10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(MARK ONE)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended March 31, 2014

Commission file number

000-54648

LAS VEGAS RAILWAY EXPRESS, INC.

(Exact name of Registrant as Specified in its Charter)

Delaware	56-2646797
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

6650 Via Austi Parkway, Suite 140

Las Vegas, NV  89119

(Address of principal executive offices)

702-583-6715

(Issuer’s telephone number)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, $0.0001 PAR VALUE

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [  ] No [ X ]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [  ] No [ X ]

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 [  ] No [X]

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 (§ 229.405 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  [  ]

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 [  ]           Accelerated filer [  ]           Non-accelerated filer [  ]     (Do not check if a smaller reporting company)          Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes [  ] No [X]

Aggregate market value of Common Stock held by non-affiliates based on the closing price of the registrant's Common Stock on the OTCBQ on September 30, 2013 was $7,158,755.

Number of outstanding shares of common stock as of June 25, 2014 was 24,075,113.

Documents Incorporated by Reference:  None.

LAS VEGAS RAILWAY EXPRESS, INC.

TABLE OF CONTENTS

PART I		PAGE
Item 1.	Business	3
Item 1A.	Risk Factors	7
Item 1B.	Unresolved Staff Comments	11
Item 2	Properties	11
Item 3.	Legal Proceedings	11
Item 4.	Mine Safety Disclosures	11
PART II		12
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	12
Item 6.	Selected Financial Data	13
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	20
Item 8.	Financial Statements and Supplementary Data	21
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	42
Item 9A.	Controls and Procedures	42
Item 9B.	Other Information	43
PART III		43
Item 10.	Directors, Executive Officers and Corporate Governance	43
Item 11.	Executive Compensation	47
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	50
Item 13.	Certain Relationships and Related Transactions and Director Independence.	51
Item 14.	Principal Accountant Fees and Services	52
PART IV		52
Item 15.	Exhibits and Financial Statement Schedules	52
SIGNATURES		54

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LAS VEGAS RAILWAY EXPRESS, INC.

PART I

Item 1.  Business

Las Vegas Railway Express, Inc. (the “Company”, “we”, “us”, or “our”), formerly known as Liberty Capital Asset Management, Inc., acquired 100% of the issued and outstanding stock of Las Vegas Railway Express, a Nevada corporation on January 21, 2010.  In connection with the acquisition, the Company changed its name to Las Vegas Railway Express, Inc. and changed its business plan to one of developing passenger rail transportation and ancillary ticketing and reservation services between the Los Angeles area and Las Vegas, Nevada. In November 2012, the Company executed an agreement with Union Pacific Railroad which allowed the Company to operate its passenger service on their property from Daggett, California to Las Vegas, a distance of 175.8 miles.  In May 2013, the Company and Amtrak, which was planning to haul the Company’s rail cars from Los Angeles to Las Vegas in regular service, was informed by BNSF Railway (“BNSF”) that it would not approve Amtrak’s request to operate on the BNSF system. Although the Company tried several alternative approaches to satisfy BNSF’s denial, none were accepted and both Amtrak and the Company were forced to suspend their efforts to establish the planned service over the Cajon Pass route.

During the development period for the Los Angeles to Las Vegas route, the Company became visible in the press and several independently owned passenger rail companies discussed how the Company’s Club X style railcars could be deployed on existing excursion lines. The Company began to focus its infrastructure towards acquiring independently owned passenger rail operations throughout the United States and providing upscale commuter Club X railcars for various state Department of Transportation municipal transportation agencies.

Company Overview

On April 23, 2014, the Company entered into an agreement with the Santa Fe Southern Railway, located in Santa Fe, New Mexico, to manage the passenger services. The Company will be adding its Club X cars to the train consists. Operations on the route are planned to commence in July 2014.  Subsequent routes will follow with a similar deployment format.

The Company owns outright a series of 16 Pullman bi-level passenger railcars, as well as two leased cars acquired through an agreement with Mid America Leasing Company. These cars are planned for use in the deployment of cars on our future affiliated routes. The first two cars have been completed and are scheduled to go into service on the Santa Fe Southern Railway in July 2014. The remaining cars are scheduled to be refurbished during the remainder of 2014.

The Company’s common stock is currently quoted on the OTCQB under the symbol “XTRN”.  The Company website is www.vegasxtrain.com, www.clubxtrain.com and www.xtrainvacations.com. The contents of this website are not incorporated into this Report.

The Company maintains offices at 6650 Via Austi Parkway, Suite 140, Las Vegas, Nevada 89119.

Our Competitive Strengths

We believe the following strengths will allow us to acquire prospective privately owned passenger rail operators throughout the US and consolidate them under one brand – X Train.

We are a licensed travel agency and can book tickets for numerous clients. As a licensed travel agency, we have access to numerous travel portfolios including virtually all passenger rail companies. By booking tickets on these rail lines, the Company believe it would become a known resource and proficient in rail travel bookings. If acquisitions are made, the travel agency call center operated by the Company can increase sales of tickets to our owned properties.

