See accompanying notes to these financial statements
LAS VEGAS XPRESS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
| | | Three months ended | | | Three months ended | |
| | | March 31, | | | March 31, | |
| | | 2019 | | | 2018 | |
| | | | | | | |
| Cash flows from operating activities | | | | | | |
| Net loss | | $ | (189,118 | ) | | $ | (2,056,256 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
| Amortization of debt discount on notes payable | | | (27,114 | ) | | | 110,658 | |
| Common stock issued for services | | | - | | | | - | |
| Common stock issued for compensation | | | 77,500 | | | | 2,185,000 | |
| Change in face value of derivative liability related to convertible note payable | | | (96,821 | ) | | | (540,308 | ) |
| Excess derivative liability expense | | | - | | | | - | |
| Loss on impairments of assets | | | - | | | | 511,237 | |
| Common stock issued for conversion of convertible notes | | | 120,526 | | | | - | |
| Changes in operating assets and liabilities: | | | | | | | | |
| Accounts payable and accrued expenses | | | 104,585 | | | | (281,919 | ) |
| Unearned revenue | | | - | | | | (2,304 | ) |
| Deposits and prepaid expense | | | - | | | | - | |
| Net cash used in operating activities | | | (24,823 | ) | | | (73,892 | ) |
| | | | | | | | | |
| Cash flows from investing activities | | | | | | | | |
| Purchases of property and equipment | | | - | | | | - | |
| Net cash used in investing activities | | | - | | | | - | |
| | | | | | | | | |
| Cash flows from financing activities | | | | | | | | |
| Proceeds from convertible notes payable | | | - | | | | 32,000 | |
| Repayments on related party notes payable | | | - | | | | (10,700 | ) |
| Proceeds from related party notes payable | | | 20,670 | | | | 6,200 | |
| Repayments on notes payable | | | 1,430 | | | | - | |
| Proceeds from exercise of warrant | | | - | | | | - | |
| Proceeds from stock purchases | | | - | | | | - | |
| Net cash provided by financing activities | | | 22,100 |
| | | 27,500 | |
| | | | | | | | | |
| Net change in cash | | | (2,723 | ) | | | (46,392 | ) |
| Cash, beginning of the period | | | 3,088 | | | | 56,983 | |
| Cash, end of the period | | $ | 365 | | | $ | 10,591 | |
| | | | | | | | | |
| 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 | | | 0 | | | | - | |
| Debt discount on convertible notes | | | 0 | | | | 245,463 | |
See accompanying notes to these financial statements
NOTES TO FINANCIAL STATEMENTS
(DEFICIT)FOR THE THREE MONTHS ENDED MARCH 31, 20192020 AND 2018
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | Additional | | | | | | | |
| | Common Stock | | | Preferred Stock | | | Paid-in | | | Accumulated | | | | |
| | Shares | | | Amount | | | Shares | | | Amount | | | Capital | | | Deficit | | | Total | |
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 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance December 31, 2019 | | | 3,518,965,736 | | | $ | 35,189 | | | | 98,800 | | | $ | 1 | | | $ | 19,597,700 | | | $ | (23,396,555 | ) | | $ | (3,763,665 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net loss | | | - | | | | - | | | | - | | | | - | | | | - | | | | (107,369 | ) | | | (107,369 | ) |
Balance March 31, 2020 | | | 3,518,965,736 | | | $ | 35,189 | | | | 98,800 | | | $ | 1 | | | $ | 19,597,700 | | | $ | (23,503,924 | ) | | $ | (3,871,034 | ) |
See accompanying notes to these condensed unaudited financial statements
LAS VEGAS XPRESS, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
| | Three months ended | | | Three months ended | |
| | March 31, | | | March 31, | |
| | 2020 | | | 2019 | |
| | | | | | |
Cash flows from operating activities | | | | | | |
Net loss | | $ | (107,369 | ) | | $ | (189,119 | ) |
Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | |
Amortization of debt discount | | | - | | | | 37,114 | |
Common stock issued for compensation | | | - | | | | 77,500 | |
Gain on change in fair value of derivative liability | | | - | | | | (84,218 | ) |
Changes in operating assets and liabilities: | | | | | | | | |
Accounts payable and accrued expenses | | | 102,765 | | | | 132,206 | |
Accrued expenses - related parties | | | 4,604 | | | | 4,554 | |
Net cash (used in) operating activities | | | - | | | | (21,963 | ) |
| | | | | | | | |
Cash flows from investing activities | | | | | | | | |
Net cash provided by (used in) investing activities | | | - | | | | - | |
| | | | | | | | |
Cash flows from financing activities | | | | | | | | |
Proceeds from related party notes payable | | | - | | | | 20,670 | |
Repayments on notes payable | | | - | | | | (1,430 | ) |
Net cash provided by financing activities | | | - | | | | 19,240 | |
| | | | | | | | |
Net change in cash | | | - | | | | (2,723 | ) |
Cash, beginning of the period | | | - | | | | 3,088 | |
