10-Q

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 September 30, 2018

Commission file number: 333-218746

LAS VEGAS XPRESS, INC.

Formerly X Rail Entertainment, 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)

9480 S. Eastern Ave, Suite 205

Las Vegas, NV  89123

 (Address of principal executive offices)

(702) 481-2343

(Registrant's telephone number, including area code)

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. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Non-accelerated filer	☐
Accelerated filer	☐	Smaller reporting 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 16, 2018 was 711,258,471.

LAS VEGAS XPRESS, INC.

(formerly X Rail Entertainment, Inc.)

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION		PAGE
Item 1.	Condensed Financial Statements:	3
	Balance Sheets – September 30, 2018 and December 31, 2017 (Unaudited)	3
	Statements of Operations - for the Three and Nine Months Ended September 30, 2018 and 2017 (Unaudited)	4
	Statements of Cash Flows - for the Nine Months Ended September 30, 2018 and 2017 (Unaudited)	5
	Statement of Shareholders' Equity – for the Nine Months Ended September 30, 2018 (Unaudited)	6
	Notes to Financial Statements (Unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	23
SIGNATURES		24

2

PART I   FINANCIAL INFORMATION

 LAS VEGAS XPRESS, INC.

(formerly X Rail Entertainment, Inc.)

 BALANCE SHEETS (Unaudited)

	September 30,			December 31,
	2018			2017
Assets
Current assets
Cash	$	3,259		$	56,983
Prepaid expense		378			-
Deposits		-			235
Total current assets		3,637			57,218
Property and equipment, net		125,000			125,000
Total assets	$	128,637		$	182,218
Liabilities and Stockholders' Equity (Deficit)
Current liabilities
Accounts payable	$	75,873		$	44,117
Accrued expenses		940,462			305,961
Unearned revenue		3,461			3,042
Notes payable to related parties		414,089			379,153
Notes payable		3,950			-
Convertible notes payable (net of debt discount of $80,542 and $324,121, respectively)		374,158			45,779
Derivative liability		3,452,179			1,787,063
Total current liabilities		5,264,172			2,565,115
Total liabilities		5,264,172			2,565,115
Commitments and contingencies
Stockholders' equity (deficit)
Preferred stock, $0.00001 par value, 2,011,000 shares authorized, 98,800 and 98,800 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively		1			1
Common stock, $0.00001 par value, 10,000,000,000 shares authorized, 101,258,471 and 118,049 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively		1,013			1
Additional paid-in capital		17,343,236			12,968,634
Accumulated (deficit)		(22,479,785	)		(15,351,533	)
Total stockholders' equity (deficit)		(5,135,535	)		(2,382,897	)
Total liabilities and stockholders' equity (deficit)	$	128,637		$	182,218

See accompanying notes to these unaudited condensed financial statements

3

 LAS VEGAS XPRESS, INC.

(formerly 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,
	2018			2017			2018			2017
Revenues		-		$	-		$	13,145		$	32,259
Cost of sales		-			-			(8,754	)		(46,051	)
Gross loss		-			-			4,391			(13,792	)
Operating Expenses:
Compensation and payroll taxes		1,370,921			137,569			3,989,669			391,274
Selling, general and administrative		42,408			72,429			167,875			272,977
Professional fees		178,147			101,313			609,996			565,438
Total expenses		1,591,476			311,311			4,767,540			1,229,689
Loss from operations		(1,591,476	)		(311,311	)		(4,763,149	)		(1,243,481	)
Other income (expense)
Excess derivative liability expense		-			-			1,317,269			-
Interest expense		(141,822	)		(133,630	)		(881,718	)		(727,727	)
Loss on disposal of assets		-			(629,270	)		-			(629,270	)
Gain (loss) on change in value of derivative liability		(2,625,026	)		1,764			(2,800,655	)		(7,789	)
Total other income (expense)		(2,766,848	)		(761,136	)		(2,365,104	)		(1,364,786	)
Net income (loss) from operations before provision for income taxes		(4,358,325	)		(1,072,447	)		(7,128,252	)		(2,608,267	)
Provision for income taxes		-			-			-			-
Net income (loss)	$	(4,358,325	)	$	(1,072,447	)	$	(7,128,252	)	$	(2,608,267	)
Net income (loss) per share, basic and diluted	$	(9.6214	)	$	(22.997	)	$	(2.703	)	$	(59.821	)
Weighted average number of common shares outstanding, basic and diluted		452,982			46,635			2,636,921			43,601

See accompanying notes to these unaudited condensed financial statements

4

 LAS VEGAS XPRESS, INC.

(formerly X Rail Entertainment, Inc.)

STATEMENTS OF CASH FLOWS

 (Unaudited)

	Nine months ended			Nine months ended
	September 30,			September 30,
	2018			2017
Cash flows from operating activities
Net loss	$	(7,128,252	)	$	(2,608,267	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount on notes payable		80,542			156,330
Common stock issued for services		230,000			130,000
Common stock issued for compensation		3,505,927			26,889
Derivative expense related to convertible note payable		2,800,655			88,395
Excess derivative liability expense		(1,317,269	)		-
Warrant expense		400,000			499,196
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		1,198,263			182,653
Unearned revenue		(419	)		1,107
Deposits and prepaid expense		143			(11,960	)
Net cash used in operating activities		(230,410	)		(1,535,657	)
Cash flows from investing activities
Purchases of property and equipment		-			708,160
Net cash used in investing activities		-			708,160
Cash flows from financing activities
Repayments on convertible notes payable		(140,200	)		(82,000	)
Proceeds from convertible notes payable		225,000			19,100
Repayments on related party notes payable		(8,450	)		(53,344	)
Proceeds from related party notes payable		43,386			145,272
Repayments on notes payable		(2,050	)		-
Proceeds from on notes payable		6,000			-
Proceeds from exercise of warrant		-			180,000
Proceeds from stock purchases		53,000			421,000
Net cash provided by financing activities		176,686			630,028
Net change in cash		(53,724	)		(197,469	)
Cash, beginning of the period		56,983			202,169
Cash, end of the period	$	3,259		$	4,700
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		140,200			88,395
Debt discount on convertible notes		243,579			205,224

See accompanying notes to these unaudited condensed financial statements

5

 LAS VEGAS XPRESS, INC.

(formerly X Rail Entertainment, Inc.)

STATEMENTS OF SHAREHOLDERS' EQUITY

 (Unaudited)

												Additional
	Common Stock						Preferred Stock					Paid-in			Accumulated
	Shares			Amount			Shares			Amount		Capital			Deficit			Total
Balance December 31, 2016		41,671		$	0			98,798		$	1	$	8,286,593		$	(7,966,161	)	$	320,434
Stock issued for services		3,292			0			-			-		280,150			-			280,150
Stock issued for notes and interest conversion		16,037			0			-			-		672,952			-			672,952
Stock issued for cash and warrants		3,436			0			-			-		498,940			-			498,940
Stock issued for compensation		53,000			1			4			-		3,049,999						3,050,000
Stock issued for warrant exercise		240			0			-			-		180,000			-			180,000
Stock issued for shares exchange		377			0			-			-		-						0
Stock cancelled		(3	)		(0	)		(2	)		-		(0	)		-			(0	)
Net loss		-			-			-			-		-			(7,385,372	)		(7,385,372	)
Balance December 31, 2017		118,049		$	1			98,800		$	1	$	12,968,634		$	(15,351,533	)	$	(2,382,897	)
Stock issued for compensation		90,769,617			908			-			-		3,499,117			-			3,500,025
Stock issued for cash		53,000			1			-			-		52,999			-			53,000
Stock issued for services		10,025,000			100			-			-		229,900			-			230,000
Stock issued for notes and interest conversion		292,052			3			-			-		192,586			-			192,589
Warrants expense													400,000			-			400,000
Stock split adjustment		753											-			-			-
Net loss		-			-			-			-		-			(7,128,252	)		(7,128,252	)
Balance September 30, 2018		101,258,471		$	1,013			98,800		$	1	$	17,343,236		$	(22,479,785	)	$	(5,135,535	)

See accompanying notes to these unaudited condensed financial statements

6

 LAS VEGAS XPRESS, INC.

(formerly X Rail Entertainment, Inc.)

NOTES TO FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2018 AND 2017

 (Unaudited)

(1)           Organization and description of business

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 losses of $7,128,252 for the nine months ended September 30, 2018.  The Company also has an accumulated deficit of $22,479,785, and a negative working capital of $5,260,535 as of September 30, 2018, as well as outstanding convertible notes payable of $454,700, before debt discount of $80,542.  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.

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") 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, 2018 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, 2017.

Risks and Uncertainties:

The Company operates in an 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.

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. Actual results could differ from those estimates.