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Experienced Management and Board of Directors. We have an experienced management team and board of directors comprised of both experienced industry professionals and successful entrepreneurs. Our CEO, Michael Barron has experience establishing and growing several companies over the past 30 years.  Mr. McPherson serves on the Board of Directors of CSX Corporation and has served as President/CEO of the Illinois Central Railroad, a Class 1 railroad and served as President/CEO of the Florida East Coast Railway.  Gilbert Lamphere also serves on the board of CSX Corporation.

Access to capital. Our team has raised over $20 million for the operations of the Company to date and has developed excellent relationships with the capital markets in the US. We believe we can raise capital for companies we acquire to grow their business under our umbrella.  However, there are no assurances that we will be successful in our capital raising efforts.  Since we have no revenues, we are dependent on continued access to additional debt and equity financing.  Inability to raise additional financing will have a material adverse impact on our business and operations.

Train Equipment and Service

The Company leases two passenger rail cars which it has refurbished into its Club X Train motif. Each Club X Train car seats 48 passengers in a club room style motif reminiscent of a nightclub of the 1940’s and 1950’s. One of the cars has a full demonstration kitchen on board for entertainment style cooking for party events. These cars are available to be deployed by various companies which we acquire to add a specialty product currently unavailable to most independent companies currently in the business.

Club X Train style car

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Club X Train style interiors

   

Sales and Distribution

We intend to sell tickets for the X-Train through our website, www.xtrainvacations.com , www.clubxtrain.com and through our rail partners such as Santa Fe Southern Railway www.sfsr.com. Our call centers and our terminal ticket counters expect to additionally sell through third party distributors such as Expedia, Travelocity, Orbitz and other internet travel agencies. We also expect to be able to use certain of the distribution links provided by the various agencies where we deploy Club X train cars on municipal rail services.

Pricing and Revenue Management

Our fare structure for Club X Train commuter service is expected to be comprised of multiple "buckets," with seat prices generally increasing as the number of days prior to travel decreases. Prices in the highest pricing “bucket” can be up to 50% higher than the prices in the lowest “bucket.” All fares vary slightly depending upon the time of day purchased. All of our fares are expected to be one-way and non-refundable, although they may be changed for a fee.

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The number of seats offered at each fare “bucket” of Club X Train will be established through a continual process of forecasting, optimization and competitive analysis. Booking history and seasonal trends are expected to be used to forecast anticipated demand. These historical forecasts will be combined with current bookings, upcoming events, competitive pressures and other factors to establish a mix of fares designed to maximize revenue. This ability to accurately adjust prices based on fluctuating demand patterns is expected to allow us to maximize revenue from existing capacity.

Our pricing on Club X Train seats has been guided by a pricing study conducted by RL Banks. The results of the study after an examination of seven other comparable rail passenger excursion services are as follows:

Ancillary Revenues

In addition to the basic X-Train service offering, our business model also includes many premium options that will serve as sources of ancillary revenue. Each X-Train passenger car is expected to be served by a bartender who will prepare premium alcoholic beverages not included in the base ticket fare. Snacks and various X-Train merchandising are also expected to be offered for purchase through our free mobile application.

We also aim to capture significant revenue as a “one stop” booking agent for our passengers’ complete itinerary. In these activities, commissions are expected to be derived through our call centers, our website, and our on-board mobile application, where customers will be allowed the option to book ahead for various attractions and necessities such as hotels, tours, restaurant reservations, and rental cars at our acquired properties.

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Employees

We currently have 12 employees.  Initially, we anticipate hiring a team of approximately 2 employees per car deployed to assist in train and depot operations. Most of our train personnel will be classified as servers / entertainers and are expected not to be covered by any collective bargaining agreements. Our food and beverage personnel are expected to be provided on an outsourced basis to Masterpiece Cuisine.

Competition

Our primary competitor is Iowa Pacific Corp. of Chicago, Illinois. Iowa Pacific is a private company which operates freight short line businesses as well as six passenger excursions.

Item 1A.  Risk Factors

Risks Related to Our Business

We have a limited operating history upon which an evaluation of our prospects can be made.

Our future operations are contingent upon generating revenues and raising capital for operations.  Because we have a limited operating history, you will have difficulty evaluating our business and future prospects.

We also face the risk that we may not be able to effectively implement our business plan.  If we are not effective in addressing these risks, we may not operate profitably and we may not have adequate working capital to meet our obligations as they become due.

We currently have no revenues and are totally dependent upon the proceeds from investors to fund our business.

We will have to fund all of our operations and capital expenditures from the net proceeds from investors, and future financings, as we have not yet generated revenues. There can be no assurance that we would be able to raise the additional funding needed to implement our business plans or that unanticipated costs will not increase our projected expenses.

We have a history of losses and can provide no assurance of our future operating results.