Cash, end of the period | | $ | - | | | $ | 365 | |
| | | | | | | | |
Supplemental disclosure of cash flow information: | | | | | | | | |
Interest paid with cash | | $ | - | | | $ | - | |
Income taxes paid | | $ | - | | | $ | - | |
| | | | | | | | |
Supplemental disclosure of non-cash investing and financing transactions: | | | | | | | | |
Conversion of notes payable and accrued interest to capital | | $ | - | | | $ | 120,525 | |
Debt discount on convertible notes | | $ | - | | | $ | 28,887 | |
See accompanying notes to these condensed unaudited financial statements
LAS VEGAS XPRESS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 2020 AND 2019
(Unaudited)
(1) Organization and description of business
Summary of Significant Accounting Policies
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 lossesloss of $189,118$107,369 for the three months ended March 31, 2019.2020. The Company also has an accumulated deficit of $23,009,066$23,503,924 and a negative working capital of $3,428,294$3,871,034 as of March 31, 2019, as well as2020, including outstanding convertible notes payable of $372,902, before debt discount of $27,887.$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 revenue, capital deficiency and negative working capital, there is substantial doubt about the Company’s ability to continue as a going concern.
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 Las Vegas Xpress, Inc. (the "Company"“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”) 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, 20192020 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, 2019.
The Company operates in a 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’s operations.
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. Actual results could differ from those estimates.
Cash and Cash Equivalents
Equivalents:The Company considers all highly liquid instruments with a maturity of three months or less at the time of issuance to be cash equivalents. As of March 31, 20192020 and December 31, 2018,2019, the Company had $365 and $3,088$0 in cash and cash equivalents, respectively.
Property and Equipment:
Property and equipment are recorded at historical cost and depreciated on a straight-line basis over their estimated useful lives of approximately five years once the individual assets are placed in service. The Company expenses all purchases of equipment with individual costs of under $500, and these amounts are not material to the financial statements. As of December 31, 2018, we wrote off the rail cars on the balance sheet at $125,000 with no accumulated depreciation. The rail cars require substantial investment to retrofit and are not going to be in service in the nearest future.
Long-Lived Assets:
In accordance with FASB ASC 360-10, the Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. When such factors and circumstances exist, the Company compares the projected undiscounted future cash flows associated with the related asset or group of assets over their estimated useful lives against their respective carrying amount. Impairment, if any, is based on the excess of the carrying amount over the fair value, based on market value when available, or discounted expected cash flows, of those assets and is recorded in the period in which the determination is made. The Company’s management believes there has been no impairment of its long-lived assets during the three months ended March 31, 2019, or 2018. There can be no assurance, however, that market conditions will not change or demand for the Company’s business model will continue. Either of these could result in future impairment of long-lived assets. No impairment loss was recognized for the three months ended March 31, 2019 and 2018.
equivalents.Related Parties
Parties:The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions (see Note 4)2).
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 March 31, 2019,2020 and December 31, 2018,2019, 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”) 260, “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 months ended March 31, 2019,2020 and December 31, 20182019 as the amounts are anti-dilutive.anti-dilutive due to net losses. As of March 31, 2020 and December 31, 2019, the Company had 3,4261,436 outstanding warrants and convertible debt of $372,902, before debt discount of $27,887,$324,058, which were all excluded from the computation as they were anti-dilutive and are convertible into 6,941,782,0266,114,128,585 shares of common stock. As of March 21, 2018, the Company had 3,426 outstanding warrants and convertible debt of $401,900, before debt discount of $245,463,stock, which were all excluded from the computation as they were anti-dilutive.
