The party has ended before it began on train travel between Las Vegas and Los Angeles.
For four years, penny stock company Las Vegas Railway Express has promoted its idea to restart rail service between the two areas using conventional equipment outfitted for a good-time ride, what it calls the X Train.
But in its second-quarter report filed Tuesday, the company disclosed that it had scrapped its previously announced strategy of raising $100 million to launch the service, including paying the Union Pacific Railroad $67 million to improve and expand its tracks between Las Vegas and Daggett, Calif.
As a result, the company forfeited a $600,000 deposit paid to Union Pacific last year.
When the Union Pacific deal was announced one year ago, Las Vegas Railway Express CEO Michael Barron said in a statement, “This moment will be long remembered as an important milestone in providing a great experience for X Train customers.”
This managed to attract widespread attention.
“No longer was the X Train followed by a few news organizations in Southern Nevada,” publicist Mick Bailey wrote on the company’s website. “(An) Associated Press article was picked up by news agencies around the country.”
Barron promised an inaugural run on the upcoming New Year’s Eve, one of several start dates that have gone by the boards. The initial concept called for a $99 fare each way, including food and drink, for about a five-hour ride.
The quarterly report said the company will pursue an “off balance sheet” deal being put together by unidentified investors to restart Amtrak service for the first time since 1997, with X Train party cars attached.
Amtrak spokeswoman Vernae Graham said in a statement, “They have approached us but we have no agreement.”
Barron planned to have Amtrak crews run the original version of the party trains, but no contract was ever signed. Likewise, the Las Vegas Railway Express never reached a deal with BNSF, which owns about half the track between Las Vegas and the proposed terminus at Fullerton, Calif., near Disneyland.
Replacing the Union Pacific transaction with an off balance sheet would prevent shareholder dilution, Barron said in a statement.
However, the number of shares the past year alone has quadrupled to 164.7 million, according to company financial statements, as the company has sold stock and secured loans that could be repaid with stock to raise the money to stay in business.
The number of shares it could potentially owe would take it above the currently authorized limit of 200 million.
Barron’s latest pitch calls for attaching the casino-style passenger cars to regular Amtrak routes, with the first one on Dec. 2 to connect to an unspecified city pair anywhere in the country. In June, a company statement said it would start accepting bookings the next month for what it called Casino Fun Trains on 10 different routes, such as Houston to New Orleans.
The announced xtrainvacations.com website does not work, however.
Graham said Amtrak has no agreements to allow Las Vegas Railway Express to attach any cars to regular trains. Moreover, she said, the company has not said where or if any cars are ready for service.
Nevertheless, the company seeks to lease 20 acres owned by North Las Vegas for a station. Previously, Barron talked about locating next to the Plaza downtown, but that plan was dropped.
Contact reporter Tim O’Reiley at firstname.lastname@example.org or at 702-387-5290.