            We have not generated revenue since inception, and may not succeed in generating revenue. We have experienced net losses and negative cash flows from operating activities since inception and we expect such losses and negative cash flows to continue in the foreseeable future. As of March 31, 2014 and March 31, 2013, we had cash of $87,910 and $1,262,615, respectively. For the years ended March 31, 2014 and 2013, we incurred net losses of $13,052,020 and $6,766,091, respectively. As of March 31, 2014, we had an aggregate accumulated deficit of $31,627,643.  We may never achieve profitability. The opinion of our independent registered public accountants on our audited financial statements as of and for the year ended March 31, 2014 contains an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.  Our ability to continue as a going concern is dependent upon raising capital from financing transactions and continued implementation of our business plan.

 Our business plan, in part, relies on our ability to acquire or partner with passenger rail companies.

We engage in attracting independently owned passenger rail operations to contract with us for either sales or operating rights contracts on their railroads.  Without these agreements, the Company would have no new operations from which it could operate its service.  The Company has no guarantee that it can secure these agreements in the future nor that the agreements it has can be maintained beyond their contract limits.

 We have incurred substantial indebtedness.

As of March 31, 2014 we have outstanding promissory notes of approximately $2,036,333.  In the past, we have been in default under this debt. There can be no assurances that we will raise sufficient capital or generate sufficient revenue in the future to service our debt. If legal proceedings were commenced against us or we are unable to service our debt, then creditors may foreclose on the debt and seize our assets which may force us to suspend or cease operations altogether.

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Our indebtedness, combined with our other financial obligations and contractual commitments, could:

	make it more difficult for us to satisfy its obligations with respect to the indebtedness and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in further event of defaults under the loan agreements and instruments governing the indebtedness;
	require us to dedicate a substantial portion of any cash raised from financing or cash flow from future operations to payments on our indebtedness, thereby reducing funds available for working capital, capital expenditures, acquisitions, and other corporate purposes;
	increase our vulnerability to adverse economic and industry conditions, which could place us at a competitive disadvantage compared to competitors that have relatively less indebtedness;
	limit our flexibility in planning for, or reacting to, changes in business and the industry in which we operate; and
	limit our ability to borrow additional funds, or to dispose of assets to raise funds, if needed, for working capital, capital expenditures, acquisitions, and other corporate purposes.

We may incur significant additional indebtedness in the future. If we incur a substantial amount of additional indebtedness, the related risks that we face could become more significant. Additionally, the terms of any future debt that we may incur may impose requirements or restrictions that further affect our financial and operating flexibility or subject it to other events of default.

If We Fail To Comply With The Numerous Laws And Regulations That Govern Our Industry, Our Business Could Be Adversely Affected.

Our business must comply with extensive and complex rules and regulations of various federal, state and local government authorities.  We may not always have been and may not always be in compliance with these requirements.  Failure to comply with these requirements may result in, among other things, revocation of our ability to operate a conventional rail system, class action lawsuits, administrative enforcement actions and civil and criminal liability.

The Loss Of Any Of Our Executive Officers Or Key Personnel Would Likely Have An Adverse Effect On Our Business.

Our future success depends to a significant extent on the continued services of our senior management and other key personnel, particularly Michael A. Barron.  The loss of the services of Mr. Barron or other key employees would also likely have an adverse effect on our business, results of operations and financial condition.

Our Business Will Be Adversely Affected If We Are Unable To Protect Our Intellectual Property Rights From Third Party Challenges Or If We Are Involved In Litigation.

Trademarks and other proprietary rights if any are important to our success and our competitive position.  Although we seek to protect our trademarks and other proprietary rights through a variety of means, we cannot assure you that the actions we have taken are adequate to protect these rights.  We may also license content from third parties in the future and it is possible that we could face infringement actions based upon the content licensed from these third parties.

8

Our common stock is quoted on the OTCQB, which may limit the liquidity and price of our common stock more than if our common stock were quoted or listed on The Nasdaq Stock Market or a National Exchange.

Our securities are currently quoted on the OTCQB, an inter-dealer automated quotation system for equity securities not included in the Nasdaq Stock Market.  Quotation of our securities on the OTCQB may limit the liquidity and price of our securities more than if our securities were quoted or listed on The Nasdaq Stock Market or a national exchange.  Some investors may perceive our securities to be less attractive because they are traded in the over-the-counter market.  In addition, as an OTCQB listed company, we do not attract the extensive analyst coverage that accompanies companies listed on other exchanges.  Further, institutional and other investors may have investment guidelines that restrict or prohibit investing in securities traded on the OTCQB.  These factors may have an adverse impact on the trading and price of our common stock.

Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a 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 $13,052,020 and $6,766,091 for the years ended March 31, 2014 and 2013, respectively.  The Company also has an accumulated deficit of $31,627,643 and a negative working capital of $2,736,886 as of March 31, 2014, as well as outstanding convertible notes payable of $2,023,000, of which $1,750,000 is due on June 30, 2014.  Management believes that it will need additional equity or debt financing to be able to implement the 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.