Recognition:The Company recognizes revenue from the sale of services in accordance with ASC 606, “Revenue Recognition”,Recognition,” only when all of the following criteria have been met:
| i)(i) | Persuasive evidence for an agreement exists;Identify the contract(s) with a customer; |
| ii)(ii) | Service has been provided;Identify the performance obligations in the contract(s); |
| iii)(iii) | The fee is fixed or determinable; and,Determine the transaction price; |
| iv)(iv) | Collection is reasonably assured.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
Instruments:The Company’s financial instruments consist primarily of cash, prepaid expense, deferred financing cost, 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.
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 March 31, 2019,2020 and December 31, 2018,2019, measured at fair value on a recurring basis:
March 31, 2019 | | Level 1 | | | Level 2 | | Level 3 | | Total | |
| Liabilities | | | | | | | | | | |
| Derivative Liabilities | | $ | | | | $ | | | | $ | 252,607 | | | $ | 252,607 | |
| | | | | | | | | | | | | | | | | |
December 31, 2018 | | Level 1 | | | Level 2 | | Level 3 | | Total | |
| Liabilities | | | | | | | | | | | | | | | | |
| Derivative Liabilities | | $ | | | | $ | | | | $ | 336,825 | | | $ | 336,825 | |
March 31, 2020 | | Level 1 | | Level 2 | | Level 3 | | | Total | |
Liabilities | | | | | | | | | | |
Derivative Liabilities | | $ | | $ | | $ | 143,678 | | | $ | 143,678 | |
| | | | | | | | | | | | |
December 31, 2019 | | Level 1 | | Level 2 | | Level 3 | | | Total | |
Liabilities | | | | | | | | | | | | |
Derivative Liabilities | | $ | | $ | | $ | 143,678 | | | $ | 143,678 | |
Share Based Payments:
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 three months ended March 31, 20192020 and 2018,2019, the Company incurred $0 and $77,500, and $2,185,000respectively, in stock- basedstock-based compensation to employees.
The Company accounts for share-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 measurement date. As described above, for employees this is the date of grant, and for non-employees, this is the date of performance completion.
The Company values warrants using the Black-Scholes option pricing model. Assumptions used in the Black-Scholes model to value options and warrants issued during the three months ended March 31, 20192020 were as follows:
Variables | | Values | |
| Stock price | | $ | 0.0001 | |
| Exercise Price | | $ | 697.00 | |
| Term | | 0.13-2.08 years | |
| Risk Free Rate | | | 0.25 | % |
| Volatility | | | 451.6% - 596.1 | % |
Variables | | Values as of March 31, 2020 | | | Values as of December 31, 2019 | |
Stock price | | $ | 0.0001 | | | $ | 0.0001 | |
Exercise Price | | $ | 750 | | | $ | 750 | |
Term | | 0.01-1.08 | years | | 0.16-1.33 | years |
Risk Free Rate | | | 0.25 | % | | | 0.25 | % |
Volatility | | 0 | % | | 579.6%-678.3 | % |
During the three months ended March 31, 20192020 and 2018,2019, the Company has not issued any0 and 775,000,000 shares of common stock for outside services.
(3) Property and Equipment
The Company wrote off rail cars as of December, 31, 2018, as there was not plans of putting the cars into operation in the foreseeable future. No indicators of impairment exist for the recorded assets.
(4)compensation, respectively.(2) Related Party Notes Payable
The Company acquires on-going funding on an as-needed basis from related parties that include the Company’s officers, directors, majority shareholders, and these parties’ affiliates, pursuant to promissory notes with various origination dates in 2015 and 2017. A summary of outstanding notes payable is as follows:
| | | March 31, | | | December 31, | |
| | | 2019 | | | 2018 | |
| | | | | | | |
| Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand. | | | 41,810
| | | | 41,810
| |
| | | | | | | | | |
Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand. | �� | | 24,101 | | | | 24,101 | |
| | | | | | | | | |
Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand. | | | 53,994 | | | | 53,994 | |
| | | | | | | | |
Promissory note, dated September 30, 2015, bearing no interest, payable on demand.
