Penny-stock company Las Vegas Railway Express Inc. unveiled an audacious national expansion of its party train concept even as its recently filed annual report detailed that more promises to start Las Vegas-to-Los Angeles service have evaporated.
In November, company CEO Michael Barron hosted a conference call, during which he announced the inaugural train would run on New Year’s Eve. However, the annual report filed Monday with the Securities and Exchange Commission pushed the possible start in late 2014, “subject to obtaining the needed funding.”
Barron has given other start dates for what he calls the X Train that have come and gone since he started promoting the concept in 2009. A company spokeswoman did not return calls seeking comment.
Also in the conference call, Barron announced that the company had retained the Wall Street firm Dahlman Rose & Co. to raise the tens of millions of dollars needed to get the line between Las Vegas and Los Angeles running . A spokeswoman for Cowen Securities, which has taken over Dahlman Rose, declined to comment on whether Las Vegas Railway is still a client.
Recent securities sales to keep the company going were handled by a different firm.
Nevertheless, Las Vegas Railway said it has identified several corridors across the country where it would attach as many as eight luxury cars to existing Amtrak trains, starting with Houston to New Orleans later this year. Amtrak did not respond to question about whether such a deal was in place.
Also, the 2012 annual report included a rendering, reproduced by the company in other forums, of a Las Vegas station attached to the Plaza downtown. Now, all mention of that has disappeared in favor of a site in North Las Vegas, overshooting the Strip by 10 miles, where the company said it has an agreement to enter into a lease with the owner but not a lease itself.
Other sections of the annual report reveal:
■ The price for starting service has changed again and is now set at $80 million. A year ago, the company placed it at $35 million, but revised it to $150 million in the third quarter report. The changes weren’t explained.
■ The status of a deal to use Union Pacific tracks from Las Vegas to Daggett, Calif., was unclear. The company said it has paid a $600,000 deposit with Union Pacific that it would lose if it did not post another $27.4 million letter of credit by March 31. Union Pacific set a price of $56 million to cover all the trackage rights fees and improvements needed to run freight and passenger trains on the same line.
The annual report and other company releases didn’t say whether the terms were met or whether the agreement was canceled by missing the deadline.
■ There is still no trackage agreement with Burlington Northern Santa Fe for the route’s second half, from Daggett to the Los Angeles suburb of Fullerton or for Amtrak to operate the trains as previously announced.
■ No location or price is given for the 16 railcars the company said it has purchased from Transportation Management Services, a company owned by board member John Marino. The report noted that the company does not have enough money to renovate them into the luxury cars that form the heart of the X Train concept, which calls for passengers to pay $99 one way for a seat, food, drink and a Las Vegas club atmosphere.
The company posted a $6.8 million loss and no revenues for the year ended March 31. This brings the cumulative loss, both pushing the X Train and a previous focus on real estate finance, to $18.6 million.
On June 11, a special shareholders meeting approved a reverse 20-for-1 stock split to reduce the massive dilution caused by issuing shares to cover the ones sold to raise operating capital. In three years, the share count had ballooned nearly 1,100 percent to 159.1 million in April.
Shares closed Friday unchanged at 8 cents on trading volume of about 73,000 shares on the Over-The-Counter Bulletin Board.
Contact reporter Tim O’Reiley at email@example.com or 702-387-5290.