Risks Related to Our Common Stock

The application of the “Penny Stock” Rules could adversely affect the market price of our common stock and increase your transaction cost to sell those shares. .

The SEC has adopted rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.  For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:

 that a broker or dealer approve a person’s account for transactions in penny stocks; and

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

	obtain financial information and investment experience objectives of the person; and
	make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form:

	sets forth the basis on which the broker or dealer made the suitability determination; and
	that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

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Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules.  This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

 the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

We do not anticipate paying dividends.

We have never paid any cash dividends on our common stock since our inception, and we do not anticipate paying cash dividends in the foreseeable future.  Any dividends, which we may pay in the future, will be at the discretion of our Board of Directors and will depend on our future earnings, any applicable regulatory considerations, our financial requirements and other similarly unpredictable factors.  For the foreseeable future, we anticipate that earnings, if any, will be retained for the operation and expansion of our business.

Possible conflicts of interest exist in related party transactions.

Our Board of Directors consists of Michael A. Barron, Gilbert H. Lamphere, John D. McPherson, John O’Connor and George Rebensdorf. These individuals are either executive officers, directors or principal shareholders of the Company.  Thus, there has in the past existed the potential for conflicts of interest in transactions between the Company and such individuals or entities in which such individuals have an interest.

There is a limited market for our common stock which may make it more difficult for stockholders to dispose of their shares.

            Our common stock is currently quoted on the OTCQB under the symbol "XTRN".  There is a limited trading market for our common stock.  Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able to sell our common stock.

The price of our common stock is volatile, which may cause investment losses for our stockholders.

            The market for our common stock is highly volatile, having ranged in the last twelve months from a low of $0.15 to a high of $1.68 on the OTCQB. The trading price of our common stock on the OTCQB is subject to wide fluctuations in response to, among other things, quarterly variations in operating and financial results, and general economic and market conditions. In addition, statements or changes in opinions, ratings, or earnings estimates made by brokerage firms or industry analysts relating to our market or relating to us could result in an immediate and adverse effect on the market price of our common stock. The highly volatile nature of our stock price may cause investment losses for our shareholders. In the past, securities class action litigation has often been brought against companies following periods of volatility in the market price of their securities. If securities class action litigation is brought against us, such litigation could result in substantial costs while diverting management’s attention and resources.

Our common stock could be further diluted as the result of the issuance of additional shares of common stock, convertible securities, warrants or options.

            In the past, we have issued common stock, convertible securities (such as convertible debentures and notes) and warrants in order to raise money. We have also issued options and warrants as compensation for services and incentive compensation for our employees and directors. We have shares of common stock reserved for issuance upon the exercise of certain of these securities and may increase the shares reserved for these purposes in the future. Our issuance of additional common stock, convertible securities, options and warrants could affect the rights of our stockholders, result in a reduction in the overall percentage holdings of our stockholders, could put downward pressure on the market price of our common stock, could result in adjustments to exercise prices of outstanding warrants, and could obligate us to issue additional shares of common stock to certain of our stockholders.

10

Shares eligible for future sale may adversely affect the market.

            From time to time, certain of our stockholders may be eligible to sell all or some of their shares of common stock by means of ordinary brokerage transactions in the open market pursuant to Rule 144 promulgated under the Securities Act, subject to certain limitations. In general, pursuant to amended Rule 144, non-affiliate stockholders may sell freely after six months subject only to the current public information requirement. Affiliates may sell after six months subject to the Rule 144 volume, manner of sale (for equity securities), and current public information and notice requirements. Any substantial sales of our common stock pursuant to Rule 144 may have a material adverse effect on the market price of our common stock.

A large percentage of our stock is owned by relatively few people, including officers and directors.

As of March 31, 2014, our officers and directors beneficially owned approximately 20.17% of our outstanding common stock.  As a result,  these stockholders could, if they were to act together, affect the outcome of stockholder votes, which could, among other things, affect elections of directors, delay or prevent a change in control or other transaction that might be beneficial other stockholders.

Item 1B.  Unresolved Staff Comments

Not applicable

Item 2.  Properties.

As of March 31, 2014, we lease approximately 7,079 square feet of general office space in premises located at 6650 Via Austi Parkway, Suite 170 and 140, Las Vegas, Nevada. Our lease for this space expires in April 2016 and provides for monthly payments of $15,790.

Item 3.  Legal Proceedings.

In the ordinary course of business, the Company may be or has been involved in legal proceedings from time to time. As of the date of this annual report on Form 10-K, there have been no material changes to any legal proceedings relating to the Company which previously were not reported.

Item 4.  Mine Safety Disclosure

Not applicable.