| | | 329,484 | | | | 308,814 | |
| | | | | | | | | |
Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand. | | | 59,044 | | | | 59,044 | |
| | | | | | | | | |
Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand. | | | 3,200 | | | | 3,200 | |
| | | | | | | | | |
| | $ | 511,633 | | | | 490,963 | |
(5) | | March 31, | | | December 31, | |
| | 2020 | | | 2019 | |
| | | | | | |
Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand | | $ | 41,810 | | | $ | 41,810 | |
| | | | | | | | |
Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand | | | 24,101 | | | | 24,101 | |
| | | | | | | | |
Promissory note, dated December 15, 2015, bearing interest at 10% annually, payable on demand | | | 53,994 | | | | 53,994 | |
| | | | | | | | |
Promissory note, dated September 30, 2015, bearing no interest payable on demand | | | 349,573 | | | | 349,573 | |
| | | | | | | | |
Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand | | | 59,044 | | | | 59,044 | |
| | | | | | | | |
Promissory note, dated September 30, 2017, bearing 10% interest, payable on demand | | | 3,200 | | | | 3,200 | |
Total notes payable, including accrued interest | | $ | 531,722 | | | $ | 531,722 | |
For the three months ended March 31, 2020 and 2019, proceeds from related parties were $0 and $20,670, respectively, and no repayments were made. Accrued interest on the notes totaled $68,926 and $64,322, respectively.
(3) Convertible Notes Payable
The following summarizes the book value of the convertible notes payable outstanding as of March 31, 20192020 and December 31, 2018:
| | | March 31, | | | 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. | | | 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 | | | 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 | | | 24,255 | | | | 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. | | | 72,855 | | | | 112,000 | |
| | | | | | | | | |
| 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. This 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. | | | 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. | | | 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 | | | | 40,000 | |
| | | | | | | | | |
| Convertible notes before debt discount | | | 372,902 | | | | 464,112 | |
| | | | | | | | | |
| Less debt discount | | | (27,887 | ) | | | (65,001 | ) |
| | | | | | | | | |
| Total outstanding convertible notes payable | | $ | 345,015 | | | | 399,111 | |
(6) 2019: | | March 31, | | | December 31, | |
| | 2020 | | | 2019 | |
| | | | | | |
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 | | | | 18,260 | |
| | | | | | | | |
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 | | | | 19,580 | |
| | | | | | | | |
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 | | | | 68,686 | |
| | | | | | | | |
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 | | | | 67,916 | |
| | | | | | | | |
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 | |
| | | | | | | | |
Convertible notes before debt discount | | | 324,058 | | | | 324,058 | |
| | | | | | | | |
Less unamortized debt discount | | | - | | | | - | |
| | | | | | | | |
Total outstanding convertible notes payable | | $ | 324,058 | | | | 324,058 | |
The Company recorded $0 and $37,114 in debt discount amortization during the three months ended March 31, 2020 and 2019, respectively. The aggregate debt discount was fully amortized at December 31, 2019.
Accrued interest on the convertible notes totaled $142,215 and $95,246 at March 31, 2020 and 2019, respectively.
During the three months ended March 31, 2020, the Company did not convert any convertible note principal nor interest. During the three months ended March 31, 2019, the Company converted $91,211 in convertible note principal and $29,314 in interest ($120,525 total debt) into 1,025,758,503 shares of common stock (Note 5).
See Note 5 for details of warrants issued in connection with the above convertible notes.
(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 delivered upon settlement of the above conversion options.
The Company determined our derivative liabilities to be a Level 3 fair value measurement and used the Black-Scholes pricing model to calculate the fair value as of March 31, 20192020 and December 31, 2018.2019. The Black-Scholes model requires six basic data inputs: the exercise or strike price, time to expiration, the risk-free interest rate, the current stock price, the estimated volatility of the stock price in the future, and the dividend rate. Changes to these inputs could produce a significantly higher or lower fair value measurement. The fair value of each convertible note and warrant is estimated using the Black-Scholes valuation model. The following weighted-average assumptions were used inat March 31, 20192020 and December 31, 2018:
| | | Three Months Ended | | | Year Ended | |
| | | March 31, 2019 | | | December 31, 2018 | |
| Expected term | | 0.17- 0.72 years | | | 0.4 – 0.96 years- | |
| Expected average volatility | | | 284.3 | % | | | 313.6 | % |
| Expected dividend yield | | | - | | | | - | |
| Risk-free interest rate | | | 1.65 – 2.97 | % | | | 1.28 – 1.76 | % |
2019: | | March 31, 2020 | | | December 31, 2019 | |
Expected term | | 1 | year | | 1 | year |
Average volatility | | | 0 | % | | | 0 | % |
Dividend yield | | | - | | | | - | |
Risk-free interest rate | | 0.05–1.48 | % | | 0.05–1.48 | % |
The Company valued the conversion feature using the Black-Scholes valuation model. The fair value of the derivative liability for all the notes that becamewere convertible as of March 31, 2020 and December 31, 2019 amounted to $252,607.
