136,985 |
|
|
| 1,141,640 |
|
Total other income (expense) |
|
| 24,557 |
|
|
| (43,335 | ) |
|
| 56,812 |
|
|
| 401,744 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from operations before provision for income taxes |
|
| (119,673 | ) |
|
| (713,672 | ) |
|
| (308,792 | ) |
|
| (2,769,928 | ) |
Provision for income taxes |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net income (loss) |
| $ | (119,673 | ) |
| $ | (713,672 | ) |
| $ | (308,792 | ) |
| $ | (2,769,928 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per share, basic and diluted |
| $ | (0.00 | ) |
| $ | (2.87 | ) |
| $ | (0.00 | ) |
| $ | (14.57 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding, basic and diluted |
|
| 2,935,945,128 |
|
|
| 248,528 |
|
|
| 2,030,916,301 |
|
|
| 190,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to these condensed financial statements | ||||||||||||||||
| 4 |
| Table of Contents |
STATEMENTS OF CASH FLOWS
| ` | Unaudited | Unaudited | ||||||
Nine months ended | Nine months ended | |||||||
| September 30, | September 30, | |||||||
| 2017 | 2016 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (2,608,267 | ) | $ | (2,142,418 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Conversion of notes payable and accrued interest to capital | 88,395 | - | ||||||
| Common stock issued for services | 130,000 | 1,263,702 | ||||||
| Derivative expense related to convertible note payable | 26,889 | - | ||||||
| Warrant expense | 499,196 | - | ||||||
| Amortization of debt discount on convertible notes payable | 156,330 | 45,639 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts payable and accrued expenses | 182,653 | 58,680 | ||||||
| Unearned revenue | 1,107 | - | ||||||
| Prepaid expenses and deposits | (11,960 | ) | - | |||||
| Net cash used in operating activities | (1,535,657 | ) | (774,397 | ) | ||||
| Cash flows from investing activities | ||||||||
| Purchases of property and equipment | - | (19,240 | ) | |||||
| Write off property and equipment | 708,160 | - | ||||||
| Net cash used in investing activities | 708,160 | (19,240 | ) | |||||
| Cash flows from financing activities | ||||||||
| Repayments on convertible notes payable | (82,000 | ) | - | |||||
| Proceeds from convertible notes payable | 19,100 | 490,000 | ||||||
| Repayments on related party notes payable | (53,344 | ) | (164,716 | ) | ||||
| Proceeds from related party notes payable | 145,272 | - | ||||||
| Proceeds from stock purchases | 421,000 | 237,500 | ||||||
| Proceeds from exercise of warrant | 180,000 | - | ||||||
| Net cash provided by financing activities | 630,028 | 562,784 | ||||||
| Net change in cash | (197,469 | ) | (230,853 | ) | ||||
| Cash, beginning of the period | 202,169 | 325,057 | ||||||
| Cash, end of the period | $ | 4,700 | $ | 94,204 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Income taxes paid | $ | - | $ | - | ||||
| Supplemental disclosure of non-cash investing and financing transactions: | ||||||||
| Conversion of related party debt to capital | $ | - | $ | - | ||||
| Conversion of notes payable and accrued interest to capital | 88,395 | 5,000 | ||||||
| Debt discount on convertible notes | 205,224 | 490,000 | ||||||
| Additional | ||||||||||||||||||||||||||||
| Common Stock | Preferred Stock | Paid-in | Accumulated | |||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Total | ||||||||||||||||||||||
| Balance January 1, 2016 | 4,557,784 | $ | 46 | 98,798 | $ | 1 | $ | 5,835,346 | $ | (5,398,691 | ) | $ | 436,702 | |||||||||||||||
| Stock issued for employees compensation | 16,791,611 | 168 | - | - | 1,185,243 | - | 1,185,411 | |||||||||||||||||||||
| Stock issued for notes conversion | 200,000 | 2 | - | - | 4,998 | - | 5,000 | |||||||||||||||||||||
| Stock issued per Share Exchange Agreement | 151,885,189 | 1,519 | - | - | (1,519 | ) | - | 0 | ||||||||||||||||||||
| Stock issued for cash | 33,894,719 | 339 | - | - | 738,772 | - | 739,111 | |||||||||||||||||||||
| Stock issued for services | 1,024,000 | 10 | - | - | 71,670 | - | 71,680 | |||||||||||||||||||||
| Value of warrants allocated to notes | - | - | - | - | 450,000 | - | 450,000 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (2,567,470 | ) | (2,567,470 | ) | |||||||||||||||||||
| Balance January 1, 2017 | 208,353,303 | $ | 2,084 | 98,798 | $ | 1 | $ | 8,284,510 | $ | (7,966,161 | ) | $ | 320,434 | |||||||||||||||
| Stock issued for services | 1,460,000 | 15 | 4 | - | 129,985 | - | 130,000 | |||||||||||||||||||||
| Stock issued for notes conversion | 21,600,000 | 216 | - | - | 81,784 | - | 82,000 | |||||||||||||||||||||
| Stock issued for interest conversion | 127,889 | 1 | - | - | 6,394 | - | 6,395 | |||||||||||||||||||||
| Stock issued for cash | 11,620,000 | 116 | - | - | 420,884 | - | 421,000 | |||||||||||||||||||||
| Stock issued for warrant exercise | 1,200,000 | 12 | - | - | 179,988 | - | 180,000 | |||||||||||||||||||||
| Stock issued for shares exchange | 1,880,969 | 19 | (19 | ) | - | |||||||||||||||||||||||
| Stock cancelled | (16,000 | ) | (0 | ) | (2 | ) | - | - | - | - | ||||||||||||||||||
| Warrants expense | - | - | - | - | 499,196 | - | 499,196 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (2,608,267 | ) | (2,608,267 | ) | |||||||||||||||||||
| Balance September 30, 2017 | 246,226,161 | $ | 2,463 | 98,800 | $ | 1 | $ | 9,602,722 | $ | (10,574,428 | ) | $ | (969,242 | ) | ||||||||||||||
FOR THE THREE AND NINESIX MONTHS ENDED SEPTEMBERJUNE 30, 20172019 AND 2016
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
| Additional |
|
|
|
|
|
|
| |||||||
|
| Common Stock |
|
| Preferred Stock |
|
| Paid-in |
|
| Accumulated |
|
|
|
| |||||||||||||
|
| Shares |
|
| Amount |
|
| Shares |
|
| Amount |
|
| Capital |
|
| Deficit |
|
| Total |
| |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||||||
Balance December 31, 2017 |
|
| 118,049 |
|
| $ | 1 |
|
|
| 98,800 |
|
| $ | 1 |
|
| $ | 12,968,634 |
|
| $ | (15,351,533 | ) |
| $ | (2,382,897 | ) |
Stock issued for compensation |
|
| 121,000 |
|
|
| 1 |
|
|
| - |
|
|
| - |
|
|
| 2,184,999 |
|
|
| - |
|
|
| 2,185,000 |
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (2,056,256 | ) |
|
| (2,056,256 | ) |
Balance March 31, 2018 |
|
| 239,049 |
|
| $ | 2 |
|
|
| 98,800 |
|
| $ | 1 |
|
| $ | 15,153,633 |
|
| $ | (17,407,789 | ) |
| $ | (2,254,153 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for compensation |
|
| 12,166 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 96,247 |
|
|
| - |
|
|
| 96,247 |
|
Stock issued for services |
|
| 25,000 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 200,000 |
|
|
| - |
|
|
| 200,000 |
|
Stock issued for notes and interest conversion |