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PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is currently quoted on the Over-The-Counter Bulletin Board under the symbol “XTRN”.  On June 25, 2014, the last trade of our stock was at the price of $0.12 per share.  The following table sets forth the high and low prices per share of our common stock for each period indicated.  These quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	Common Shares
Year Ended March 31, 2014:	High		Low
Quarter Ended June 30, 2013	$	2.20	$	1.40
Quarter Ended September 30, 2013	$	1.60	$	0.80
Quarter Ended December 31, 2013	$	1.50	$	0.73
Quarter Ended March 31, 2014	$	1.35	$	0.47
Year Ended March 31, 2013:	High		Low
Quarter Ended June 30, 2012	$	1.80	$	1.40
Quarter Ended September 30, 2012	$	4.00	$	1.40
Quarter Ended December 31, 2012	$	3.80	$	1.40
Quarter Ended March 31, 2013	$	2.60	$	1.80

Number of Stockholders

As of March 31, 2014, there were 345 stockholders of record of our common stock.  

Dividend Policy

We have never declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.

Equity Compensation Plan Information as of March 31, 2014

Equity Compensation Plan Information
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)	Weighted-average  exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans  (excluding securities  reflected in column (a)) (c)
Equity compensation plans approved by security holders	100,000	$	10		900,000
Equity compensation plans not approved by security holders	1,569,842	$	5.04		-
Total	1,669,842	$	5.04		900,000

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Recent Sales of Unregistered Securities.

None.

Purchases of Equity Securities by the Issuer and Affiliated Purchaser

None.

Item 6.  Selected Financial Data

Not applicable.

Forward-Looking Statements

Statements contained in this Form 10-K that are not historical facts are forward-looking statements.  In addition, words such as “believes,” “anticipates,” “expects,” “intends” and similar expressions are intended to identify forward-looking statements.  Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements or events, or timing of events, to differ materially from any future results, performance or achievements or events, or timing of events, expressed or implied by such forward-looking statements.  We cannot assure that we will be able to anticipate or respond timely to the changes that could adversely affect our operating results in one or more fiscal quarters.  Results of operations in any past period should not be considered indicative of results to be expected in future periods.  Fluctuations in operating results may result in fluctuations in the price of our securities.

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our financial statements and notes thereto included elsewhere herein.

Overview

Las Vegas Railway Express, Inc. (the “Company”, “we”, “us”, or “our”), formerly known as Liberty Capital Asset Management, Inc., acquired 100% of the issued and outstanding stock of Las Vegas Railway Express, a Nevada corporation on January 21, 2010.  In connection with the acquisition, the Company changed its name to Las Vegas Railway Express, Inc. and changed its business plan to one of developing passenger rail transportation and ancillary ticketing and reservation services between the Los Angeles area and Las Vegas, Nevada. In November 2012, the Company executed an agreement with Union Pacific Railroad which allowed the Company to operate its passenger service on their property from Daggett, California to Las Vegas, a distance of 175.8 miles.  In May 2013, the Company and Amtrak, which was planning to haul the Company’s rail cars from Los Angeles to Las Vegas in regular service, was informed by BNSF Railway (“BNSF”) that it would not approve Amtrak’s request to operate on the BNSF system. Although the Company tried several alternative approaches to satisfy BNSF’s denial, none were accepted and both Amtrak and the Company were forced to suspend their efforts to establish the planned service over the Cajon Pass route.

Our assessment is that when we started, BNSF had 3,000 locomotives in mothballs and 2,000 crews furloughed. Traffic through Cajon Pass was at 86 trains per day with a total capacity of 160 trains per day. In short, they had capacity.  Today, all locomotives are back in service and BNSF is leasing 1,000 more. Oil is being hauled over this corridor and capacity is at a premium with 120+ trains per day over the pass. With pending capacity issues, BNSF is reserving its rail franchise for freight and has closed off any access via the Cajon pass.

During the development period for the Los Angeles to Las Vegas route, the company became visible in the press and several independently owned passenger rail companies discussed how the Club X style could be deployed on existing excursion lines. The Company began to focus its infrastructure towards acquiring independently owned passenger rail operations throughout the United States and providing upscale commuter Club X railcars for various state Department of Transportation municipal transportation agencies.

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On April 23, 2014, the Company entered into an agreement with the Santa Fe Southern Railway, located in Santa Fe New Mexico, to manage the passenger services on the railroad. The Company will be adding its Club X cars to the train consists. Operations on the route are planned to commence in July 2014.  Subsequent routes will follow with a similar deployment format.

The Company owns outright a series of 16 bi-level passenger railcars as well as two leased cars acquired through an agreement with Mid America Leasing Company. These cars are planned for use in the deployment of cars on our future affiliated routes and acquired companies. The first two cars have been completed and are scheduled to go into service on the Santa Fe Southern Railway in July of 2014. The remaining cars are scheduled to be refurbished during the remainder of 2014.

Critical Accounting Policies

The preparation of our 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 collection of receivables, impairment of goodwill, 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 material differences from the estimated amounts in the financial statements. There have been no material changes to these policies during the fiscal year.