7

Cash and Cash 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 September 30, 2018 and December 31, 2017, the Company had $3,259 and $56,983 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 September 30, 2018, we recorded the rail cars on the balance sheet at $125,000, net of accumulated depreciation. The rail cars are currently not depreciated as they are not in service and not ready to run. The rail cars require substantial investment to retrofit.

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 nine months ended September 30, 2018, or 2017.  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 nine months ended September 30, 2018 and 2017.

Related Parties

The Company follows ASC 850, "Related Party Disclosures," for the identification of related parties and disclosure of related party transactions (see Note 4).

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 September 30, 2018, and December 31, 2017, 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 nine months ended September 30, 2018, and 2017 as the amounts are anti-dilutive.  As of September 30, 2018, the Company had 2,996 outstanding warrants and convertible debt of $454,700, before debt discount of $80,542, which were all excluded from the computation as they were anti-dilutive and are convertible into 23,552,877 shares of common stock. As of December 31, 2017, the Company had 2,996 outstanding warrants and convertible debt of $369,900, before debt discount of $324,121, which were all excluded from the computation as they were anti-dilutive.

8

Revenue Recognition

The Company recognizes revenue from the sale of products and services in accordance with ASC 606,"Revenue Recognition" following the five steps procedure:

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when the entity satisfies a performance obligation

The Company recognizes revenue when it satisfies its obligation by transferring control of the good or service to the customer. A performance obligation is satisfied over time if one of the following criteria are met:

a.	the customer simultaneously receives and consumes the benefits as the entity performs;
b.	the entity's performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
c.	the entity's performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date.

Since the Company's revenues are generated when products are sold with no remaining obligations on the part of the Company, revenue is recognized at the time of sale.

 Fair Value of Financial 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;

9

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 September 30, 2018, and December 31, 2017, measured at fair value on a recurring basis:

September 30, 2018	Level 1			Level 2			Level 3			Total
Liabilities
Derivative Liabilities		$	-		$	-		$	3,452,179		$	3,452,179
December 31, 2017	Level 1			Level 2			Level 3			Total
Liabilities
Derivative Liabilities		$	-		$	-		$	1,787,063		$	1,787,063

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 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 nine months ended September 30, 2018 and 2017, the Company incurred $3,500,025 and $0 in stock-based compensation to employees and directors.

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 to value options and warrants issued during the nine months ended September 30, 2018 were as follows:

Variables	Values
Stock price	$	0.1500
Exercise Price	$	697.29
Term	1.41-2.58 years
Risk Free Rate		0.25	%
Volatility		806.8% - 618.2	%

During the nine months ended September 30, 2018 and 2017, the Company incurred $230,000 and $130,000 for common stock issued for outside services.

New Accounting Pronouncements:

None.

10

(3)           Property and Equipment

Property and equipment consisted of the following.

	September 30,		December 31,
	2018		2017
Rail cars (not in service)	$	125,000	$	125,000
Less: accumulated depreciation		-		-
	$	125,000	$	125,000

Based on management analysis as of September 30, 2018 and December 31, 2017, there is no indication of impairment.

(4)           Related Party Notes Payable

A summary of outstanding notes payable is as follows:

	September 30,		December 31,
	2018		2017
Promissory note, dated  December 15, 2015, bearing interest at 10% annually, payable on demand	$	50,010	$	49,910
Promissory note, dated  December 15, 2015, bearing interest at 10% annually, payable on demand		39,101		39,101
Promissory note, dated  December 15, 2015, bearing interest at 10% annually, payable on demand		69,794		74,044
Promissory note, dated  September 30, 2015, bearing no interest, payable on demand		192,940		154,998
Promissory note, dated  September 30, 2017, bearing 10% interest, payable on demand		59,044		53,700
Promissory note, dated  September 30, 2017, bearing 10% interest, payable on demand		3,200		7,400
	$	$ 414,089	$	379,153

During the nine months ended September 30, 2018, the Company repaid $4,200 of promissory note dated September 30, 2017 to Wanda Witoslawski (the Chief Financial Officer of the Company), leaving the balance outstanding of $3,200 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company borrowed $100 of promissory note dated December 15, 2015 to Wanda Witoslawski (the Chief Financial Officer of the Company), leaving the balance outstanding of $50,010 as of September 30, 2018.

11

During the nine months ended September 30, 2018, the Company borrowed $37,942 of promissory note dated September 30, 2017 to Las Vegas Railway Express, Inc., leaving the balance outstanding of $192,940 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company added $5,344 to the promissory note dated September 30, 2017 to Allegheny Nevada Holdings Corporation (Michael A. Barron, the CEO and President of the Company, is a 100% owner and President of Allegheny Nevada Holdings Corporation), leaving the balance outstanding of $59,044 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company repaid $4,250 of promissory note dated December 15, 2015 to Dianne David, leaving the balance outstanding of $69,794 as of September 30, 2018.

(5)           Convertible Notes Payable

The following summarizes the book value of the convertible notes payable outstanding as of September 30, 2018 and December 31, 2017:

	September 30,			December 31,
	2018			2017
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.		19,100			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			40,800
Promissory note, dated November 1, 2017, bearing interest of 12% annually, payable on August 10, 2018, convertible to common stock at a discount of 42% of the lowest two traded prices of the common stock during the 15 trading days  prior to the conversion date.		-			45,000
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		79,450			85,000
Promissory note, dated December 18, 2017, bearing interest of 12% annually, payable within a year convertible at a conversion rate equal to 50% of the lowest of: (i) the lowest trading price during the twenty trading days prior to the conversion, or (ii) the lowest trading price during the 20 trading days preceding the date of this note		7,150			40,000
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.		112,000			112,000
Promissory note, dated December 21, 2017, bearing interest of 12% annually, payable on September 30, 2018, convertible to common stock at a discount of 49% of the lowest two traded prices of the common stock during the 30 trading days  prior to the conversion date.		-			28,000
Promissory note, dated April 17, 2018, bearing interest of 8% annually, payable on October 17, 2019, convertible to common stock at $15
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.		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			-
Promissory note, dated May 14, 2018, bearing interest of 12% annually, payable on November 14, 2018, convertible to common stock at a discount of 55% of the average of 2 lowest traded prices of the common stock during the 30 trading days  prior to the conversion date.		50,000			-
Convertible notes before debt discount		454,700			369,900
Less debt discount		(80,542	)		(324,121	)
Total outstanding convertible notes payable	$	374,158			45,779

12

(6)           Notes Payable

On June 27, 2018, the Company issued a promissory note to an investor for $4,100 payable by December 27, 2018 with $615 in interest expense.  

On September 28, 2018, the Company issued a promissory note to the investor for $1,900 payable by March 27, 2019 with $285 in interest expense.  

(7)           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 September 30, 2018 and December 31, 2017. 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 in September 30, 2018 and December 31, 2017:

	Nine Months Ended			Year Ended
	September 30, 2018			December 31, 2017
Expected term	0.1- 0.58 years			0.4 – 0.96 years-
Expected average volatility		987.1	%		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 became convertible as of September 30, 2018 amounted to $3,452,179. During the nine months ended September 30, 2018, $80,542 of the value assigned to the derivative liability was recognized as a debt discount to the convertible notes and $1,135,539 was recorded as loss on change in fair value of derivative liability.

	Nine Months Ended September 30, 2018				Year Ended December 31, 2017
	Conversion Feature				Conversion Feature
	of				of
	Notes Payable				Notes Payable
Beginning balance, January 1			1,787,063				-
Additional issuances			-				1,079,942
Change in value of derivative liability			2,800,655				707,121
Excess derivative liability expense			(1,135,539	)			-
Ending balance		$	3,452,179			$	1,787,063

13

(8)           Equity

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, 10,000 shares of preferred A-2, 1,000,000 shares of preferred B and 1,000 shares of preferred C class.  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. 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.

During the nine months ended September 30, 2018, the Company issued an aggregate of 90,769,617 shares of common stock for compensation of $3,505,927 and 10,025,000 shares of common stock for outside services of $230,000. During the nine months ended September 30, 2017, the Company issued an aggregate of 292 shares of common stock for services resulting in an expense of $130,000. 

During the nine months ended September 30, 2018, the Company issued 292,052 shares of common stock for note and interest conversion of $192,588.  During the nine months ended September 30, 2017 the Company issued 4,346 shares of common stock for the conversion of $88,395 of outstanding notes payable and interest.

There were no warrants exercised during the nine months ended September 30, 2018. During the nine months ended September 30, 2017, the Company issued 2,400 shares of common stock for the exercise of warrant.  

During the nine months ended September 30, 2018, the Company has issued 53,000 shares of common stock for cash of $53,000.  During the nine months ended September 30, 2017, the Company issued 2,324 shares of common stock for cash of $421,000.