|
| 15,109 |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 51,300 |
|
|
| - |
|
|
| 51,300 |
|
Warrants expense |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| 400,000 |
|
|
| - |
|
|
| 400,000 |
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (713,672 | ) |
|
| (713,672 | ) |
Balance June 30, 2018 |
|
| 291,324 |
|
| $ | 2 |
|
|
| 98,800 |
|
| $ | 1 |
|
| $ | 15,901,180 |
|
| $ | (18,121,461 | ) |
| $ | (2,220,278 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance December 31, 2018 |
|
| 742,331,965 |
|
| $ | 7,423 |
|
|
| 98,800 |
|
| $ | 1 |
|
| $ | 19,375,323 |
|
| $ | (22,819,947 | ) |
| $ | (3,437,200 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for compensation |
|
| 775,000,000 |
|
|
| 7,750 |
|
|
| - |
|
|
| - |
|
|
| 69,750 |
|
|
| - |
|
|
| 77,500 |
|
Stock issued for notes and interest conversion |
|
| 1,025,758,503 |
|
|
| 10,258 |
|
|
| - |
|
|
| - |
|
|
| 110,267 |
|
|
| - |
|
|
| 120,525 |
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (189,119 | ) |
|
| (189,119 | ) |
Balance March 31, 2019 |
|
| 2,543,090,468 |
|
| $ | 25,431 |
|
|
| 98,800 |
|
| $ | 1 |
|
| $ | 19,555,340 |
|
| $ | (23,009,066 | ) |
| $ | (3,428,294 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock issued for notes and interest conversion |
|
| 975,375,268 |
|
|
| 9,754 |
|
|
| - |
|
|
| - |
|
|
| 42,364 |
|
|
|
|
|
|
| 52,118 |
|
Net loss |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
|
| (119,673 | ) |
|
| (119,673 | ) |
Balance June 30, 2019 |
|
| 3,518,465,736 |
|
| $ | 35,185 |
|
|
| 98,800 |
|
| $ | 1 |
|
| $ | 19,597,704 |
|
| $ | (23,128,739 | ) |
| $ | (3,495,849 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to these condensed financial statements | ||||||||||||||||||||||||||||
| 5 |
| Table of Contents |
STATEMENTS OF CASH FLOWS
(Unaudited)
|
| Six months ended |
|
| Six months ended |
| |||
|
| June 30, |
|
| June 30, |
| |||
|
| 2019 |
|
| 2018 |
| |||
|
|
|
|
|
|
| |||
Cash flows from operating activities |
|
|
|
|
|
| |||
Net loss |
| $ | (308,792 | ) |
| $ | (2,769,928 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
| |
Amortization of debt discount on notes payable |
|
| 46,919 |
|
|
| 120,811 |
| |
Common stock issued for services |
|
| - |
|
|
| 200,000 |
| |
Common stock issued for compensation |
|
| 77,500 |
|
|
| 2,281,247 |
| |
Change in face value of derivative liability related to convertible note payable |
|
| (136,985 | ) |
|
| (1,141,640 | ) | |
Excess derivative liability expense |
|
|
|
|
|
| 60,801 |
| |
Warrant expense |
|
| - |
|
|
| 400,000 |
| |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
| |
Accounts payable and accrued expenses |
|
| 236,012 |
|
|
| 680,131 |
| |
Accrued expenses - related parties |
|
| 9,158 |
|
|
| 11,090 |
| |
Unearned revenue |
|
| (1,516 | ) |
|
| (1,586 | ) | |
|
|
|
|
|
|
|
|
| |
Net cash (used in) operating activities |
|
| (77,704 | ) |
|
| (159,074 | ) | |
|
|
|
|
|
|
|
|
| |
Cash flows from investing activities |
|
|
|
|
|
|
|
| |
Net cash provided by (used in) investing activities |
|
| - |
|
|
| - |
| |
|
|
|
|
|
|
|
|
| |
Cash flows from financing activities |
|
|
|
|
|
|
|
| |
Proceeds from convertible notes payable |
|
| - |
|
|
| 154,100 |
| |
Repayments on convertible notes payable |
|
| - |
|
|
| (46,550 | ) | |
Repayments on related party notes payable |
|
| - |
|
|
| (9,933 | ) | |
Proceeds from related party notes payable |
|
| 73,475 |
|
|
| 5,344 |
| |
Proceeds from notes payable |
|
| 1,546 |
|
|
| - |
| |
Net cash provided by financing activities |
|
| 75,021 |
|
|
| 102,961 |
| |
|
|
|
|
|
|
|
|
| |
Net change in cash |
|
| (2,683 | ) |
|
| (56,113 | ) | |
Cash, beginning of the period |
|
| 3,088 |
|
|
| 56,983 |
| |
Cash, end of the period |
| $ | 405 |
|
| $ | 870 |
| |
|
|
|
|
|
|
|
|
| |
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
|
| |
Income paid with cash |
| $ | - |
|
| $ | - |
| |
Income taxes paid |
| $ | - |
|
| $ | - |
| |
|
|
|
|
|
|
|
|
| |
Supplemental disclosure of non-cash investing and financing transactions: |
|
|
|
|
|
|
|
| |
Conversion of notes payable and accrued interest to capital |
| $ | 172,643 |
|
| $ | 51,300 |
| |
Debt discount on convertible notes |
| $ | - |
|
| $ | 120,811 |
| |
|
|
|
|
|
|
|
|
| |
See accompanying notes to these condensed financial statements | |||||||||
| 6 |
| Table of Contents |
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 2019 AND 2018
(Unaudited)
(1) | Summary of Significant Accounting Policies |
Going Concern:
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As shown in the accompanying financial statements, the Company has net loss of $308,792 for the six months ended June 30, 2019. The Company also has an accumulated deficit of $23,128,739 and basisa negative working capital of presentation
While we expect the impacts of COVID-19 to have an adverse effect on our business, financial condition and results of operations, we are unable to predict the extent or nature of these impacts at this time.
Management is attempting to raise additional equity and debt to sustain operations until it can market its services and achieves profitability. The successful outcome of future activities cannot be determined at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.
The accompanying financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Basis of Financial Statement Presentation:
The accompanying unaudited interim financial statements of X Rail Entertainment,Las Vegas Xpress, Inc. (the "Company") are condensed and have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States of America ("GAAP"(“GAAP”) for complete financial statements. These statements reflect all normal and recurring adjustments which, in the opinion of management, are necessary to present fairly the financial position, results of operations and cash flows of the Company for the interim periods presented. However, the results of operations for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 20172019 or any other future period. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016.
Risks and Uncertainties:
The Company operates in ana rail industry that is subject to intense competition and potential government regulations. Significant changes in regulations and the inability of the Company to establish contracts with rail services providers could have a materially adverse impact on the Company'sCompany’s operations.
Use of Estimates:
The preparation of financial statements in conformity with GAAP requires 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 the reported amounts of revenues and expenses during the reported periods.