Intangible Assets:

Goodwill represents the excess of purchase price over tangible and intangible assets acquired, less liabilities assumed arising from the acquisition of Las Vegas Railway Express on January 21, 2010.  Goodwill is not amortized, but is reviewed for potential impairment on an annual basis at the reporting unit level.  As required by the “Intangibles – Goodwill and Other” topic of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), the Company conducted an analysis of the goodwill on March 31, 2014.

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.

Deposit with Union Pacific:

On November 8, 2012, the Company entered into an agreement with Union Pacific Railroad Company whereby the Company was granted a nonexclusive operating right to use Union Pacific railroad track between Daggett, California and Las Vegas, Nevada, subject to certain terms and conditions.  In connection with this agreement, the Company made an earnest money deposit of $600,000 and was required to meet certain financial conditions, including the provision of a letter of credit in favor of Union Pacific in the amount of $27,444,145 on or before October 31, 2013.   The Company elected to terminate this agreement on October 31, 2013 as it no longer planned to operate on the Union Pacific Railroad Company as a regularly scheduled passenger train.  As a result, the Company determined the $600,000 deposit was impaired and expensed the amount during the year ended March 31, 2014 as a component of selling, general and administrative expenses.

Income Taxes:

The Company accounts for income taxes under FASB ASC 740 "Income Taxes."  Under the asset and liability method of FASB ASC 740, 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.

14

The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of March 31, 2014 and 2013, the Company has not established a liability for uncertain tax positions.

Share Based Payment:

The Company issues stock, options and warrants as share-based compensation to employees and non-employees.

The Company accounts for its share-based compensation to employees 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. 

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 stock options and warrants that do not qualify as derivative instruments using the Black-Scholes option pricing model.  There were no options issued during the years ended March 31, 2014 or 2013.  There were no warrants valued using the Black-Scholes model during the year ended March 31, 2014.  

Certain warrants qualify as derivative instruments and are valued using the binomial lattice method. See discussion below regarding accounting for derivative liabilities.

Derivative Liabilities:

In connection with the private placement of Convertible Notes beginning in February 2013, the Company became contingently obligated to issue shares of common stock in excess of the 200 million authorized under the Company’s certificate of incorporation.  Consequently, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability.

15

The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares.

Using this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued on and subsequent to November 30, 2012 had been accounted for as derivative liabilities.

On December 2, 2013, the Company effected a one-for-twenty reverse stock split of the Company’s issued and outstanding common stock shares.  As a result, the Company’s outstanding shares of common stock and common stock equivalents no longer exceeded the number of authorized shares.  As a result, as of December 2, 2013, these instruments that were accounted for as derivative liabilities were reclassified as equity.

The Company also has certain warrants and notes payable with elements that qualify as derivatives. The warrants have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and four outstanding notes payable that had a variable conversion feature that similarly prevented the calculation of the number of shares into which they were convertible.

The Company values these warrants and notes payable using the binomial lattice method.  The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations (see Note 7).

Fair Value of Financial Instruments:

The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, notes payable and derivative liabilities.  Derivative liabilities are recorded at fair value.  The principal balance of notes payable approximates fair value because current interest rates and terms offered to the Company for similar debt are substantially the same.

FASB ASC 820 defines fair value, establishes a framework for measuring fair value, in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

16

Results of Operations

The following are the results of our continuing operations for the year ended March 31, 2014 compared to the year ended March 31, 2013:

	Year Ended
	March 31,			March 31,
	2014			2013			$ Change			% Change
Operating Expenses:
Compensation and payroll taxes	$	2,876,141		$	3,034,474		$	(158,333	)		-5.2	%
Selling, general and administrative		1,709,461			651,503			1,057,958			162.4	%
Professional fees		1,873,146			1,616,524			256,622			15.9	%
Impairment loss		843,697			-			843,697			100.0	%
Depreciation expense		7,292			1,976			5,316			269.0	%
Total expenses		7,309,737			5,304,477			2,005,260			37.8	%
Loss from continuing operations		(7,309,737	)		(5,304,477	)		(2,005,260	)		37.8	%
Other income (expense)
Interest expense		(7,960,987	)		(2,198,205	)		(5,762,782	)		262.2	%
Change in derivative liability		2,162,790			270,466			1,892,324			699.7	%
Total other income (expense)		(5,798,197	)		(1,927,739	)		(3,870,458	)		200.8	%
Net loss from continuing operations before provision for income taxes		(13,107,934	)		(7,232,216	)		(5,875,718	)		81.2	%
Benefit from (provision for) income taxes		55,914			(13,571	)		69,485			-512.0	%
Net loss from continuing operations		(13,052,020	)		(7,245,787	)		(5,806,233	)		80.1	%
Discontinued operations:
Income from discontinued operations, net of income taxes		-			479,696			(479,696	)		-100.0	%
Net loss	$	(13,052,020	)	$	(6,766,091	)	$	(6,285,929	)		92.9	%

Revenue

During the years ended March 31, 2014 and 2013, our operations have yet to generate any revenue.