Common and Preferred Stock
The Company is authorized to issue 10,000,000,000 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 (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)
During the three months ended March 31, 2020, the Company did not issue any 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. The increase from 1,000,000,000 to 3,000,000,000 shares was effective December 12, 2017, the increase from 3,000,000,000 to 5,000,000,000 shares was effective March 21, 2018 and the increase from 5,000,000,000 to 10,000,000,000 was effective May 17, 2018.
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.
compensation. During the three months ended March 31, 2019, the Company issued an aggregate of 775,000,000 shares of common stock for compensation of
$77,500. $77,500 valued at the stock price on grant date.During the three months ended March 31, 2018,2020, the Company issued an aggregate of 605,000,000did not issue any shares of common stock for compensation of $2,185,000.
note or interest conversion. During the three months ended March 31, 2019, the Company issued an aggregate of 1,025,758,503 shares of common stock for note or interest conversion of $120,526. During the three months ended March 31, 2018 the Company has not issued any shares of common stock for note or interest conversion.
$120,525.There were no warrants exercised during the three months ended March 31, 20192020 and 2018.
During the three months ended March 31, 2019 and 2018, the Company did not issue any shares of common stock for cash.
The Company accounted for the issuance of Warrants in conjunction fromwith the issuance of convertible notes as an equity instrument and recognized the warrants under the Black-Scholes valuation model based on the company’sCompany’s market share price on the grant date.
The below table summarizes warrant activity during the three months ended March 31, 2019:
| | | Number of Shares | | | Weighted- Average Exercise Price | |
| Balances as of December 31, 2018 | | | 3,426 | | | $ | 697 | |
| Granted | | | | | | | - | |
| Exercised | | | - | | | | - | |
| Forfeited | | | - | | | | - | |
| Balances as of March 31, 2019 | | | 3,426 | | | $ | 697 | |
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 options granted during the three months ended March 31, 2019 and 2018:
| | Three Months Ended | |
| | March 31, | |
| | 2019 | | 2018 | |
| Exercise price | | $ | 697 | | | $ | 750 | |
| Expected term | 0.13 – 2.08 years | | | 1.91 – 2.48 years | |
| Expected average volatility | | | 560.55 | % | | | 297.55 | % |
| Expected dividend yield | | | - | | | | - | |
2020: | | Number of Shares | | | Weighted- Average Exercise Price | |
Balances as of December 31, 2019 | | | 1,436 | | | $ | 750 | |
Granted | | | | | | | - | |
Exercised | | | - | | | | - | |
Forfeited | | | - | | | | - | |
Balances as of March 31, 2020 | | | 1,436 | | | $ | 750 | |
The following table summarizes information relating to outstanding and exercisable warrants as of March 31, 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 | |
| | 3,426 | | | | 1.13 | | | $ | 697 | | | | 3,426 | | | $ | 697 | |
Aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the warrants at March 31, 2019, for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). 2020: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 | | | | 0.15 | | | $ | 750 | | | | 1,436 | | | $ | 750 | |
As of March 31, 2019,2020, the aggregate intrinsic value of warrants outstanding was $0.03$0 based on the closing market price of $0.0001 on March 31, 2019.
(8) Related Party Transactions
During the three months ended March 31, 2019, the Company added an additional $20,670 to the promissory note dated September2020.(6) Subsequent Events
On June 30, 2017 to United Rail, Inc., leaving the balance outstanding of $329,484 as of March 31, 2019 and $308,814 at December 31, 2018, respectively.
(9) Subsequent Events
On April 2, 2019,2020, the Company issued 122,708,600105,163,333 shares of common stock for accrued interest on convertible note conversion of $4,908.
$2,655.In the month of July 2020, the Company issued 445,562,016 shares of common stock for accrued interest on convertible note of $12,367.
On July 14, 2020, the Company issued 1,500,000,000 shares of common stock and 16 shares of preferred stock C to directors as compensation.