The Company expensesconsiders all purchaseshighly liquid instruments with a maturity of equipment with individual coststhree months or less at the time of under $500, and these amounts are not materialissuance to the financial statements.be cash equivalents. As of SeptemberJune 30, 2017, we recorded2019 and December 31, 2018, the rail cars on the balance sheet at $125,000 with no accumulated depreciation. The rail cars are currently not depreciated as they are notCompany had $405 and $3,088 in servicecash and not ready to run. The rail cars require substantial investment to retrofit. cash equivalents, respectively.
Related Parties:
The Company expensed the carrying value of 10 rail cars as they were exchanged for unpaid storage charges. The amount written off was $629,270 as of September 30, 2017.
Income Taxes:
Deferred tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The deferred tax assets of the Company relate primarily to operating loss carryforwards for federal income tax purposes. A full valuation allowance for deferred tax assets has been provided because the Company believes it is not more likely than not that the deferred tax asset will be realized. Realization of deferred tax assets is dependent on the Company generating sufficient taxable income in future periods.
The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of SeptemberJune 30, 2017,2019 and December 31, 2016,2018, the Company has not established a liability for uncertain tax positions.
Basic and Diluted Loss per Share:
In accordance with Financial Accounting Standards Board Accounting Standards Codification ("(“FASB ASC"ASC”) 260, "Earnings“Earnings per Share,"” the basic income (loss) per common share is computed by dividing the net income (loss) available to common stockholders by the weighted average common shares outstanding during the period. Diluted earnings per share reflect per share amounts that would have resulted if diluted potential common stock had been converted to common stock. Common stock equivalents have not been included in the earnings per share computation for the three and ninesix months ended SeptemberJune 30, 2017,2019 and 20162018 as the amounts are anti-dilutive.anti-dilutive due to net losses. As of SeptemberJune 30, 2017,2019, the Company had 14,978,0001,436 outstanding warrants and convertible debt of $509,600, before debt discount of $205,224,$324,058, which were all excluded from the computation as they were anti-dilutive.anti-dilutive and are convertible into 5,997,561,071 shares of common stock. As of December 31, 2016,2018, the Company had 9,000,0003,426 outstanding warrants and convertible debt of $572,500,$464,112, before debt discount of $361,554,$65,001, which were all excluded from the computation as they were anti-dilutive.
Revenue Recognition:
The Company recognizes revenue from the sale of services in accordance with ASC 606, “Revenue Recognition,” only when all of the following criteria have been met:
(i) | Identify the contract(s) with a customer; | |
(ii) | Identify the performance obligations in the contract(s); | |
(iii) | Determine the transaction price; | |
(iv) | Allocate the transaction price to the performance obligations in the contract(s); | |
(v) | Recognize revenue when the Company satisfies a performance obligation. |
Fair Value of Financial Instruments:
The Company’s financial instruments consist primarily of cash, prepaid expense, accounts payable and accrued liabilities, accrued expenses, convertible notes and notes payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments.
| 8 |
| Table of Contents |
The Company adopted ASC Topic 820, Fair Value Measurements (“ASC Topic 820”), which defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. The standard provides a consistent definition of fair value which focuses on an exit price that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard also prioritizes, within the measurement of fair value, the use of market-based information over entity specific information and establishes a three-level hierarchy for fair value measurements based on the nature of inputs used in the valuation of an asset or liability as of the measurement date.
The three-level hierarchy for fair value measurements is defined as follows:
Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets; liabilities in active markets;
Level 2 – inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability other than quoted prices, either directly or indirectly, including inputs in markets that are not considered to be active; or directly or indirectly including inputs in markets that are not considered to be active;
Level 3 – inputs to the valuation methodology are unobservable and significant to the fair value measurement
The following table summarizes fair value measurements by level at June 30, 2019 and December 31, 2018, measured at fair value on a recurring basis:
June 30, 2019 |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Derivative Liabilities |
| $ |
|
| $ |
|
| $ | 143,678 |
|
| $ | 143,678 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018 |
| Level 1 |
|
| Level 2 |
|
| Level 3 |
|
| Total |
| ||||
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative Liabilities |
| $ |
|
| $ |
|
| $ | 336,825 |
|
| $ | 336,825 |
| ||
Share Based Payment:
The Company issues stock, options, and warrants as share-based compensation to employees and non-employees.
The Company accounts for its share-based compensation to employees and non-employees in accordance FASB ASC 718. Stock-based compensation cost is measured at the grant date, based on the estimated fair value of the award, and is recognized as expense over the requisite service period.
During the six months ended June 30, 2019 and 2018, the Company accounts for share-basedincurred $77,500 and $2,281,247 in stock- based compensation issued to non-employees and consultants in accordance with the provisions of FASB ASC 505-50 "Equity - Based Payments to Non-Employees." Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The final fair value of the share-based payment transaction is determined at the performance completion date. For interim periods, the fair value is estimated and the percentage of completion is applied to that estimate to determine the cumulative expense recorded.
The Company values stock compensation based on the market price on the measurementgrant date. As described above, for employees this is the date of grant, and for non-employees, this is the date of performance completion.
Variables | Values | |||
| Exercise Price | $ | 0.15 | ||
| Risk Free Rate | .92% to 1.07 | % | ||
| Discount rate | 0.25 | % | ||
| Volatility | 666.26% - 634.49 | % | ||
Variables |
| Values as of June 30, 2019 |
|
| Values as of June 30, 2018 |
| ||
Stock price |
| $ | 0.0001 |
|
| $ | 4.00 |
|
Exercise Price |
| $ | 750 |
|
| $ | 750 |
|
Term |
| 0.66-1.23 years |
|
| 1.66-2.84 years |
| ||
Risk Free Rate |
|
| 0.25 | % |
|
| 0.25 | % |
Volatility |
| 579.6% - 674.6 | % |
| 262.9% - 616.2 | % | ||
| 9 |
| Table of Contents |
During the six months ended June 30, 2019, the Company that have been issued butdid not yet adopted byissue any shares of common stock for outside services. During the six months ended June 30, 2018, the Company asissued 25,000 shares of Septembercommon stock for outside services valued at $200,000.
During the six months ended June 30, 2017,2019 and through2018, the dateCompany issued 2,001,133,771 shares of this filing.
(2) | Related Party Notes Payable |
The Company acquires on-going funding on an as-needed basis from related parties that include the following.