Operating Expenses

Compensation and payroll taxes decreased by $158,333, or 5.2%, during the year ended March 31, 2014 as compared to 2013.  The decrease in compensation expense in the current year is due primarily to higher costs in 2013 related to the issuance of warrants to directors and officers as compensation in November 2012, which resulted in additional expenses of approximately $1.2 million.  During the year ended March 31, 2014, the decrease in costs were offset by the hiring of additional full-time employees, addition of board members and issuing stock grants and warrants for compensation.  Selling, general and administrative expenses increased by $1,057,958, or 162.4%, during the year ended March 31, 2014 as compared to the same period in 2013 primarily due to the impairment of our deposit with Union Pacific of $600,000 resulting from the termination of our agreement with them in October 2013, as well as increases in director and officers’ insurance and travel expenses related to raising capital.  We had an increase in our professional fee expenses during the year ended March 31, 2014 of $256,622, or 15.9%, due primarily to legal, consulting and accounting services and $360,726 related to the amortization of expenses from warrants issued to consultants.  We had an impairment loss of $843,697 during the year ended March 31, 2014 resulting from the impairment of our goodwill.

Other (Expense) Income

Interest expense increased by $5,762,782 during the year ended March 31, 2014 as compared to the year ended March 31, 2013.  The increase is due primarily to the issuance of additional convertible notes payable in the current year as compared to 2013.  The conversion feature associated with the convertible notes and the value of warrants issued in connection with the convertible notes have been accounted for as discounts to the convertible notes payable.  The discount is being amortized into interest expense over the maturity date of the convertible notes.  This resulted in interest expense during the year ended March 31, 2014 of $4,835,032, compared to $2,165,385 in 2013, representing an increase of $2,669,647.  In addition, we had capitalized debt issuance costs related to these convertible notes payable, which are being amortized over the maturity date of the notes of February 1, 2014, which resulted in additional interest expense during the year ended March 31, 2014 of $637,680, compared to $15,472 during the year March 31, 2013.  During the year ended March 31, 2014, we also had debt conversion expense of $2,217,878 resulting from the induced conversion of convertible debt during February 2014 at a reduced conversion rate, which has been reflected as interest expense.  There was no such amount during the year ended March 31, 2013.

17

The change in the value of derivative liabilities amounted to $2,162,790 for the year ended March 31, 2014 as compared to $270,466 for the year ended March 31, 2013.  The increase was primarily due to the decrease in value of derivative liabilities outstanding during the year.

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 no 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 $13,052,020 and $6,766,091 for the years ended March 31, 2014 and 2013, respectively.  The Company also has an accumulated deficit of $31,627,643 and negative working capital of $2,736,886 as of March 31, 2014, as well as outstanding convertible notes payable of $2,023,000, of which $1,750,000 is due on June 30, 2014.  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.

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 pay unfunded operating expenses and fund long-term business operations; and

· manage or control working capital requirements by controlling operating expenses.

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.

Cash Flows

Net cash used in operating activities for the years ended March 31, 2014 and 2013 were $4,054,795 and $2,783,090, respectively.  Cash used in operating activities for the years ended March 31, 2014 and 2013 were primarily due to net losses of $13,052,020 and $6,766,091, respectively.  During the year ended March 31, 2014, the net loss included significant non-cash expenses of $644,540 in stock issued for services, $4,835,032 in amortization of discounts on notes payable, $637,680 in amortization of debt offering costs, $600,000 for the impairment of our deposit with Union Pacific, $843,697 for the impairment loss associated with our goodwill, and $2,217,878 in debt conversion expenses.  During the year ended March 31, 2013, the net loss included significant non-cash expenses of $1,538,677 for stock issued for services, $1,201,370 in warrants issued for services, $2,096,482 in amortization of discounts on notes payable, and $80,524 for stock option compensation.

Net cash used in investing activities during the year ended March 31, 2014 amounted to $297,910, which represented property and equipment acquisitions primarily related to the acquisition of rail cars and related costs.  Net cash used in investing activities during the year ended March 31, 2013 was $980,122, which included $600,000 in spending for a deposit made with Union Pacific pursuant to an operating agreement signed, as well as $380,122 in property and equipment acquisitions, primarily due to the acquisition of rail cars and other capitalized costs towards the railroad project. 

18

Net cash provided by financing activities for the year ended March 31, 2014 amounted to $3,178,000 which consisted of $275,000 in proceeds from the sale of common stock and $2,903,000 in proceeds from the issuance of convertible notes payable during the year.  Net cash provided by financing activities for the year ended March 31, 2013 was $4,972,195 which consisted of $2,282,000 in proceeds from the sale of common stock, $1,900,000 in proceeds from convertible notes payable, $820,000 in proceeds from short-term notes payable, and $9,000 in proceeds from the exercise of warrants.  These proceeds were offset by the repayment of notes payable of $38,805.  