During the nine months ended September 30, 2017, the Company cancelled 2 shares of preferred stock series A-2 issued to Michael Barron and issued to him 4 shares of preferred stock series C. Each share of preferred stock series C is not convertible into common stock shares. Total aggregate issued shares of series C preferred stock, at any given time, have voting rights equal to four times the sum of the total number of shares of common stock and total number of shares of preferred stock series A, A-2 and B which are issued and outstanding at the time of voting.

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 warrants were granted for compensation.

The below table summarizes warrant activity during the nine months ended September 30, 2018:

	Number of Shares		Weighted- Average Exercise  Price
Balances as of December 31, 2017		1,436	$	750.00
Granted		1,140	$	12.10
Exercised		-		-
Forfeited		-		-
Balances as of September 30, 2018		2,576	$	423.46

14

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 nine months ended September 30, 2018 and 2017:

	Nine Months Ended
	September 30,
	2018				2017
Exercise price		$	423.46			$	750
Expected term	1.41 – 2.58 years					1.88-2.9 years
Expected average volatility			742.95	%			642.19	%
Expected dividend yield			-				-

The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2018:

Warrants Outstanding							Warrants Exercisable
Number of Shares		Weighted Average Remaining Contractual life (in years)		Weighted  Average Exercise Price			Number of Shares		Weighted Average Exercise Price
	2,576		1.63		$	423.46		2,576		$	423.46

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 September 30, 2018, for those warrants for which the quoted market price was in excess of the exercise price ("in-the-money" warrants). As of September 30, 2018, the aggregate intrinsic value of warrants outstanding was $0 based on the closing market price of $0.15 on September 30, 2018.

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 nine months ended September 30, 2018 were as follows:
        

Variables	Values
Stock price	$	0.1500
Exercise Price	$	697.29
Term	1.41-2.58 years
Risk Free Rate		0.25	%
Volatility		806.8% - 618.2	%

(9)          Related Party Transactions

During the nine months ended September 30, 2018, the Company repaid $4,200 of promissory note dated September 30, 2017 to Wanda Witoslawski (the Chief Financial Officer of the Company), leaving the balance outstanding of $3,200 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company borrowed $100 of promissory note dated December 15, 2015 from Wanda Witoslawski (the Chief Financial Officer of the Company), leaving the balance outstanding of $50,010 as of September 30, 2018.

15

During the nine months ended September 30, 2018, the Company borrowed $37,942 of promissory note dated September 30, 2017 to Las Vegas Railway Express, Inc., leaving the balance outstanding of $192,940 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company added $5,344 to the promissory note dated September 30, 2017 to Allegheny Nevada Holdings Corporation (Michael A. Barron, the CEO and President of the Company, is a 100% owner and President of Allegheny Nevada Holdings Corporation), leaving the balance outstanding of $59,044 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company repaid $4,250 of promissory note dated December 15, 2015 to Dianne David, leaving the balance outstanding of $69,794 as of September 30, 2018.

           
(10)         Subsequent Events

In October 2018, the Company issued 550,000,000 shares of common stock for compensation to management and 60,000,000 shares of common stock for outside services.

16

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

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, Las Vegas Xpress, Inc., 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'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 consolidated 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, The X Train, currently in the planning stages, will be an excursion railroad between metropolitan areas and resort/casino destinations, X Wine Railroads, which is a rail excursion from metropolitan areas to wine regions, and Club X Train, currently in the planning stages, will be a riders membership club for X Train customers.

X Train

The X Train will be an excursion passenger rail service between Los Angeles and Las Vegas. We expect service to begin in mid year 2019. 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 its own common carrier railroad. X Train 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. It will be scheduled as a Friday through Sunday service with passengers boarding the train at the San Bernardino Station and arriving at a new station to be built in Las Vegas and owned 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 10 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.

The Company has hired First Transit as its haulage company, a $7 billion a year rail/transport company in the UK, hauling over 300 million passengers by rail each year. First Transit is the domestic arm of First Group, the UK parent. First Transit also owns Greyhound Lines, a $2.8 billion subsidiary which will be providing bus transfer and pick up services for the X train.

To commence commercial service of the Las Angeles to Las Vegas route, we will need to negotiate and secure the necessary rights, equipment and facilities. These items include: securing a regularly scheduled train agreement from First Transit 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. This has been completed.  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 San Bernardino and in Las Vegas. We expect the X Train to begin running in July 2019.

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Metrolink

The company is negotiating a joint venture co-marketing arrangement with Metrolink, the Los Angeles commuter rail system. The plan is to have Metrolink service access to the X train departure station in San Bernardino from its 56 stations in the southland. Over 12 million people annually ride Metrolink trains. We are planning to tap into this market by having a joint marketing of the Vegas service to Metrolink customers.

X Wine Railroad

The Company's X Wine Railroad service from LA Union Station to Santa Barbara California runs 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. Service is planned to run in 2018 from February to November. The X Wine Railroad provides 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 provides private access to these vineyards on an exclusive basis. Ticket prices are $369 per person, all inclusive. 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.

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 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 January 2019.

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.

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Results of Operations for the Three Months Ended September 30, 2018 as Compared to the Three Months Ended September 30, 2017

The following is a comparison of the results of operations for the three months ended September 30, 2018 and 2017.

	Three months ended
	September 30,			September 30,
	2018			2017			$ Change			% Change
Revenues	$	-		$	-		$	-			0.0	%
Cost of sales		-			-			-			0.0	%
Gross profit (loss)		-			-			-			0.0	%
Operating Expenses:
Compensation and payroll taxes	$	1,370,921		$	137,569		$	1,233,352			896.5	%
Selling, general and administrative		42,408			72,429			(30,021	)		-41.4	%
Professional fees		178,147			101,313			76,834			75.8	%
Total expenses		1,591,476			311,311			1,280,165			411.2	%
Loss from operations		(1,591,476	)		(311,311	)		(1,280,165	)		411.2	%
Other income (expense)
Excess derivative liability expense		-			-			-			0.0	%
Interest expense		(141,822	)		(133,630	)		(8,192	)		6.1	%
Loss on disposal of assets		-			(629,270	)		-			-100.0	%
Gain (loss) on change in derivative liability		(2,625,026	)		1,764			(2,626,790	)		-148911.0	%
Total other income (expense)		(2,766,848	)		(761,136	)		(2,005,712	)		263.5	%
Net income (loss) from operations before provision for income taxes		(4,358,325	)		(1,072,447	)		(3,285,878	)		306.4	%
Provision for income taxes		-			-			-			0.0	%
Net income (loss)	$	(4,358,325	)	$	(1,072,447	)	$	(3,285,878	)		306.4	%

Revenue

During the three months ended September 30, 2018 and 2017, the Company has not generated any revenue.

Operating Expenses

Compensation expense increased by $1,233,352, or 896.5%, during the three months ended September 30, 2018 as compared to the three months ended September 30, 2017.  The increase in compensation expense was primarily due to issuances of stock to management.  Selling, general and administrative expenses decreased by $30,021, or 41.4%, during the three months ended September 30, 2018 as compared to the same period in 2017 primarily due to decrease in travel and office expenses. Professional fees increased by $76,834, or 75.8%, during 2018 as compared to 2017 due primarily to increases in consulting services paid with shares.  

19

Other (Expense) Income

Derivative expense decreased by $2,626,790 during the quarter ended September 30, 2018 as compared to the same period in 2017 due to lower stock price and change in derivative liability.  Interest expense increased by $8,192, or 6.1%, due to higher expense in convertible promissory notes.

Results of Operations for the Nine Months Ended September 30, 2018 as Compared to the Nine Months Ended September 30, 2017

The following is a comparison of the results of operations for the nine months ended September 30, 2018 and 2017.
                                   

	Nine months
	September 30,			September 30,
	2018			2017			$ Change			% Change
Revenues	$	13,145		$	32,259		$	(19,114	)		-59.3	%
Cost of sales		(8,754	)		(46,051	)		37,297			-81.0	%
Gross profit (loss)		4,391			(13,792	)		18,183			-131.8	%
Operating Expenses:
Compensation and payroll taxes	$	3,989,669		$	391,274		$	3,598,395			919.7	%
Selling, general and administrative		167,875			272,977			(105,102	)		-38.5	%
Professional fees		609,996			565,438			44,558			7.9	%
Total expenses		4,767,540			1,229,689			3,537,851			287.7	%
Loss from operations		(4,763,149	)		(1,243,481	)		(3,519,668	)		283.0	%
Other income (expense)
Excess derivative liability expense		1,317,269			-			1,317,269			100.0	%
Interest expense		(881,718	)		(727,727	)		(153,991	)		21.2	%
Loss on disposal of assets		-			(629,270	)		629,270			100.0	%
Loss on change in derivative liability		(2,800,655	)		(7,789	)		(2,792,866	)		100.0	%
Total other income (expense)		(2,365,104	)		(1,364,786	)		(1,000,318	)		73.3	%
Net income (loss) from operations before provision for income taxes		(7,128,252	)		(2,608,267	)		(4,519,985	)		173.3	%
Provision for income taxes		-			-			-			-
Net income (loss)	$	(7,128,252	)	$	(2,608,267	)	$	(4,519,985	)		173.3	%

Revenue

During the nine months ended September 30, 2018 and 2017, the Company generated some revenue from operating the wine train in Santa Barbara, CA. Gross profit increased by $18,183, or 131.8% during the nine months ended September 30, 2018 compared to the same period in 2017 due to higher ticket prices and lower costs.  Revenue was generated from selling train tickets, food and beverage and wine tours.