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Rail cars (not in service) | $ | 125,000 | $ | 833,160 | ||||
| Less: accumulated depreciation | - | - | ||||||
| $ | 125,000 | $ | 833,160 | |||||
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand | $ | 49,910 | $ | 55,994 | ||||
| Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand | 39,101 | 52,240 | ||||||
| Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand | 74,044 | 78,359 | ||||||
| Promissory note, dated September 30, 2015, bearing no interest, payable on demand | 155,798 | 162,232 | ||||||
| Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand | 53,700 | - | ||||||
| Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand | 49,800 | - | ||||||
| Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand | 18,400 | - | ||||||
| $ | $ 440,753 | $ | 348,825 | |||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2019 |
|
| 2018 |
| ||
|
|
|
|
|
|
| ||
Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand |
| $ | 53,070 |
|
| $ | 41,810 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand |
|
| 33,863 |
|
|
| 24,101 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand |
|
| 74,981 |
|
|
| 53,994 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated September 30, 2015, bearing no interest payable on demand |
|
| 336,371 |
|
|
| 308,814 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand |
|
| 70,976 |
|
|
| 59,044 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand |
|
| 4,335 |
|
|
| 3,200 |
|
Total notes payable, including accrued interest |
|
| 573,596 |
|
|
| 490,963 |
|
Less accrued interest |
|
| (55,076 | ) |
|
| (45,918 | ) |
Net notes payable |
| $ | 518,520 |
|
| $ | 445,045 |
|
For the six months ended June 30, 2019, proceeds from related parties totaled $73,475, and interest of $9,158 was accrued. For the six months ended June 30, 2018, proceeds from related parties were $5,344 and repayments were $9,933, while interest of $11,090was accrued.
| 10 |
| Table of Contents |
(3) | Convertible Notes Payable |
The following summarizes the book value of the convertible notes payable outstanding as of SeptemberJune 30, 20172019 and December 31, 2016:
| September 30, | December 31, | |||||||
| 2017 | 2016 | |||||||
| Promissory note, dated April 30, 2008, bearing interest at 10% annually, payable on demand, convertible to shares of common stock at $.05 per share** | $ | 80,500 | $ | 82,500 | ||||
| Promissory note, dated May 12, 2016, bearing interest at 10% annually, payable within a year, convertible to shares of common stock at $.05 per share | - | 60,000 | ||||||
| Promissory note, dated May 19, 2016, bearing interest at 10% annually, payable within a year, convertible to shares of common stock at $.05 per share | - | 20,000 | ||||||
| Promissory note, dated May 20, 2016, bearing interest at 10% annually, payable within a year, convertible to shares of common stock at $.05 per share* | 20,000 | 20,000 | ||||||
| Promissory note, dated May 31, 2016, bearing interest at 10% annually, payable within a year, convertible to shares of common stock at $.05 per share* | 40,000 | 40,000 | ||||||
| Promissory note, dated June 3, 2016, bearing interest at 10% annually, payable within a year, convertible to shares of common stock at $.05 per share* | 350,000 | 350,000 | ||||||
| Promissory note, dated June 2, 2017, bearing interest at 4% annually, payable within a year, convertible to common stock at a discount of 40% off the lowest traded price of the common stock during 45 trading days prior the conversion date. | 19,100 | - | ||||||
| Convertible notes before debt discount | 509,600 | 572,500 | ||||||
| Less debt discount | (205,224 | ) | (361,554 | ) | ||||
| Total outstanding convertible notes payable | $ | 304,376 | $ | 210,946 | ||||
|
| June 30, |
|
| December 31, |
| ||
|
| 2019 |
|
| 2018 |
| ||
|
|
|
|
|
|
| ||
Promissory note, dated June 2, 2017, bearing interest of 4% annually, payable within a year, convertible to common stock at a discount of 40% of the lowest traded price of the common stock during 45 trading days prior to the conversion date. Note is currently in default. |
|
| 18,260 |
|
|
| 19,100 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand, convertible to common stock at the discount of 35% of the lowest traded price of the common stock during 20 trading days prior to the conversion. Note is currently in default. |
|
| 12,000 |
|
|
| 12,000 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated November 27, 2017, with principal amount of $85,000 and aggregate purchase price of $79,900 , bearing interest of 12% annually, payable within a year, convertible to common stock at the conversion price equal to the lower of (i) the closing sale price of the common stock on the principal market on the trading day immediately preceding the closing date, and (ii) 50% of either the lowest sale price for the common stock during the 20 consecutive trading days including and immediately preceding the conversion date Note is currently in default. |
|
| 19,580 |
|
|
| 68,396 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated December 20, 2017, bearing interest of 12% annually, payable on September 20, 2018, convertible to common stock at a discount of 50% of the lowest two traded prices of the common stock during the 25 trading days prior to the conversion date. Note is currently in default with interest rate increased to 24%. |
|
| 68,686 |
|
|
| 112,000 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated April 17, 2018, bearing interest of 8% annually, payable on October 17, 2018, convertible to common stock at $15. Note is currently in default with interest rate increased to 24%. |
|
| 67,916 |
|
|
| 75,000 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated April 20, 2018, bearing interest of 12% annually, payable on April 20, 2019, convertible to common stock at a discount of 50% of the average closing bid of the common stock during the 10 trading days prior to the conversion date. Note is currently in default. |
|
| 50,000 |
|
|
| 50,000 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated April 30, 2018, bearing interest of 12% annually, payable on April 30, 2019, convertible to common stock at a discount of 50% of the average closing bid of the common stock during the 10 trading days prior to the conversion date. Note is currently in default. |
|
| 50,000 |
|
|
| 50,000 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated January 5, 2018, bearing interest of 10% annually, payable on July 5, 2018, convertible to common stock at a discount of 25% of the average of 5 lowest traded prices of the common stock during the 10 trading days prior to the conversion date. Note is currently in default. |
|
| 37,616 |
|
|
| 37,616 |
|
|
|
|
|
|
|
|
|
|
Promissory note, dated November 14, 2018, bearing interest of 14% annually, payable on August 30, 2019, convertible to common stock at a discount of 45% of the one lowest traded price of the common stock during the 25 trading days prior to the conversion date. |
|
| - |
|
|
| 40,000 |
|
|
|
|
|
|
|
|
|
|
| Convertible notes before debt discount |
|
| 324,058 |
|
|
| 464,112 |
|
|
|
|
|
|
|
|
|
|
Less debt discount |
|
| (18,082 | ) |
|
| (65,001 | ) |
|
|
|
|
|
|
|
|
|
| Total outstanding convertible notes payable |
| $ | 305,976 |
|
|
| 399,111 |
|
During the six months ended June 30, 2019, the Company converted on November 8, 2017. The company issued$140,054 convertible note principal and $32,589 in interest ($172,643 total 66,967,499 shares of restricted common stock for conversion of promissory notes of $410,000 and corresponding interest of $59,675.
During the six months ended June 30, 2018, the Company received proceeds of $154,100 from convertible notes, and made repayments of $46,550, and recorded debt discount amortization of $120,811. The Company also converted $140,055 in convertible note principal and 3,438,112$20,249 in interest ($51,300 total debt) into 15,109 shares of common stock (Note 5).
| 11 |
| Table of Contents |
(4) | Derivative Instruments |
The Company analyzed the conversion option for derivative accounting consideration under ASC 815, “Derivatives and Hedging,” and determined that the convertible notes should be classified as a liability since the conversion option becomes effective at issuance resulting in there being no explicit limit to the number of shares to be issued for accrued interest.