The Company has evaluated events from March 31, 2020 through the date these financial statements were issued and determined there are no additional events requiring disclosure.
Item 2. Management'sManagement’s Discussion and Analysis of Financial Condition and Results of Operations
.
Forward-Looking Statements
This Quarterly Report contains forward-looking statements about the Company'sCompany’s business, financial condition and prospects that reflect management'smanagement’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'smanagement’s assumptions should prove incorrect, or if any of the risks and uncertainties underlying such expectations should materialize, 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'sCompany’s control and that may have a direct bearing on operating results include, but are not limited to, managements'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’s filings.
When used in this Report, words such as, "believes," "expects," "intends," "plans," "anticipates," "estimates"“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.
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.
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 early 2020. LVXI plans to have its casino guests ride the exclusive train service and to manage the host activity of its guests throughout their stay in the resort/casino. We anticipate that, in addition to the service between Los Angeles and Las Vegas future X Train runs will be added in the coming years.
We expect to operate the X Train as an Amtrak train listed on the Amtrak national timetable. Amtrak will provide the locomotives, crew and railcars for the project. X TrainXpress, Inc. will provide a complete bundled package of services including ticket, rooms and transfers to & from the station and weekend events such as access to nightclubs, golf outings and restaurants. ItUnited Rail is a related party company that will be scheduled as a Friday through Sunday service with passengers in Los Angeles boardingprovide the train at Union Stationlocomotives, crew and arriving atrailcars for the station in downtown Las Vegas and leased and operated by the X Train. Only the X Train will be able to use our station in Las Vegas. A typical X Train will carry 11 passenger cars and will include food service and will carry on average, 700 passengers per trip. This number can be increased by adding more cars to the route.
Our LA to Vegas business plan emanates from a regional transportation feasibility study published in 2007, which suggested that a well-run rail service between Los Angeles and Las Vegas could garner up to 30% of the approximately 12 million passengers who regularly drive between these two metropolitan areas. See: www.rtcsouthernnevada.com. We believe that with our current business plan, we would be able to break-even, on an operating basis, with approximately 20,000 riders per year.
To commence commercial service of the Los Angeles to Las Vegas route, we will need to negotiate and secure the necessary rights, equipment and facilities by August 2019. These items include: securing a regularly scheduled train agreement from Amtrak to operate our excursion service on a weekly basis beginning with one round trip train per week and increasing to six round trips per week over the next several years as demand dictates, securing operating rights to run our trains over tracks owned by private railroads, obtaining the capability to operate train equipment safely and in conformity with applicable government regulations, and purchasing or leasing appropriate locomotive and passenger cars designed to move passengers over the route in comfort and securing leases on terminal facilities and passenger depots in Los Angeles and in Las Vegas. We expect the X Train to begin running in January 2020.
We will operate as a railroad under Amtrak’s national entitlement common carrier status.
The Company’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 (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 expectsanticipates to continue to run this train intermittently, depending on demand. X Wine 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'strain’s return trip.
The Company temporarily suspended the service until 2021 due to change in Amtrak policies.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'scustomer’s ticket within Vegas for access to nightclubs, hosted bottle service, pool parties, gentlemen'sgentlemen’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 January 2020.
2022.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.
Results of Operations for the Three Months Ended March 31, 20192020 as Compared to the Three Months Ended March 31, 2018
2019The following is a comparison of the results of operations for the three months ended March 31, 20192020 and 2018.