Operating Expenses

Compensation expense increased by $3,598,395, or 919.7%, during the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017.  The increase in compensation expense was primarily due to issuances of stock to management.  Selling, general and administrative expenses decreased by $105,102, or 38.5%, during the nine months ended September 30, 2018 as compared to the same period in 2017 primarily due to decrease in travel and office expenses. Professional fees increased by $44,558, or 7.9%, during 2018 as compared to 2017 due primarily to increase in consulting services.  

20

Other (Expense) Income

Interest expense increased by $153,991, or 21.2%, during the nine months ended September 30, 2018 as compared to the same period in 2017 due to issuances of conversion of certain promissory notes.  During the nine months ended September 30, 2018, the Company accrued loss on change in fair value of derivative liability of $2,800,655. During the nine months ended September 30, 2017 there was a loss was $7,789. Gain on change in derivative liability increased by $1,317,269, or 100.0% as compared to the same period in 2017, due to change in market price of the stock.

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 net losses of $7,128,252 for the nine months ended September 30, 2018 and $2,608,267 for the nine months ended September 30, 2017.  The Company also has an accumulated deficit of $22,479,785 and a negative working capital of $5,260,535 as of September 30, 2018, as well as outstanding convertible notes payable of $454,700, before debt discount of $80,542.  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.

       
Cash Flows

Net cash used in operating activities for the nine months ended September 30, 2018 and 2017 were $230,410 and $1,535,657, respectively.  Cash used in operating activities for the nine months ended September 30, 2018 and 2017 were primarily due to net losses of $7,128,252 and $2,608,267, respectively.  During the nine months ended September 30, 2018, the net loss included significant non-cash expenses of $3,505,927 in stock issued for compensation, $80,542 in amortization of discounts on notes payable, $400,000 in warrants expense, $2,800,655 in derivative expense related to convertible notes payable, $1,198,263 in changes in operating assets and liabilities.  During the nine months ended September 30, 2017, the net loss included significant non-cash expenses of $130,000 in stock issued for services and $156,330 in amortization of discounts on notes payable, $499,196 in warrants expense and $171,800 in changes in operating assets and liabilities.

There was no net cash used in investing activities during the nine months ended September 30, 2018.  Net cash used in investing activities during the nine months ended September 30, 2017 was $708,160 primarily due to the capitalized costs towards the rail cars. 

Net cash provided by financing activities for the nine months ended September 30, 2018 amounted to $176,686, which consisted of $225,000 in proceeds from the issuance of convertible notes payable, $8,450 in repayments on related party notes payable and $140,200 in repayments on convertible notes payable. Net cash provided by financing activities for the nine months ended September 30, 2017 was $630,028 which consisted of $19,100 in proceeds from convertible notes payable, $53,344 in repayments on related party notes payable, $145,272 in proceeds from related party notes payable and $421,000 from proceeds from stock purchases.  

21

Description of Indebtedness

For a complete description of our outstanding debt as of September 30, 2018 and December 31, 2017, see Notes 4 and 5 to the financial statements.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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 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 September 30, 2018. 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 September 30, 2018, 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 September 30, 2018 in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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.

22

Item 1A. Risk Factors.

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 nine months ended September 30, 2018, the Company issued shares of its common stock as follows:

· 90,769,617 shares of common stock issued for compensation valued at $3,505,927.

· 10,025,000 shares of common stock issued for services of $230,000.

· 292,052 shares of common stock issued for notes conversion of $192,588.

· 53,000 shares of common stock for cash of $53,000.

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.

Item 3.  Default Upon Senior Securities

As of September 30, 2018 we are not in default on any of our borrowings.

Item 4.  Mine Safety Disclosures

Not applicable to our Company.

Item 5.  Other Information.

None

Item 6.  Exhibits.

Exhibit No.	Description
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act Of 2002.
32.	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act Of 2002

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

23

SIGNATURES

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: November 16, 2018	Las Vegas Xpress, Inc.
	By: /s/ Michael A. Barron
	Chief Executive Officer (principal executive officer)
Date: November 16, 2018
	By: /s/ Wanda Witoslawski
	Chief Financial Officer (principal financial officer)

24

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES – OXLEY ACT OF 2002

I, Michael A. Barron, certify that:

1.      I have reviewed this quarterly report on Form 10-Q of Las Vegas Xpress, Inc.;

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.      The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.      The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 16, 2018

/s/  Michael A. Barron

Michael A. Barron

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL ACCOUNTING OFFICER PURSUANT TO SECTION 302 OF THE SARBANES – OXLEY ACT OF 2002

I, Wanda Witoslawski, certify that:

1.      I have reviewed this quarterly report on Form 10-Q of Las Vegas Xpress, Inc.;

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.      The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.      The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 16, 2018

/s/  Wanda Witoslawski

Wanda Witoslawski

Chief Financial Officer

EX-32.1

Exhibit 32

CERTIFICATION PURSUANT TO 18 U.S.C. Sec. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Las Vegas Xpress, Inc. (the "Company") on Form 10-Q for the quarter ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Michael A. Barron, Chief Executive Officer and I, Wanda Witoslawski, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Michael A. Barron

Michael A. Barron

Chief Executive Officer

/s/  Wanda Witoslawski

Wanda Witoslawski

Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 16, 2018
Details
Registrant Name	LAS VEGAS XPRESS, INC.
Registrant CIK	0001697935
SEC Form	10-Q
Period End date	Sep. 30, 2018
Fiscal Year End	--12-31
Trading Symbol	lvxi
Tax Identification Number (TIN)	880203182
Number of common stock shares outstanding		711,258,471
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Small Business	true
Emerging Growth Company	false
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Incorporation, State Country Name	Nevada
Entity Address, Address Line One	9480 S. Eastern Ave
Entity Address, Address Line Two	Suite 205
Entity Address, City or Town	Las Vegas
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89123
City Area Code	(702)
Local Phone Number	481-2343

XML

Balance Sheets - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Current assets
Cash	$ 3,259	$ 56,983
Prepaid expense	378	0
Deposits	0	235
Total current assets	3,637	57,218
Property and equipment, net	125,000	125,000
Total assets	128,637	182,218
Current liabilities
Accounts payable	75,873	44,117
Accrued expenses	940,462	305,961
Unearned revenue	3,461	3,042
Notes payable to related parties	414,089	379,153
Notes payable	3,950	0
Convertible notes payable (net of debt discount of $80,542 and $324,121, respectively)	374,158	45,779
Derivative liability	3,452,179	1,787,063
Total current liabilities	5,264,172	2,565,115
Total liabilities	5,264,172	2,565,115
Commitments and contingencies	0	0
Stockholders' equity (deficit)
Preferred Stock	1	1
Common Stock	1,013	1
Additional paid-in capital	17,343,236	12,968,634
Accumulated (deficit)	(22,479,785)	(15,351,533)
Total stockholders' equity (deficit)	(5,135,535)	(2,382,897)
Total liabilities and stockholders' equity (deficit)	$ 128,637	$ 182,218

XML

Balance Sheets - Parenthetical - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Details
Debt Instrument, Unamortized Discount	$ 80,542	$ 324,121
Preferred Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Preferred Stock, Shares Authorized	2,011,000	2,011,000
Preferred Stock, Shares Issued	98,800	98,800
Preferred Stock, Shares Outstanding	98,800	98,800
Common Stock, Par or Stated Value Per Share	$ 0.00001	$ 0.00001
Common Stock, Shares Authorized	10,000,000,000	10,000,000,000
Common Stock, Shares, Issued	101,258,471	118,049
Common Stock, Shares, Outstanding	101,258,471	118,049