The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, notes payable andCompany determined our derivative liabilities. Derivative liabilities are recorded at fair value. The principal balance of notes payable approximatesto be a Level 3 fair value because current interest ratesmeasurement and terms offeredused the Black-Scholes pricing model to calculate the Company for similar debt are substantially the same.
| Stock Price | $ | 0.045 | ||
| Exercise Price | $ | 0.027 | ||
| Life in Years | 0.7 | |||
| Annualized Volatility | 310.72 | % | ||
| Annual Rate of Quarterly Dividends | 0.00 | % | ||
| Discount Rate - Bond Equivalent Yield | 0.120 | % |
|
| Six Months Ended |
|
| Year Ended |
| ||
|
| June 30, 2019 |
|
| December 31, 2018 |
| ||
Expected term |
| 0.00- 1.23 years |
|
| 0.4 – 0.96 years |
| ||
Expected average volatility |
|
| 615.5 | % |
|
| 313.6 | % |
Expected dividend yield |
|
| - |
|
|
| - |
|
Risk-free interest rate |
| 1.65–2.97 | % |
| 1.28–1.76 | % | ||
The Company valued the conversion feature using the Black-Scholes valuation model. The fair value of the derivative liability for all the notes that were convertible as of June 30, 2019 and December 31, 2018 amounted to $143,678 and $336,825, respectively.
(5) | Equity |
Common and Preferred Stock
The Company is authorized to issue 1,000,000,00010,000,000,000 shares of common stock and 1,000,000 shares of preferred A (each share convertible on one for one base for common stock, no voting rights), 10,000 shares of preferred A-2 convertible into four times the sum of all shares of common stock issued and outstanding with the same voting rights), 1,000,000 shares of preferred B (each share converted into 10 shares of common stock and has 10 votes for any election) and 1,000 shares of preferred C class.class (each share is not convertible and has voting rights equal to four time the sum of total common stock shares issued and outstanding plus the total number of series B, A and A-2 that are issued and outstanding.) The increase in authorized shares of common stock from 500,000,000 to 1,000,000,000 was approved by the shareholders and Board of Directors on September 27, 2017.
As of September 17, 2018, a reverse stock split in the ratio 5,000 for 1 share and the name change from X Rail Entertainment, Inc. to Las Vegas Xpress, Inc. was effective. The stock split has been retroactively reflected for all periods presented.
During the ninesix months ended SeptemberJune 30, 2017,2019, the Company issued an aggregate of 21,727,889775,000,000 shares of common stock for compensation of $77,500 valued at the conversion of $88,395 in convertible notes payable and accrued interest.stock price on grant date. During the ninesix months ended SeptemberJune 30, 20162018, the Company issued an aggregate of 200,000133,166 shares of common stock for the conversioncompensation of $5,000 of outstanding note payable.
| 12 |
| Table of Contents |
During the ninesix months ended SeptemberJune 30, 2017,2019, the Company issued an aggregate of 1,460,000 shares of common stock as payment for services resulting in total expense of $130,000. During the nine months ended September 30, 2016, the Company issued an aggregate of 1,024,0002,001,133,771 shares of common stock for services and 16,791,611note or interest conversion of $172,643. During the six months ended June 30, 2018 the Company issued 15,109 shares of common stock for directors' and employee compensation resulting in an expensenote or interest conversion of $1,257,091.
There were no warrants exercised during the ninesix months ended SeptemberJune 30, 2016.
During the ninesix months ended SeptemberJune 30, 2017,2019 and 2018, the Company issued 11,620,0000 and 25,000 shares of common stock for cashservices valued at the market price of $421,000. During$0 and $200,000 on the ninegrant date.
Warrants
The Company accounted for the issuance of Warrants in conjunction from the issuance of convertible notes as an equity instrument and recognized the warrants under the Black-Scholes valuation model based on the Company’s market share price on the grant date.
The below table summarizes warrant activity during the six months ended SeptemberJune 30, 2016,2019:
|
| Number of Shares |
|
| Weighted- Average Exercise Price |
| ||
Balances as of December 31, 2018 |
|
| 3,426 |
|
| $ | 697 |
|
Granted |
|
|
|
|
|
| - |
|
Exercised |
|
| - |
|
|
| - |
|
Forfeited |
|
| 1,990 |
|
|
| - |
|
Balances as of June 30, 2019 |
|
| 1,436 |
|
| $ | 750 |
|
The fair value of each warrant on the date of grant is estimated using the Black-Scholes option valuation model. The following weighted-average assumptions were used for warrants granted during the six months ended June 30, 2019 and 2018:
|
| Six Months Ended |
| |||||
|
| June 30, |
| |||||
|
| 2019 |
|
| 2018 |
| ||
Exercise price |
| $ | 750 |
|
| $ | 750 |
|
Expected term |
| 0.66 – 1.23 years |
|
| 1.91 – 2.48 years |
| ||
Expected average volatility |
|
| 629.60 | % |
|
| 297.55 | % |
Expected dividend yield |
|
| - |
|
|
| - |
|
The following table summarizes information relating to outstanding and exercisable warrants as of June 30, 2019:
Warrants Outstanding |
|
| Warrants Exercisable |
| ||||||||||||||
|
|
| Weighted Average |
|
|
|
|
|
|
|
|
|
| |||||
Number |
|
| Remaining Contractual |
|
| Weighted Average |
|
| Number |
|
| Weighted Average |
| |||||
of Shares |
|
| life (in years) |
|
| Exercise Price |
|
| of Shares |
|
| Exercise Price |
| |||||
| 1,436 |
|
|
| 0.81 |
|
| $ | 750 |
|
|
| 1,436 |
|
| $ | 750 |
|
As of June 30, 2019, the aggregate intrinsic value of warrants outstanding was $0.14 based on the closing market price of $0.0001 on June 30, 2019.
(6) | Subsequent Events |
On August 22, 2019, the Company issued 23,894,719500,000 shares of common stock for $337,500.
The Company has examined events occurring subsequent to June 30, 2019 through the nine months ended September 30, 2017, the Company issued 1,880,969 shares of common stock for share exchange with certain shareholders of Las Vegas Railway Express, Inc. (LVRE). During the nine months ended September 30, 2016, the Company issued 151,885,189 shares of common stock for the shares of LVRE.
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about the Company's business, financial condition and prospects that reflect management's assumptions and beliefs based on information currently available. There can be no assurance that the expectations indicated by such forward-looking statements will be realized. If any of management's assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, X Rail Entertainment,Las Vegas Xpress, Inc.,’s actual results may differ materially from those indicated by the forward- looking statements.
The key factors that are not within the Company's control and that may have a direct bearing on operating results include, but are not limited to, managements' ability to raise capital in the future, the retention of key employees and changes in the regulation of our industry, as well as the risk factors identified in the Company'sCompany’s filings.
When used in this Report, words such as, "believes," "expects," "intends," "plans," "anticipates," "estimates" and similar expressions are intended to identify and qualify forward-looking statements, although there may be certain forward-looking statements not accompanied by such expressions. However, the forward-looking statements contained herein are not covered by the safe harbors created by Section 21E of the Securities Exchange Act of 1934.
The following discussion should be read in conjunction with our consolidatedcondensed financial statements and notes thereto included elsewhere herein.
Business Overview
Las Vegas Xpress, Inc. is in the specialty passenger train business and has three operating divisions, Thedivisions: the X Train, currently in the planning stages, will beis an excursion railroad between metropolitan areas and resort/casino destinations,destinations: X Wine Railroads which is planned to be a rail excursion from metropolitan areas to wine regions,regions: and Club X Train, currently in the planning stages, will beis a riders membership club for X Train customers.