| | | Three months ended | | | | | | | |
| | | March 31, | | | March 31, | | | | | | | |
| | | 2019 | | | 2018 | | | $ Change | | | % Change | |
| | | | | | | | | | | | | |
| Revenues | | $ | - | | | $ | 13,145 | | | $ | - | | | | 100.0 | % |
| Cost of sales | | | - | | | | (8,754 | ) | | | - | | | | -100.0 | % |
| Gross profit (loss) | | | - | | | | 4,391 | | | | - | | | | 0.0 | % |
| | | | | | | | | | | | | | | | | |
| Operating Expenses: | | | | | | | | | | | | | | | | |
| Compensation and payroll taxes | | $ | 153,750 | | | $ | 2,346,250 | | | $ | (2,192,500 | ) | | | -93.4 | % |
| Selling, general and administrative | | | 24,325 | | | | 42,896 | | | | (18,571 | ) | | | -43.3 | % |
| Professional fees | | | 43,299 | | | | 116,580 | | | | (73,281 | ) | | | -62.9 | % |
| Total expenses | | | 221,374 | | | | 2,505,726 | | | | (2,284,352 | ) | | | -91.2 | % |
| | | | | | | | | | | | | | | | | |
| Loss from operations | | | (221,374 | ) | | | (2,501,335 | ) | | | 2,279,961 | | | | -91.1 | % |
| | | | | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | | | | |
| Excess derivative liability expense | | | - | | | | - | | | | - | | | | 0.0 | % |
| Interest expense | | | (51,963 | ) | | | (66,158 | ) | | | 9,815 | | | | -14.8 | % |
| Gain (loss) on change in derivative liability | | | 84,218 | ) | | | 511,237 | | | | (712,698 | ) | | | -139.4 | % |
| Total other income (expense) | | | 32,255 |
| | | 445,079 | | | | (702,883 | ) | | | -157.9 | % |
| | | | | | | | | | | | | | | | | |
| Net income (loss) from operations before provision for income taxes | | | (189,118 | ) | | | (2,056,256 | ) | | | 1,577,079 | | | | -76.7 | % |
| Provision for income taxes | | | - | | | | - | | | | - | | | | 0.0 | % |
| Net income (loss) | | $ | (189,118 | ) | | $ | (2,056,256 | ) | | $ | 1,577,079 | | | | -76.7 | % |
2019: | | Three months ended | | | | | | | |
| | March 31, | | | March 31, | | | | | | | |
| | 2020 | | | 2019 | | | $ Change | | | % Change | |
| | | | | | | | | | | | |
Operating Expenses: | | | | | | | | | | | | |
Compensation and payroll taxes | | $ | 93,750 | | | $ | 153,750 | | | $ | (60,000 | ) | | | -39.0 | % |
Selling, general and administrative | | | 608 | | | | 24,325 | | | | (23,717 | ) | | | -97.5 | % |
Professional fees | | | - | | | | 43,299 | | | | (43,299 | ) | | | -100.0 | % |
Total expenses | | | 94,358 | | | | 221,374 | | | | (127,016 | ) | | | -57.4 | % |
| | | | | | | | | | | | | | | | |
Loss from operations | | | (94,358 | ) | | | (221,374 | ) | | | 127,016 | | | | -57.4 | % |
| | | | | | | | | | | | | | | | |
Other income (expense) | | | | | | | | | | | | | | | | |
Interest expense | | | (13,011 | ) | | | (51,963 | ) | | | 38,952 | | | | -75.0 | % |
Gain on change in value of derivative liability | | | - | | | | 84,218 | | | | (84,218 | ) | | | -100.0 | % |
Total other income (expense) | | | (13,011 | ) | | | 32,255 | | | | (45,266 | ) | | | -140.3 | % |
| | | | | | | | | | | | | | | | |
Net loss before provision for income taxes | | | (107,369 | ) | | | (189,119 | ) | | | 81.750 | | | | -43.2 | % |
Provision for income taxes | | | - | | | | - | | | | - | | | | 0.0 | % |
Net loss | | $ | (107,369 | ) | | $ | (189,119 | ) | | $ | 81,750 | | | | -43.2 | % |
Revenue
During the three months ended March 31, 2020 and 2019, the Company didn’t generate any revenue, since it temporarily discontinued its operation of the wine train. DuringX Wine Railroad. The Company plans to reestablish the three months ended March 31, 2018, the Company generated some revenue from operating the wine trainservice in Santa Barbara, CA. Revenue was generated from selling train tickets, food and beverage and wine tours.
Compensation expense decreased by $2,192,500,$60,000, or 93.4%39%, during the three months ended March 31, 20192020 as compared to the three months ended March 31, 2018.2019. The decrease in compensation expense was primarily due to issuances of stock to managementlower payroll and fewer employees in 2018.2020. Selling, general and administrative expenses decreased by $18,571,$23,717, or 43.3%97.5%, during the three months ended March 31, 20192020 as compared to the same period in 20182019 primarily due to decrease in travel and office expenses. Professional fees decreased by $73,281,$43,299, or 62.9%100%, during 20192020 as compared to 2018 due primarily to decreases in2019 as Company didn’t use any consulting or legal services.