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Statement of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Details
Revenues	$ 0	$ 0	$ 13,145	$ 32,259
Cost of sales	0	0	(8,754)	(46,051)
Gross loss	0	0	4,391	(13,792)
Operating Expenses:
Compensation and payroll taxes	1,370,921	137,569	3,989,669	391,274
Selling, general and administrative	42,408	72,429	167,875	272,977
Professional fees	178,147	101,313	609,996	565,438
Total expenses	1,591,476	311,311	4,767,540	1,229,689
Loss from operations	(1,591,476)	(311,311)	(4,763,149)	(1,243,481)
Other Nonoperating Income (Expense)
Excess derivative liability expense	0	0	1,317,269	0
Interest expense	(141,822)	(133,630)	(881,718)	(727,727)
Interest expense	0	(629,270)	0	(629,270)
Gain (loss) on change in value of derivative liability	(2,625,026)	1,764	(2,800,655)	(7,789)
Total other income (expense)	(2,766,848)	(761,136)	(2,365,104)	(1,364,786)
Net income (loss) from operations before provision for income taxes	(4,358,325)	(1,072,447)	(7,128,252)	(2,608,267)
Provision for income taxes	0	0	0	0
Net income (loss)	$ (4,358,325)	$ (1,072,447)	$ (7,128,252)	$ (2,608,267)
Net income (loss) per share, basic and diluted	$ (9.6214)	$ (22.997)	$ (2.703)	$ (59.821)
Weighted average number of common shares outstanding, basic and diluted	452,982	46,635	2,636,921	43,601

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Statements of Shareholders' Equity - USD ($)	Common Stock	Preferred Stock	Additional Paid-in Capital	Retained Earnings	Total
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2016	$ 0	$ 1	$ 8,286,593	$ (7,966,161)	$ 320,434
Shares, Outstanding, Beginning Balance at Dec. 31, 2016	41,671	98,798
Stock issued for services	$ 0	$ 0	280,150	0	280,150
Stock issued for services - shares	3,292
Stock issued for notes and interest conversion	$ 0	0	672,952	0	672,952
Stock issued for notes and interest conversion - shares	16,037
Stock issued for cash and warrants	$ 0	0	498,940	0	498,940
Stock issued for cash and warrants - shares	3,436
Stock issued for warrant exercise	$ 0	0	180,000	0	180,000
Stock issued for warrant exercise - shares	240
Stock issued for shares exchange	$ 0	0	0		0
Stock issued for shares exchange - shares	377
Stock issued for compensation	$ 1	$ 0	3,049,999		3,050,000
Stock issued for compensation - shares	53,000	4
Stock cancelled	$ 0	$ 0	0	0	0
Stock cancelled - shares	(3)	(2)
Net Income (Loss)	$ 0	$ 0	0	(2,608,267)	(2,608,267)
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2017	$ 1	$ 1	12,968,634	(15,351,533)	(2,382,897)
Shares, Outstanding, Ending Balance at Sep. 30, 2017	118,049	98,800
Stockholders' Equity Attributable to Parent, Beginning Balance at Dec. 31, 2017					(2,382,897)
Stock issued for cash	$ 1	$ 0	52,999	0	53,000
Stock issued for cash - shares	53,000
Stock issued for services	$ 100	0	229,900	0	230,000
Stock issued for services - shares	10,025,000
Stock issued for notes and interest conversion	$ 3	0	192,586	0	192,589
Stock issued for notes and interest conversion - shares	292,052
Stock issued for compensation	$ 908	0	3,499,117	0	3,500,025
Stock issued for compensation - shares	90,769,617
Warrants Expense			400,000	0	400,000
Stock split adjustment			0	0	0
Stock Issued During Period, Shares, Reverse Stock Splits	753
Net Income (Loss)	$ 0	0	0	(7,128,252)	(7,128,252)
Stockholders' Equity Attributable to Parent, Ending Balance at Sep. 30, 2018	$ 1,013	$ 1	$ 17,343,236	$ (22,479,785)	$ (5,135,535)
Shares, Outstanding, Ending Balance at Sep. 30, 2018	101,258,471	98,800

XML

Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Net Cash Provided by (Used in) Operating Activities
Net Income (Loss)	$ (7,128,252)	$ (2,608,267)
Adjustments to Reconcile Net Income (Loss) to Cash Provided by (Used in) Operating Activities
Amortization of Debt Discount (Premium)	80,542	156,330
Stock Issued During Period, Value, Issued for Services	230,000	130,000
Common stock issued for compensation	3,505,927	26,889
Derivative expense related to convertible note payable	2,800,655	88,395
Gain on change in fair value of derivative liability	(1,317,269)	0
Warrant expense	400,000	499,196
Changes in operating assets and liabilities:
Increase (Decrease) in Accounts Payable and Accrued Liabilities	1,198,263	182,653
Increase (Decrease) in Deferred Revenue	(419)	1,107
Increase (Decrease) in Deposits	143	(11,960)
Net cash used in operating activities	(230,410)	(1,535,657)
Net Cash Provided by (Used in) Investing Activities
Purchases of property and equipment	0	708,160
Net Cash Provided by (Used in) Investing Activities	0	708,160
Net Cash Provided by (Used in) Financing Activities
Repayments on convertible notes payable	(140,200)	(82,000)
Proceeds from convertible notes payable	225,000	19,100
Repayments on related party notes payable	(8,450)	(53,344)
Proceeds from related party notes payable	43,386	145,272
Repayments on notes payable	(2,050)	0
Proceeds from on notes payable	6,000	0
Proceeds from exercise of warrant	0	180,000
Proceeds from stock purchases	53,000	421,000
Net Cash Provided by (Used in) Financing Activities	176,686	630,028
Cash and Cash Equivalents, Period Increase (Decrease)	(53,724)	(197,469)
Cash and Cash Equivalents, at Carrying Value, Beginning Balance	56,983	202,169
Cash and Cash Equivalents, at Carrying Value, Ending Balance	3,259	4,700
Supplemental Cash Flow Information
Interest Paid, Including Capitalized Interest, Operating and Investing Activities	0	0
Income Taxes Paid, Net	0	0
Supplemental disclosure of non-cash investing and financing transactions:
Conversion of notes payable and accrued interest to capital	140,200	88,395
Debt discount on convertible notes	$ 243,579	$ 205,224

XML

(1) Organization and Description of Business

9 Months Ended

Sep. 30, 2018

Notes

(1) Organization and Description of Business

(1)           Organization and description of business

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 losses of $7,128,252 for the nine months ended September 30, 2018.  The Company also has an accumulated deficit of $22,479,785, and a negative working capital of $5,260,535 as of September 30, 2018, as well as outstanding convertible notes payable of $454,700, before debt discount of $80,542.  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.

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") 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, 2018 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, 2017.

Risks and Uncertainties:

The Company operates in an 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.

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. Actual results could differ from those estimates.

Cash and Cash 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 September 30, 2018 and December 31, 2017, the Company had $3,259 and $56,983 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 September 30, 2018, we recorded the rail cars on the balance sheet at $125,000, net of accumulated depreciation. The rail cars are currently not depreciated as they are not in service and not ready to run. The rail cars require substantial investment to retrofit.

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 nine months ended September 30, 2018, or 2017.  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 nine months ended September 30, 2018 and 2017.   

Related Parties

The Company follows ASC 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions (see Note 4).

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 September 30, 2018, and December 31, 2017, 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 nine months ended September 30, 2018, and 2017 as the amounts are anti-dilutive.  As of September 30, 2018, the Company had 2,996 outstanding warrants and convertible debt of $454,700, before debt discount of $80,542, which were all excluded from the computation as they were anti-dilutive and are convertible into 23,552,877 shares of common stock. As of December 31, 2017, the Company had 2,996 outstanding warrants and convertible debt of $369,900, before debt discount of $324,121, which were all excluded from the computation as they were anti-dilutive.

Revenue Recognition

The Company recognizes revenue from the sale of products and services in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when the entity satisfies a performance obligation

The Company recognizes revenue when it satisfies its obligation by transferring control of the good or service to the customer. A performance obligation is satisfied over time if one of the following criteria are met:

a.	the customer simultaneously receives and consumes the benefits as the entity performs;
b.	the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
c.	the entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date.

Since the Company’s revenues are generated when products are sold with no remaining obligations on the part of the Company, revenue is recognized at the time of sale.

Fair Value of Financial 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 September 30, 2018, and December 31, 2017, measured at fair value on a recurring basis:

September 30, 2018	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	3,452,179	$	3,452,179
December 31, 2017	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	1,787,063	$	1,787,063

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 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 nine months ended September 30, 2018 and 2017, the Company incurred $3,500,025 and $0 in stock-based compensation to employees and directors.

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 to value options and warrants issued during the nine months ended September 30, 2018 were as follows:

Variables	Values
Stock price	$0.1500
Exercise Price	$697.29
Term	1.41-2.58 years
Risk Free Rate	0.25%
Volatility	806.8% - 618.2%

During the nine months ended September 30, 2018 and 2017, the Company incurred $230,000 and $130,000 for common stock issued for outside services. 

New Accounting Pronouncements:

None.