X Train
The X Train will be an excursion passenger rail service operated by United Rail, between Los Angeles and Las Vegas. We expect service to begin in late 2017. XREE plans to have its casino guests ride
United Rail is a related party company that will provide the exclusive train servicelocomotives, crew and to managerailcars for the host activity of its guests throughout their stay in the resort/casino. We anticipate that, in addition to the service between Los Angeles andproject. Las Vegas future X Train runs will be added in the coming years.
X Wine Railroad
The Company'sCompany’s X Wine Railroad service from LA Union Station to Santa Barbara California runsis planned to run on a scheduled basis, once a month on Saturdays, with individual riders (retail) as well as charters for corporate outings and special events. It began running from February 2017 to May 2017 and then again on November 4, 2017. One additional run is planned for December 2, 2017 and service is planned to run in 2018 from February to November.events (corporate). The X Wine Railroad provideswill provide a unique wine tasting experience to riders who take the train aboard special period classic railcars and an excursion to the Los Olivos wine area of Southern California. Over 250 private wineries reside in the area and the X Wine Railroad provideswill provide private access to these vineyards on an exclusive basis. Ticket prices are $369 per person, all inclusive. Since February 2017 this train has run once and the Company anticipates to continue to run this train intermittently, depending on demand. X Wine Railroad provides an all-inclusive day trip including a gourmet breakfast, wine tasting in the wineries, wine and cheese lunch at the wineries, and a gourmet dinner on the train's return trip.
| 14 |
| Table of Contents |
Club X Train
Club X Train, which is still in the planning stage, will be a one stop shop for all Las Vegas rooms, activities, tours, show tickets and packages. Las Vegas shows, hotel rooms, tours, nightclubs and attractions will all available for members of ClubXTrain.com. This will be the only site riders need to plan their Vegas vacation getaway.
We anticipate that when a customer purchases a train ticket on either the X Train (once it commences operations) or any of the X Wine Railroad excursions, such tickets will include enrollment in our Club X membership club. Members will receive points from each excursion they ride and will be provided discounts on products and services we provide. The more they ride, the more points they will receive. Club X train will be the customer's ticket within Vegas for access to nightclubs, hosted bottle service, pool parties, gentlemen's clubs and the Club X Train Crawl: a high end to visiting three nightclubs in one night. Customers will outline their desired plan for the evening and Club X Train will take care of arranging all the details. We expect to commence offering Club X Train service when the X Train commences running, currently anticipated to be first quarter of 2018.
Critical Accounting Policies
The preparation of our condensed financial statements and notes thereto requires management to make estimates and assumptions that affect the amounts and disclosures reported within those financial statements. On an ongoing basis, management evaluates its estimates, including those related to impairment of long-lived assets, contingencies, litigation and income taxes. Management bases its estimates and judgments on historical experiences and on various other factors believed to be reasonable under the circumstances. Actual results under circumstances and conditions different than those assumed could result in differences from the estimated amounts in the financial statements. There have been no material changes to these policies during the fiscal year.
| 15 |
| Table of Contents |
Results of Operations for the Three Months Ended SeptemberJune 30, 20172019 as Compared to the Three Months Ended SeptemberJune 30, 2016
The following is a comparison of the results of operations for the three months ended SeptemberJune 30, 20172019 and 2016.
| Three months ended | ||||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | $ Change | % Change | |||||||||||||
| Revenues | $ | - | $ | - | $ | - | 100.0 | % | ||||||||
| Cost of sales | - | - | - | 100.0 | % | |||||||||||
| Gross profit (loss) | - | - | - | 100.0 | % | |||||||||||
| Operating Expenses: | ||||||||||||||||
| Compensation and payroll taxes | $ | 137,569 | $ | 210,842 | $ | (73,273 | ) | -34.8 | % | |||||||
| Selling, general and administrative | 72,429 | 56,213 | 16,216 | 28.8 | % | |||||||||||
| Professional fees | 101,313 | 48,094 | 53,219 | 110.7 | % | |||||||||||
| Total expenses | 311,311 | 315,149 | (3,838 | ) | -1.2 | % | ||||||||||
| Loss from operations | (311,311 | ) | (315,149 | ) | 3,838 | -1.2 | % | |||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (133,630 | ) | (70,121 | ) | (63,509 | ) | 90.6 | % | ||||||||
| Derivative expense | 1,764 | - | 1,764 | -100.0 | % | |||||||||||
| Loss on disposition of assets | (629,270 | ) | - | (629,270 | ) | -100.0 | % | |||||||||
| Total other income (expense) | (761,136 | ) | (70,121 | ) | (691,015 | ) | 985.5 | % | ||||||||
| Net income (loss) from operations before provision for income taxes | (1,072,447 | ) | (385,270 | ) | (687,177 | ) | 178.4 | % | ||||||||
| Provision for income taxes | - | - | - | 0.0 | % | |||||||||||
| Net income (loss) | $ | (1,072,447 | ) | $ | (385,270 | ) | $ | (687,177 | ) | 178.4 | % | |||||
|
| Three months ended |
|
|
|
|
| |||||||||
|
| June30, |
|
| June 30, |
|
|
|
|
|
|
| ||||
|
| 2019 |
|
| 2018 |
|
| $ Change |
|
| % Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues |
| $ | - |
|
| $ | - |
|
| $ | - |
|
|
| 0.0 | % |
Cost of sales |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 0.0 | % |
Gross profit (loss) |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 0.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and payroll taxes |
| $ | 76,250 |
|
| $ | 272,497 |
|
| $ | (196,247 | ) |
|
| -72.0 | % |
Selling, general and administrative |
|
| 8,826 |
|
|
| 82,570 |
|
|
| (73,744 | ) |
|
| -89.3 | % |
Professional fees |
|
| 59,154 |
|
|
| 315,270 |
|
|
| (256,116 | ) |
|
| -81.2 | % |
Total expenses |
|
| 144,230 |
|
|
| 670,337 |
|
|
| (526,107 | ) |
|
| -78.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| (144,230 | ) |
|
| (670,337 | ) |
|
| 526,107 |
|
|
| -78.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess derivative liability expense |
|
| - |
|
|
| (60,801 | ) |
|
| 60,801 |
|
|
| 0.0 | % |
Interest expense |
|
| (28,210 | ) |
|
| (612,937 | ) |
|
| 584,727 |
|
|
| -95.4 | % |
Gain (loss) on change in value of derivative liability |
|
| 52,767 |
|
|
| 630,403 |
|
|
| (577,636 | ) |
|
| -91.6 | % |
Total other income (expense) |
|
| 24,557 |
|
|
| (43,335 | ) |
|
| 67,892 |
|
|
| -156.7 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from operations before provision for income taxes |
|
| (119,673 | ) |
|
| (713,672 | ) |
|
| 593,999 |
|
|
| -83.2 | % |
Provision for income taxes |
|
| - |
|
|
| - |
|
|
| - |
|
|
| 0.0 | % |
Net income (loss) |
| $ | (119,673 | ) |
| $ | (713,672 | ) |
| $ | 593,999 |
|
|
| -83.2 | % |
Revenue
During the three months ended June 30, 2019 and 2018, the Company didn’t generate any revenue, since it temporarily discontinued its operation of the X Wine Railroad. The Company plans to reestablish the service in 2021.