Interest expense decreased by $14,195,$38,952, or 21.5%75.0%, during the quarter ended March 31, 20192020 as compared to the same period in 20182019 due to lower of convertible promissory notes in 2019.2020 and debt discount amortization during the three months ended March 31, 2019 (fully amortized at December 31, 2019). During the three months ended March 31, 2019,2020, change in fair value of derivative liability decreased by $427,019$84,218 or 83.5%100.0%.
There were no convertible note conversions or change in Black Scholes inputs during the three months ended March 31, 2020, so there was no change in the fair market value of the derivative liability.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.
As shown in the accompanying financial statements, the Company has a net lossesloss of $189,118$107,369 for the three months ended March 31, 20192020, and $2,056,256a net loss of $189,119 for the three months ended March 31, 2018.2019. The Company also has an accumulated deficit of $23,009,066$23,503,924 and a negative working capital of $3,428,294$3,871,034 as of March 31, 2019, as well as2020, which includes outstanding convertible notes payable $372,902, before debt discount of $27,887.$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’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.
Net cash used in operating activities for the three months ended March 31, 2020 and 2019 were $(0) and 2018 were $24,823 and $73,892,$(21,963), respectively. Cash used in operating activities for the three months ended March 31, 20192020 and 20182019 were primarily due to net lossesloss of $189,118$107,369 and $2,056,256,$189,119, respectively. During the three months ended March 31, 2020, the net loss included significant non-cash expenses of $107,369 in changes in operating assets and liabilities. During the three months ended March 31, 2019, the net loss included significant non-cash expenses of $77,500 in stock issued for compensation, $37,114 in debt discount amortization, of discountsand $84,218 in gain on notes payable, $96,821change in derivative expense related to convertible notes payable and $100,204liability, as well as $136,760 in changes in operating assets and liabilities. During the three months ended March 31, 2018, the net loss included significant non-cash expenses of $2,185,000 in stock issued for compensation, $110,658 in amortization of discounts on notes payable, $511,237 in loss on impairments of assets, $540,308 in derivative expense related to convertible notes payable and $284,223 in changes in operating assets and liabilities.
There waswere no net cash used in investing activities during the three months ended March 31, 20192020 and 2018.
2019.Net cash provided by financing activities for the three months ended March 31, 2020 amounted to $0. Net cash provided by financing activities for the three months ended March 31, 2019 amounted to $22,100,was $19,240, which consisted of $20,670 in proceeds from related partyparties notes payable and $1,430 in repayments on notes payable. Net cash provided by financing activities for the three months ended March 31, 2018 was $27,500 which consisted of $32,000 from proceeds from convertible notes payable, $10,700 in repayments on related party notes payable and $6,200 from proceeds from related party notes payable.
Description of Indebtedness
For a complete description of our outstanding debt as of March 31, 20192020 and December 31, 2018,2019, see Notes 42 and 53 to the financial statements.
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.
Item 4. Controls and Procedures.
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”) as of March 31, 2019.2020. 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 March 31, 2019,2020, our disclosure controls and procedures were not effective.
Management’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’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’s financial position and results of operations.
Changes in Internal Control Over Financial Reporting
There were no changes during the three months ended March 31, 20192020 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.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
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’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.
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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the three months ended March 31, 2019,2020, the Company issueddid not issue any shares of its common stock as follows:
· | 775,000,000 shares issued for compensation valued at $77,500. |
| |
· | 1,025,758,503 shares issued for notes and interest conversion valued at 120,526. |
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 March 31, 2019,2020, we are in default on certain convertible promissory note.
notes: | • | 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. |
Item 4. Mine Safety Disclosures
Not applicable to our Company.
Item 5. Other Information.
Item 6. Exhibits.
Item 6. Exhibits.
EX-101.INS | | |
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 | | |
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: May 20, 2019August 12, 2020 | Las Vegas Xpress, Inc. | |
| | | |
| By: | /s/ Albert Koenigsberg | |
| | Chief Executive Officer (principal executive officer) | |
| | | |
Date: August 12, 2020 | | | |
| By: | /s/ Wanda Witoslawski | |
| | Chief Financial Officer (principal financial officer) | |
| |
| By: /s/ Michael A. Barron
|
| Chief Executive Officer (principal executive officer) |
| |
Date: May 20, 2019 | |
| By: /s/ Wanda Witoslawski
|
| Chief Financial Officer (principal financial officer)21 |