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(3) Property and Equipment

9 Months Ended

Sep. 30, 2018

Notes

(3) Property and Equipment

(3)            Property and Equipment

Property and equipment consisted of the following.

		September 30,		December 31,
		2018		2017
Rail cars (not in service)	$	125,000	$	125,000
Less: accumulated depreciation		-		-
	$	125,000	$	125,000

Based on management analysis as of September 30, 2018 and December 31, 2017, there is no indication of impairment.

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(4) Related Party Notes Payable

9 Months Ended

Sep. 30, 2018

Notes

(4) Related Party Notes Payable

(4)           Related Party Notes Payable

A summary of outstanding notes payable is as follows:

		September 30,		December 31,
		2018		2017
Promissory note,  dated  December 15, 2015, bearing interest
at 10% annually, payable on demand		$            50,010		$         49,910
Promissory note,  dated  December 15, 2015, bearing interest
at 10% annually, payable on demand		39,101		39,101
Promissory note,  dated  December 15, 2015, bearing interest
at 10% annually, payable on demand		69,794		74,044
Promissory note,  dated  September 30, 2015, bearing no interest,
payable on demand		192,940		154,998
Promissory note,  dated  September 30, 2017, bearing 10% interest,
payable on demand		59,044		53,700
Promissory note,  dated  September 30, 2017, bearing 10% interest,
payable on demand		3,200		7,400
	$	$        414,089	$	379,153

During the nine months ended September 30, 2018, the Company repaid $4,200 of promissory note dated September 30, 2017 to Wanda Witoslawski (the Chief Financial Officer of the Company), leaving the balance outstanding of $3,200 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company borrowed $100 of promissory note dated December 15, 2015 to Wanda Witoslawski (the Chief Financial Officer of the Company), leaving the balance outstanding of $50,010 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company borrowed $37,942 of promissory note dated September 30, 2017 to Las Vegas Railway Express, Inc., leaving the balance outstanding of $192,940 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company added $5,344 to the promissory note dated September 30, 2017 to Allegheny Nevada Holdings Corporation (Michael A. Barron, the CEO and President of the Company, is a 100% owner and President of Allegheny Nevada Holdings Corporation), leaving the balance outstanding of $59,044 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company repaid $4,250 of promissory note dated December 15, 2015 to Dianne David, leaving the balance outstanding of $69,794 as of September 30, 2018.

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(5) Convertible Notes Payable

9 Months Ended

Sep. 30, 2018

Notes

(5) Convertible Notes Payable

(5)           Convertible Notes Payable

The following summarizes the book value of the convertible notes payable outstanding as of September 30, 2018 and December 31, 2017:

		September 30,		December 31,
		2018		2017
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.		19,100		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		40,800
Promissory note,  dated  November 1, 2017, bearing interest
of 12% annually, payable on August 10, 2018, convertible to
common stock at a discount of 42% of the lowest
two traded prices of the common stock during the 15 trading
days  prior to the conversion date.		-		45,000
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		79,450		85,000
Promissory note,  dated  December 18, 2017, bearing interest
of 12% annually, payable within a year convertible at a conversion
rate equal to 50% of the lowest of: (i) the lowest trading price during
the twenty trading days prior to the conversion, or (ii) the lowest
trading price during the 20 trading days preceding the date of this note		7,150		40,000
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.		112,000		112,000
Promissory note,  dated  December 21, 2017, bearing interest
of 12% annually, payable on September 30, 2018, convertible to
common stock at a discount of 49% of the lowest
two traded prices of the common stock during the 30 trading
days  prior to the conversion date.		-		28,000
Promissory note,  dated  April 17, 2018, bearing interest
of 8% annually, payable on October 17, 2019, convertible to
common stock at $15		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.		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		-
Promissory note,  dated  May 14, 2018, bearing interest
of 12% annually, payable on November 14, 2018, convertible to
common stock at a discount of 55% of the average of 2 lowest
traded prices of the common stock during the 30 trading
days  prior to the conversion date.		50,000		-
Convertible notes before debt discount		454,700		369,900
Less debt discount		(80,542)		(324,121)
Total outstanding convertible notes payable	$	374,158	$	45,779

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(6) Note Payable

9 Months Ended

Sep. 30, 2018

Notes

(6) Note Payable

(6)  Notes Payable

On June 27, 2018, the Company issued a promissory note to an investor for $4,100 payable by December 27, 2018 with $615 in interest expense.     

On September 28, 2018, the Company issued a promissory note to the investor for $1,900 payable by March 27, 2019 with $285 in interest expense.         

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(7) Derivative Instruments

9 Months Ended

Sep. 30, 2018

Notes

(7) Derivative Instruments

(7) 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 September 30, 2018 and December 31, 2017. 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 in September 30, 2018 and December 31, 2017:

	Nine Months Ended		Year Ended
	September 30, 2018		December 31, 2017
Expected term	0.1- 0.58 years			0.4 –0.96 years
Expected average volatility	987.1	%		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 became convertible as of September 30, 2018 amounted to $3,452,179. During the nine months ended September 30, 2018, $80,542 of the value assigned to the derivative liability was recognized as a debt discount to the convertible notes and $1,135,539 was recorded as loss on change in fair value of derivative liability.

	Nine Months Ended September 30, 2018		Year Ended December 31, 2017
		Conversion Feature	Conversion Feature
		of	of
		Notes Payable	Notes Payable
Beginning balance, January 1		1,787,063	-
Reclassification to equity		-	1,079,942
Change in value of derivative liability		2,800,655	707,121
Excess derivative liability expense		(1,135,539)	-
Ending balance		$                              3,452,179	$                                     1,787,063

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(8) Equity

9 Months Ended

Sep. 30, 2018

Notes

(8) Equity

(8)             Equity

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, 10,000 shares of preferred A-2, 1,000,000 shares of preferred B and 1,000 shares of preferred C class.  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. 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.

During the nine months ended September 30, 2018, the Company issued an aggregate of 90,769,617 shares of common stock for compensation of $3,505,927 and 10,025,000 shares of common stock for outside services of $230,000. During the nine months ended September 30, 2017, the Company issued an aggregate of 292 shares of common stock for services resulting in an expense of $130,000. 

During the nine months ended September 30, 2018, the Company issued 292,052 shares of common stock for note and interest conversion of $192,588.  During the nine months ended September 30, 2017 the Company issued 4,346 shares of common stock for the conversion of $88,395 of outstanding notes payable and interest. 

There were no warrants exercised during the nine months ended September 30, 2018. During the nine months ended September 30, 2017, the Company issued 2,400 shares of common stock for the exercise of warrant.  

During the nine months ended September 30, 2018, the Company has issued 53,000 shares of common stock for cash of $53,000.  During the nine months ended September 30, 2017, the Company issued 2,324 shares of common stock for cash of $421,000. 

During the nine months ended September 30, 2017, the Company cancelled 2 shares of preferred stock series A-2 issued to Michael Barron and issued to him 4 shares of preferred stock series C. Each share of preferred stock series C is not convertible into common stock shares. Total aggregate issued shares of series C preferred stock, at any given time, have voting rights equal to four times the sum of the total number of shares of common stock and total number of shares of preferred stock series A, A-2 and B which are issued and outstanding at the time of voting.

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 warrants were granted for compensation.

The below table summarizes warrant activity during the nine months ended September 30, 2018:

	Number of Shares		Weighted- Average Exercise Price
Balances as of December 31, 2017		1,436	$	750.00
Granted		1,140	$	12.10
Exercised		-		-
Forfeited		-		-
Balances as of September 30, 2018		2,576	$	423.46

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 nine months ended September 30, 2018 and 2017:

	Nine Months Ended
	September 30,
	2018			2017
Exercise price	$	423.46			$750
Expected term	1.41 – 2.58 years				1.88-2.9 years
Expected average volatility		742.95	%		642.19	%
Expected dividend yield		-			-

The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2018:

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
2,576		1.63	$	423.46		2,576	$	423.46

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 September 30, 2018, for those warrants for which the quoted market price was in excess of the exercise price (“in-the-money” warrants). As of September 30, 2018, the aggregate intrinsic value of warrants outstanding was $0 based on the closing market price of $0.15 on September 30, 2018.

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 nine months ended September 30, 2018 were as follows:

Variables	Values
Stock price	$0.1500
Exercise Price	$697.29
Term	1.41-2.58 years
Risk Free Rate	0.25%
Volatility	806.8% - 618.2%

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(9) Related Party Transactions

9 Months Ended

Sep. 30, 2018

Notes

(9) Related Party Transactions

(9)          Related Party Transactions

During the nine months ended September 30, 2018, the Company repaid $4,200 of promissory note dated September 30, 2017 to Wanda Witoslawski (the Chief Financial Officer of the Company), leaving the balance outstanding of $3,200 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company borrowed $100 of promissory note dated December 15, 2015 from Wanda Witoslawski (the Chief Financial Officer of the Company), leaving the balance outstanding of $50,010 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company borrowed $37,942 of promissory note dated September 30, 2017 to Las Vegas Railway Express, Inc., leaving the balance outstanding of $192,940 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company added $5,344 to the promissory note dated September 30, 2017 to Allegheny Nevada Holdings Corporation (Michael A. Barron, the CEO and President of the Company, is a 100% owner and President of Allegheny Nevada Holdings Corporation), leaving the balance outstanding of $59,044 as of September 30, 2018.