Operating Expenses
Compensation expense decreased by $73,273,$196,247, or 34.8%72.0%, during the quarterthree months ended SeptemberJune 30, 20172019 as compared to the quarterthree months ended SeptemberJune 30, 2016.2018. The decrease in compensation expense was primarily due to fewer employees.lower payroll in 2019 and issuances of stock to management in 2018. Selling, general and administrative expenses increaseddecreased by $16,216,$73,744, or 28.8%89.3%, during the quarterthree months ended SeptemberJune 30, 20172019 as compared to the same period in 20162018 primarily due to increasedecrease in travel and office expenses. Professional fees increaseddecreased by $53,219,$256,116, or 110.7%81.2%, during 20172019 as compared to 20162018 due primarily to increasesdecreases in consulting services and accounting expenses.
Other (Expense) Income
Interest expense increaseddecreased by $63,509,$584,727, or 90.6%95.4%, during the quarter ended SeptemberJune 30, 20172019 as compared to the same period in 20162018 due to issuances of certainlower convertible promissory notes.notes in 2019. During the three months ended SeptemberJune 30, 2017, the Company expensed the carrying2019, change in fair value of 10 rail cars of $629,270 as they were repossessedderivative liability decreased by the rail yard storage facility for unpaid storage charges.
| 16 |
| Table of Contents |
Results of Operations for the NineSix Months Ended SeptemberJune 30, 20172019 as Compared to the NineSix Months Ended SeptemberJune 30, 2016
The following is a comparison of the results of operations for the ninesix months ended SeptemberJune 30, 20172019 and 2016.
| Nine months ended | ||||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2017 | 2016 | $ Change | % Change | |||||||||||||
| Revenues | $ | 32,259 | $ | - | $ | 32,259 | 100.0 | % | ||||||||
| Cost of sales | (46,051 | ) | - | (46,051 | ) | 100.0 | % | |||||||||
| Gross profit (loss) | (13,792 | ) | - | (13,792 | ) | 100.0 | % | |||||||||
| Operating Expenses: | ||||||||||||||||
| Compensation and payroll taxes | $ | 391,274 | $ | 1,702,480 | $ | (1,311,206 | ) | -77.0 | % | |||||||
| Selling, general and administrative | 272,977 | 162,238 | 110,739 | 68.3 | % | |||||||||||
| Professional fees | 565,438 | 188,681 | 376,757 | 199.7 | % | |||||||||||
| Total expenses | 1,229,689 | 2,053,399 | (823,710 | ) | -40.1 | % | ||||||||||
| Loss from operations | (1,243,481 | ) | (2,053,399 | ) | 809,918 | -39.4 | % | |||||||||
| Other income (expense) | ||||||||||||||||
| Interest expense | (727,727 | ) | (89,019 | ) | (638,708 | ) | 717.5 | % | ||||||||
| Derivative expense | (7,789 | ) | - | (7,789 | ) | -100.0 | % | |||||||||
| Loss on disposition of assets | (629,270 | ) | - | (629,270 | ) | -100.0 | % | |||||||||
| Total other income (expense) | (1,364,786 | ) | (89,019 | ) | (1,275,767 | ) | 1433.1 | % | ||||||||
| Net income (loss) from operations before provision for income taxes | (2,608,267 | ) | (2,142,418 | ) | (465,849 | ) | 21.7 | % | ||||||||
| Provision for income taxes | - | - | - | 0.0 | % | |||||||||||
| Net income (loss) | $ | (2,608,267 | ) | $ | (2,142,418 | ) | $ | (465,849 | ) | 21.7 | % | |||||
|
| Six months ended |
|
|
|
|
| |||||||||
|
| June30, |
|
| June 30, |
|
|
|
|
|
|
| ||||
|
| 2019 |
|
| 2018 |
|
| $ Change |
|
| % Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues |
| $ | - |
|
| $ | 13,145 |
|
| $ | (13,145 | ) |
|
| -100.0 | % |
Cost of sales |
|
| - |
|
|
| (8,754 | ) |
|
| 8,754 |
|
|
| -100.0 | % |
Gross profit (loss) |
|
| - |
|
|
| 4,391 |
|
|
| (4,391 | ) |
|
| -100.0 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and payroll taxes |
| $ | 230,000 |
|
| $ | 2,618,747 |
|
| $ | (2,388,747 | ) |
|
| -91.2 | % |
Selling, general and administrative |
|
| 33,151 |
|
|
| 125,467 |
|
|
| (92,316 | ) |
|
| -73.6 | % |
Professional fees |
|
| 102,453 |
|
|
| 431,849 |
|
|
| (329,396 | ) |
|
| -76.3 | % |
Total expenses |
|
| 365,604 |
|
|
| 3,176,063 |
|
|
| (2,810,459 | ) |
|
| -88.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
| (365,604 | ) |
|
| (3,171,672 | ) |
|
| 2,806,068 |
|
|
| -88.5 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excess derivative liability expense |
|
| - |
|
|
| (60,801 | ) |
|
| 60,801 |
|
|
| -100.0 | % |
Interest expense |
|
| (80,173 | ) |
|
| (679,095 | ) |
|
| 598,922 |
|
|
| -88.2 | % |
Gain (loss) on change in value of derivative liability |
|
| 136,985 |
|
|
| 1,141,640 |
|
|
| (1,004,655 | ) |
|
| -88.0 | % |
Total other income (expense) |
|
| 56,812 |
|
|
| 401,744 |
|
|
| (344,932 | ) |
|
| -85.9 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) from operations before provision for income taxes |
|
| (308,792 | ) |
|
| (2,769,928 | ) |
|
| 2,461,136 |
|
|
| -88.9 | % |
Provision for income taxes |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - |
|
Net income (loss) |
| $ | (308,792 | ) |
| $ | (2,769,928 | ) |
| $ | 2,461,136 |
|
|
| -88.9 | % |
Revenue
During the ninesix months ended September 30,2017 asJune 30, 2019, the Company starteddidn’t generate any revenue, since it temporarily discontinued its operation running aof the wine train. During the six months ended June 30, 2018, the Company generated some revenue from operating the wine train between Los Angeles andin Santa Barbara, CA. Revenue was generated from selling train tickets, food and beverage and wine tours.
Operating Expenses
Compensation expense decreased by $1,311,206,$2,388,747, or 77.0%91.2%, during the ninesix months ended SeptemberJune 30, 20162019 as compared to the ninesix months ended SeptemberJune 30, 2016.2018. The decrease in compensation expense during the nine months ended September 30, 2017 iswas primarily due to the issuanceissuances of stock compensation to employees and Board members resultingmanagement in additional expenses in 2016.2018. Selling, general and administrative expenses increaseddecreased by $110,739,$92,316, or 68.3%73.6%, during the ninesix months ended SeptemberJune 30, 20172019 as compared to the same period in 20162018 primarily due to increasedecrease in travel and office expenses. Professional fees increaseddecreased by $376,757,$329,396, or 199.7%76.3%, during 20172019 as compared to 20162018 due primarily to increasesdecreases in professionalconsulting services.
Other (Expense) Income
Interest expense increaseddecreased by $638,708, or717.5%$598,922, or 82.2%, during the ninesix months ended SeptemberJune 30, 20172019 as compared to the same period in 20162018 due to issuances of promissory notes and accruing interest.lower debt. During the ninesix months ended SeptemberJune 30, 2017, the Company expensed the carrying2019, change in fair value of 10 rail cars of $629,270 as they were repossessedderivative liability decreased by the rail yard storage facility for unpaid storage charges.