During the nine months ended September 30, 2018, the Company repaid $4,250 of promissory note dated December 15, 2015 to Dianne David, leaving the balance outstanding of $69,794 as of September 30, 2018.

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(10) Subsequent Events

9 Months Ended

Sep. 30, 2018

Notes

(10) Subsequent Events

(10)          Subsequent Events

In October 2018, the Company issued 550,000,000 shares of common stock for compensation to management and 60,000,000 shares of common stock for outside services.

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(1) Organization and Description of Business: Going Concern (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Going Concern:

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 losses of $7,128,252 for the nine months ended September 30, 2018.  The Company also has an accumulated deficit of $22,479,785, and a negative working capital of $5,260,535 as of September 30, 2018, as well as outstanding convertible notes payable of $454,700, before debt discount of $80,542.  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.

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.

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(1) Organization and Description of Business: Use of Estimates (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Use of Estimates

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. Actual results could differ from those estimates.

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(1) Organization and Description of Business: Cash and Cash Equivalents, Policy (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Cash and Cash Equivalents, Policy

Cash and Cash 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 September 30, 2018 and December 31, 2017, the Company had $3,259 and $56,983 in cash and cash equivalents, respectively.

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(1) Organization and Description of Business: Property and Equipment (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Property and Equipment:

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 September 30, 2018, we recorded the rail cars on the balance sheet at $125,000, net of accumulated depreciation. The rail cars are currently not depreciated as they are not in service and not ready to run. The rail cars require substantial investment to retrofit.

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(1) Organization and Description of Business: Long-lived Assets (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Long-lived Assets:

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 nine months ended September 30, 2018, or 2017.  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 nine months ended September 30, 2018 and 2017.   

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(1) Organization and Description of Business: Income Taxes (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Income Taxes:

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 September 30, 2018, and December 31, 2017, the Company has not established a liability for uncertain tax positions.

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(1) Organization and Description of Business: Basic and Diluted Loss Per Share (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Basic and Diluted Loss Per Share:

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 nine months ended September 30, 2018, and 2017 as the amounts are anti-dilutive.  As of September 30, 2018, the Company had 2,996 outstanding warrants and convertible debt of $454,700, before debt discount of $80,542, which were all excluded from the computation as they were anti-dilutive and are convertible into 23,552,877 shares of common stock. As of December 31, 2017, the Company had 2,996 outstanding warrants and convertible debt of $369,900, before debt discount of $324,121, which were all excluded from the computation as they were anti-dilutive.

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(1) Organization and Description of Business: Revenue Recognition (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Revenue Recognition

Revenue Recognition

The Company recognizes revenue from the sale of products and services in accordance with ASC 606,”Revenue Recognition” following the five steps procedure:

Step 1: Identify the contract(s) with customers

Step 2: Identify the performance obligations in the contract

Step 3: Determine the transaction price

Step 4: Allocate the transaction price to performance obligations

Step 5: Recognize revenue when the entity satisfies a performance obligation

The Company recognizes revenue when it satisfies its obligation by transferring control of the good or service to the customer. A performance obligation is satisfied over time if one of the following criteria are met:

a.	the customer simultaneously receives and consumes the benefits as the entity performs;
b.	the entity’s performance creates or enhances an asset that the customer controls as the asset is created or enhanced; or
c.	the entity’s performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date.

Since the Company’s revenues are generated when products are sold with no remaining obligations on the part of the Company, revenue is recognized at the time of sale.

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(1) Organization and Description of Business: Fair Value of Financial Instruments (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Fair Value of Financial Instruments:

Fair Value of Financial 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 September 30, 2018, and December 31, 2017, measured at fair value on a recurring basis:

September 30, 2018	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	3,452,179	$	3,452,179
December 31, 2017	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	1,787,063	$	1,787,063

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(1) Organization and Description of Business: Share Based Payment (Policies)

9 Months Ended

Sep. 30, 2018

Policies

Share Based Payment:

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 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 nine months ended September 30, 2018 and 2017, the Company incurred $3,500,025 and $0 in stock-based compensation to employees and directors.

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 to value options and warrants issued during the nine months ended September 30, 2018 were as follows:

Variables	Values
Stock price	$0.1500
Exercise Price	$697.29
Term	1.41-2.58 years
Risk Free Rate	0.25%
Volatility	806.8% - 618.2%

During the nine months ended September 30, 2018 and 2017, the Company incurred $230,000 and $130,000 for common stock issued for outside services. 

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(1) Organization and Description of Business: New Accounting Pronouncements (Policies)

9 Months Ended

Sep. 30, 2018

Policies

New Accounting Pronouncements:

New Accounting Pronouncements:

None.

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(1) Organization and Description of Business: Fair Value of Financial Instruments: Fair Value Measurements, Recurring (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Fair Value Measurements, Recurring

September 30, 2018	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	3,452,179	$	3,452,179
December 31, 2017	Level 1		Level 2		Level 3		Total
Liabilities
Derivative Liabilities	$	-	$	-	$	1,787,063	$	1,787,063

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(1) Organization and Description of Business: Share Based Payment: Schedule of Assumptions Used (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Assumptions Used

Variables	Values
Stock price	$0.1500
Exercise Price	$697.29
Term	1.41-2.58 years
Risk Free Rate	0.25%
Volatility	806.8% - 618.2%

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(3) Property and Equipment: Property, Plant and Equipment (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Property, Plant and Equipment

		September 30,		December 31,
		2018		2017
Rail cars (not in service)	$	125,000	$	125,000
Less: accumulated depreciation		-		-
	$	125,000	$	125,000

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(4) Related Party Notes Payable: Schedule of Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Related Party Transactions

		September 30,		December 31,
		2018		2017
Promissory note,  dated  December 15, 2015, bearing interest
at 10% annually, payable on demand		$            50,010		$         49,910
Promissory note,  dated  December 15, 2015, bearing interest
at 10% annually, payable on demand		39,101		39,101
Promissory note,  dated  December 15, 2015, bearing interest
at 10% annually, payable on demand		69,794		74,044
Promissory note,  dated  September 30, 2015, bearing no interest,
payable on demand		192,940		154,998
Promissory note,  dated  September 30, 2017, bearing 10% interest,
payable on demand		59,044		53,700
Promissory note,  dated  September 30, 2017, bearing 10% interest,
payable on demand		3,200		7,400
	$	$        414,089	$	379,153

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(5) Convertible Notes Payable: Schedule of Convertible Notes Payable (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Convertible Notes Payable

		September 30,		December 31,
		2018		2017
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.		19,100		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		40,800
Promissory note,  dated  November 1, 2017, bearing interest
of 12% annually, payable on August 10, 2018, convertible to
common stock at a discount of 42% of the lowest
two traded prices of the common stock during the 15 trading
days  prior to the conversion date.		-		45,000
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		79,450		85,000
Promissory note,  dated  December 18, 2017, bearing interest
of 12% annually, payable within a year convertible at a conversion
rate equal to 50% of the lowest of: (i) the lowest trading price during
the twenty trading days prior to the conversion, or (ii) the lowest
trading price during the 20 trading days preceding the date of this note		7,150		40,000
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.		112,000		112,000
Promissory note,  dated  December 21, 2017, bearing interest
of 12% annually, payable on September 30, 2018, convertible to
common stock at a discount of 49% of the lowest
two traded prices of the common stock during the 30 trading
days  prior to the conversion date.		-		28,000
Promissory note,  dated  April 17, 2018, bearing interest
of 8% annually, payable on October 17, 2019, convertible to
common stock at $15		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.		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		-
Promissory note,  dated  May 14, 2018, bearing interest
of 12% annually, payable on November 14, 2018, convertible to
common stock at a discount of 55% of the average of 2 lowest
traded prices of the common stock during the 30 trading
days  prior to the conversion date.		50,000		-
Convertible notes before debt discount		454,700		369,900
Less debt discount		(80,542)		(324,121)
Total outstanding convertible notes payable	$	374,158	$	45,779

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(7) Derivative Instruments: Schedule of Derivative Instruments - Assumptions Used (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Derivative Instruments - Assumptions Used