Liquidity and Capital Resources
Liquidity is the ability of a company to generate funds to support asset growth, satisfy disbursement needs, maintain reserve requirements and otherwise operate on an ongoing basis. The Company has limited operating revenues and is currently dependent on debt financing and sale of equity to fund operations.
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As shown in the accompanying financial statements, the Company has a net lossesloss of $1,072,447$308,792 for the threesix months ended SeptemberJune 30, 20172019, and $2,608,267a net loss of $2,769,928 for the ninesix months ended SeptemberJune 30, 2017.2018. The Company also has an accumulated deficit of $10,547,428$23,128,739 and a negative working capital of $1,094,242$3,495,849 as of SeptemberJune 30, 2017, as well as2019, which includes outstanding convertible notes payable of $509,600, before debt discount of $205,224.$324,058. Management believes that it will need additional equity or debt financing to be able to implement its business plan. Given the lack of significant revenue, capital deficiency and negative working capital, there is substantial doubt about the Company'sCompany’s ability to continue as a going concern.
We believe that the successful growth and operation of our business is dependent upon our ability to do the following:
· | obtain adequate sources of debt or equity financing to acquire existing passenger rail operations; and | |
· | manage or control working capital requirements by controlling operating expenses. |
Management is attempting to raise additional equity and debt to acquire several operating passenger rail operations which will sustain operations until it can market its services and achieves profitability. The successful outcome of future activities cannot be determined at this time and there are no assurances that, if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results.
Cash Flows
Net cash used in operating activities for the ninesix months ended SeptemberJune 30, 20172019 and 20162018 were $1,535,657$77,704 and $774,397,$159,074, respectively. Cash used in operating activities for the ninesix months ended SeptemberJune 30, 20172019 and 20162018 were primarily due to net lossesloss of $2,608,267$308,792 and $2,142,418,$2,769,928, respectively. During the ninesix months ended SeptemberJune 30, 2017,2019, the net loss included significant non-cash expenses of $130,000$46,919 in debt discount amortization, $77,500 in stock issued for services, $156,330compensation, and $136,985 in amortization of discountsgain on change in derivative liability related to convertible notes payable, $88,395as well as $243,654 in conversion of notes payablechanges in operating assets and accrued interest and $499,196 in issuing warrants.liabilities. During the ninesix months ended SeptemberJune 30, 2016,2018, the net loss included significant non-cash expenses of $1,263,702$2,281,247 in stock issued for compensation, $120,811 in debt discount amortization, $200,000 in stock issued for services, $60,801 in derivative expense and $45,639$1,141,640 gain on change in amortization of discounts onderivative liability related to convertible notes payable.
There were no investing activities during the ninesix months ended SeptemberJune 30, 2017 amounted to $708,160, which represented writing off rail cars2019 and related costs. Net cash used in investing activities during the nine months ended September 30, 2016 was $19,240 primarily due to the capitalized costs towards the rail cars.
Net cash provided by financing activities for the ninesix months ended SeptemberJune 30, 20172019 amounted to $630,028,$75,021, which consisted of $19,100$1,546 in proceeds from the issuance of convertible notes payable $82,000 in repayments on convertible notes payable, $145,272and $73,475 in proceeds from related party notes payable, $53,344 in repayments on related party notes payable, $421,000 in common stock proceeds and $180,000 from exercise of warrant.payable. Net cash provided by financing activities for the ninesix months ended SeptemberJune 30, 20162018 was $562,784$102,961, which consisted of $490,000 from$154,100 in proceeds from convertible notes payable and $237,500$46,550 in repayments on convertible notes payable, as well as $5,344 from proceeds from stock purchases. There was a repayment on related party notes payable of $164,716.
Description of Indebtedness
For a complete description of our outstanding debt as of SeptemberJune 30, 20172019 and December 31, 2016,2018, see Notes 42 and 53 to the financial statements.
As a "smaller reporting company" as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
Evaluation of Disclosure Controls and Procedures and Changes in Internal Control over Financial Reporting
Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"“Exchange Act”) as of SeptemberJune 30, 2014.2019. In designing and evaluating our disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applied its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, our chief executive officer and chief financial officer concluded that, as of SeptemberJune 30, 2017,2019, our disclosure controls and procedures were not effective.
Management'sManagement’s Responsibility for Financial Statements
Our management is responsible for the integrity and objectivity of all information presented in this Quarterly Report on Form 10-Q. The consolidated financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and include amounts based on management'smanagement’s best estimates and judgments. Management believes the consolidated financial statements fairly reflect the form and substance of transactions and that the financial statements fairly represent the Company'sCompany’s financial position and results of operations.
There were no changes during the threesix months ended SeptemberJune 30, 20172019 in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.
On June 11, 2020, Michael Barron resigned as a CEO of Las Vegas Xpress, Inc. Albert Koenigsberg was appointed by the Board of Directors as a new CEO effective June 11, 2020.
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We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations and there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries'subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
As a "smaller“smaller reporting company"company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.
During the 3six months ended SeptemberJune 30, 2017,2019, the Company issued shares of its common stock as follows:
· | ||
· | 2,001,133,771 shares issued |
The above referenced issuances were made in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, for transactions not involving a public offering.
As of SeptemberJune 30, 20172019, we are not in default on any of our borrowings.
· | Promissory note dated December 20, 2017 payable on September 20, 2018 to Auctus Fund, LLC with outstanding balance of $68,686. | |
· | Promissory note dated January 5, 2018 payable on July 5, 2018 to GPL Ventures LLC with outstanding balance of $37,616. | |
· | Promissory note dated April 18, 2018 payable on October 17, 2018 to L2 Capital, LLC with outstanding balance of $67,916. | |
· | Promissory note dated June 2, 2017 payable on June 2, 2018 to East Shore Equities with outstanding balance of $18,260. | |
· | Promissory note dated September 30, 2017 payable on September 30, 2018 to Vortex Capital with outstanding balance of $12,000. | |
· | Promissory note dated November 27, 2017 payable on November 27, 2018 to EMA Financial, LLC with outstanding balance of $19,580. | |
· | Promissory note dated April 20, 2018 payable on April 20, 2019 to BGR Government Affairs with outstanding balance of $50,000. | |
· | Promissory note dated April 30, 2018 payable on April 30, 2019 to Albee There Too, LLC with outstanding balance of $50,000. |
Not applicable to our Company.
None
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Exhibit No. | Description | |
EX-101.INS | XBRL INSTANCE DOCUMENT | |
EX-101.SCH | XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT | |
EX-101.CAL | XBRL TAXONOMY EXTENSION CALCULATION LINKBASE |
EX-101.DEF | XBRL TAXONOMY EXTENSION DEFINITION LINKBASE | |
EX-101.LAB | XBRL TAXONOMY EXTENSION LABELS LINKBASE | |
EX-101.PRE | XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE |
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: | Las Vegas Xpress, Inc. | ||
By: | /s/ Albert Koenigsberg | ||
Chief Executive Officer (principal executive officer) | |||
Date: June 19, 2020 | |||
By: | /s/ Wanda Witoslawski | ||
Chief Financial Officer (principal financial officer) | |||