	Nine Months Ended		Year Ended
	September 30, 2018		December 31, 2017
Expected term	0.1- 0.58 years			0.4 –0.96 years
Expected average volatility	987.1	%		313.6	%
Expected dividend yield	-			-
Risk-free interest rate	1.65 –2.97	%		1.28 –1.76	%

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(7) Derivative Instruments: Schedule of Derivative Liabilities at Fair Value (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Schedule of Derivative Liabilities at Fair Value

	Nine Months Ended September 30, 2018		Year Ended December 31, 2017
		Conversion Feature	Conversion Feature
		of	of
		Notes Payable	Notes Payable
Beginning balance, January 1		1,787,063	-
Reclassification to equity		-	1,079,942
Change in value of derivative liability		2,800,655	707,121
Excess derivative liability expense		(1,135,539)	-
Ending balance		$                              3,452,179	$                                     1,787,063

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(8) Equity: Share-based Compensation, Stock Options, Activity (Tables)

9 Months Ended

Sep. 30, 2018

Tables/Schedules

Share-based Compensation, Stock Options, Activity

The below table summarizes warrant activity during the nine months ended September 30, 2018:

	Number of Shares		Weighted- Average Exercise Price
Balances as of December 31, 2017		1,436	$	750.00
Granted		1,140	$	12.10
Exercised		-		-
Forfeited		-		-
Balances as of September 30, 2018		2,576	$	423.46

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 nine months ended September 30, 2018 and 2017:

	Nine Months Ended
	September 30,
	2018			2017
Exercise price	$	423.46			$750
Expected term	1.41 – 2.58 years				1.88-2.9 years
Expected average volatility		742.95	%		642.19	%
Expected dividend yield		-			-

The following table summarizes information relating to outstanding and exercisable warrants as of September 30, 2018:

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
2,576		1.63	$	423.46		2,576	$	423.46

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(8) Equity: Schedule of Assumptions Used (Tables)

9 Months Ended

Sep. 30, 2018

Schedule of Assumptions Used

Variables	Values
Stock price	$0.1500
Exercise Price	$697.29
Term	1.41-2.58 years
Risk Free Rate	0.25%
Volatility	806.8% - 618.2%

Warrants

Schedule of Assumptions Used

Variables	Values
Stock price	$0.1500
Exercise Price	$697.29
Term	1.41-2.58 years
Risk Free Rate	0.25%
Volatility	806.8% - 618.2%

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(1) Organization and Description of Business: Going Concern (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Details
Net Income (Loss)	$ 4,358,325	$ 1,072,447	$ 7,128,252	$ 2,608,267
Accumulated (deficit)	22,479,785		22,479,785		$ 15,351,533
Negative Working Capital	5,260,535		5,260,535
Convertible Debt, Gross	454,700		454,700		369,900
Debt Instrument, Unamortized Discount, Current	$ 80,542		$ 80,542		$ 324,121

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(1) Organization and Description of Business: Cash and Cash Equivalents, Policy (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Details
Cash	$ 3,259	$ 56,983

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(1) Organization and Description of Business: Property and Equipment (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Details
Property and equipment, net	$ 125,000	$ 125,000

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(1) Organization and Description of Business: Basic and Diluted Loss Per Share (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2018
Details
Class of Warrant or Right, Outstanding	2,996	2,996
Convertible Debt, Gross	$ 369,900	$ 454,700
Debt Instrument, Unamortized Discount, Current	$ 324,121	$ 80,542
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,996

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(1) Organization and Description of Business: Fair Value of Financial Instruments: Fair Value Measurements, Recurring (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Derivative Credit Risk Valuation Adjustment, Derivative Liabilities	$ 3,452,179	$ 1,787,063
Fair Value, Inputs, Level 3
Derivative Credit Risk Valuation Adjustment, Derivative Liabilities	$ 3,452,179	$ 1,787,063

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(1) Organization and Description of Business: Share Based Payment (Details) - USD ($)	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Common Stock Issued for Compensation	$ 3,500,025	$ 0
Stock Issued During Period, Value, Issued for Services	230,000	130,000
Warrants
Stock Issued During Period, Value, Issued for Services	$ 230,000	$ 130,000

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(1) Organization and Description of Business: Share Based Payment: Schedule of Assumptions Used (Details)	9 Months Ended
	Sep. 30, 2018 $ / shares
Share Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Stock Price	$ 0.1500
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price	$ 697.29
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.25%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	1 year 4 months 28 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	806.80%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	2 years 6 months 29 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	618.20%

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(3) Property and Equipment: Property, Plant and Equipment (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Property and equipment, net	$ 125,000	$ 125,000
Property, Plant and Equipment, Other, Accumulated Depreciation	0	0
Railroad Transportation Equipment
Property and equipment, net	$ 125,000	$ 125,000

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(4) Related Party Notes Payable: Schedule of Related Party Transactions (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Notes payable to related parties	$ 414,089	$ 379,153
Related Party Notes Payable 1
Notes payable to related parties	50,010	49,910
Related Party Notes Payable 2
Notes payable to related parties	39,101	39,101
Related Party Notes Payable 3
Notes payable to related parties	69,794	74,044
Related Party Notes Payable 4
Notes payable to related parties	192,940	154,998
Related Party Notes Payable 5
Notes payable to related parties	59,044	53,700
Related Party Notes Payable 6
Notes payable to related parties	$ 3,200	$ 7,400

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(5) Convertible Notes Payable: Schedule of Convertible Notes Payable (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Convertible Debt, Gross	$ 454,700	$ 369,900
Debt Instrument, Unamortized Discount, Current	(80,542)	(324,121)
Convertible Debt, Current	374,158	45,779
Convertible Notes Payable 1
Convertible Debt, Gross	19,100	19,100
Convertible Notes Payable 2
Convertible Debt, Gross	12,000	40,800
Convertible Notes Payable 3
Convertible Debt, Gross	0	45,000
Convertible Notes Payable 4
Convertible Debt, Gross	79,450	85,000
Convertible Notes Payable 5
Convertible Debt, Gross	7,150	40,000
Convertible Notes Payable 6
Convertible Debt, Gross	112,000	112,000
Convertible Notes Payable 7
Convertible Debt, Gross	0	28,000
Convertible Notes Payable 8
Convertible Debt, Gross	75,000
Convertible Notes Payable 9
Convertible Debt, Gross	50,000	0
Convertible Notes Payable 10
Convertible Debt, Gross	50,000	0
Convertible Notes Payable 11
Convertible Debt, Gross	$ 50,000	$ 0

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(7) Derivative Instruments: Schedule of Derivative Instruments - Assumptions Used (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.25%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	1 year 4 months 28 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	806.80%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	2 years 6 months 29 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	618.20%
Weighted-Average Assumptions
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	987.10%	313.60%
Weighted-Average Assumptions | Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	1 month 6 days	4 months 24 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.65%	1.28%
Weighted-Average Assumptions | Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	6 months 29 days	11 months 16 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	2.97%	1.76%

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(7) Derivative Instruments (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Details
Debt Instrument, Unamortized Discount	$ 80,542	$ 324,121

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(7) Derivative Instruments: Schedule of Derivative Liabilities at Fair Value (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Details
Derivative Liability	$ 3,452,179	$ 1,787,063
Reclassification to equity		1,079,942
Change in value of derivative liability	2,800,655	$ 707,121
Gain on Derivative Instruments, Pretax	$ (1,135,539)

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(8) Equity: Share-based Compensation, Stock Options, Activity (Details) - $ / shares	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Warrants - Outstanding	2,576		1,436
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 423.46		$ 750.00
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Granted	1,140
Share-Based Compensation Arrangement By Share-Based Payment Award, Options Granted, Weighted Average Exercise Price	$ 12.10
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term	1 year 7 months 17 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	2,576
Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	1 year 4 months 28 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	806.80%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	2 years 6 months 29 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	618.20%
Warrants
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 423.46	$ 750
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	742.95%	642.19%
Warrants | Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	1 year 4 months 28 days	1 year 10 months 17 days
Warrants | Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	2 years 6 months 29 days	2 years 10 months 24 days

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(8) Equity: Schedule of Assumptions Used (Details)	9 Months Ended
	Sep. 30, 2018 $ / shares
Share Based Compensation Arrangement By Share-Based Payment Award, Fair Value Assumptions, Stock Price	$ 0.1500
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price	$ 697.29
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	0.25%
Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	1 year 4 months 28 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	806.80%
Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Term	2 years 6 months 29 days
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Weighted Average Volatility Rate	618.20%

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(9) Related Party Transactions (Details) - USD ($)	Sep. 30, 2018	Dec. 31, 2017
Notes payable to related parties	$ 414,089	$ 379,153
Wanda Witoslawski
Notes payable to related parties	3,200
Las Vegas Railway Express
Notes payable to related parties	192,940
Allegheny Nevada Holdings
Notes payable to related parties	$ 59,044