Description of Indebtedness

For a complete description of our outstanding debt as of March 31, 2014 ad 2013, see Notes 4 and 5 to the financial statements.

As of March 31, 2014, we had an aggregate total of $2,023,000 of outstanding convertible notes payable, of which $1,873,000 is due during the fiscal year ended March 31, 2015 and $150,000 is due during the fiscal year ended March 31, 2016.  As of March 31, 2013, we had an aggregate total of $1,795,000 of outstanding convertible notes payable, which were all converted into common stock during the year ended March 31, 2014.  As of March 31, 2014 and 2013, we also had a secured promissory note payable of $13,333 outstanding, which is due during the year ended March 31, 2015.

Subsequent to the year ended March 31, 2014, we have entered into the additional debt transactions.

On April 2, 2014, the Company entered issued a convertible promissory note for $100,000 with a maturity date of October 2, 2014.  The note is convertible into shares of the Company’s common stock at a discount of 42% of the lowest traded price during the 5 trading days preceding the conversion date.

On April 11, 2014, the Company entered into a Note Exchange Agreement with the debt holder holding the $1,750,000 senior secured convertible promissory note originally issued on November 22, 2013 under the Purchase Agreement (see Note 5).  Under the terms of the Note Exchange Agreement, the original senior secured convertible promissory note is cancelled and replaced with a new note for $2,000,000.  The new note matures on November 30, 2014, bears interest at the rate of 10% per year payable on maturity in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock at a conversion price equal to $0.45, subject to adjustments in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the conversion price then in effect.  Under the new note, the Company’s obligations are secured by substantially all of the Company’s assets, excluding any railcar assets.

On April 17, 2014, the Company issued a convertible note payable providing for borrowings up to $250,000 with a maturity date of April 17, 2016.  The note has a one-time interest charge of 12% and is due on the maturity date. The outstanding balance of the note along with accrued interest is convertible into shares of the Company’s common stock at a rate equal to the lesser of $0.25 or 60% of the lowest trade occurring during the 25 trading days preceding the conversion date.  The Company received borrowings under this convertible note payable of $50,000 in April 2014.

On April 30, 2014, the Company entered into a convertible note payable providing for total borrowings of $250,000, which is payable in 3 installments of $83,333, one upon execution of the note, one due one month after execution, and one due two months after execution.  Interest on the note equals 10% of the total principal balance, regardless of how long the note is outstanding for.  The Company received payments of $83,333 on May 5, 2014 and on May 30, 2014.  The convertible note matures 6 months after the issuance, at which point the outstanding principal and interest is due.

On May 6, 2014, the Company entered into a convertible note payable providing for total borrowings of $32,500 which accrue interest at a rate of 8% per annum.  The convertible note matures and is due in full on February 12, 2015 along with any unpaid accrued interest.  The outstanding principal and accrued interest is convertible into shares of common stock at the option of the holder at a conversion rate equal to 61% of the average of the lowest 3 trading prices during the 10 trading days prior to the conversion.

19

On May 12, 2014, the Company entered into a secured convertible promissory note providing for total borrowings up to $335,000 which accrue interest at a rate of 10% per annum.  All outstanding borrowings mature and are due in 20 months from the issuance date.  The Company received an initial payment of $87,500 on the note issuance date.  The outstanding principal and interest is convertible into shares of common stock at the option of the holder at a conversion rate equal to the lesser of $0.35 per share or 60% of the average of the 3 lowest closing bid prices in the 20 trading days preceding the conversion date.  If the average of the 3 lowest closing bid prices is less than $0.10, then the conversion factor is reduced from 60% to 55%.  The debt holder was also issued warrants on May 12, 2014 in connection with this note payable granting the right to purchase a number of common stock shares equal to $167,500 divided by the market price (defined as the higher of the closing price on the issuance date or the volume weighted average price of the stock for the trading day that is 2 days prior to the exercise date) at an exercise price of $0.35 per share.

On May 28, 2014, the Company issued into a convertible promissory note providing for borrowings of $125,000.  The convertible promissory note matures on August 28, 2014, at which point the Company owes $187,500 which includes a total of $62,500 in interest expense.  The outstanding amounts are convertible into shares of common stock at the option of the holder at a conversion rate equal to 60% of the lowest traded price during the prior 20 trading days from the date of the conversion.

On June 13, 2014, the Company issued convertible debentures providing for total borrowing of $55,000 which accrued interest at the rate of 12% per annum. All borrowings mature and are due in one year from the issuance date. The debenture is convertible into shares of common stock at the option of the holder at the conversion rate lesser of 55% discount of the lowest closing bid price during the 25 trading days prior to the date of notice conversion or $0.25 per share.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable

20

Item 8.  Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

Las Vegas Railway Express, Inc.

Las Vegas, Nevada

We have audited the accompanying balance sheets of Las Vegas Railway Express, Inc. ("Company") as of March 31, 2014, and 2013, and the related statements of operations, stockholders’ deficit, and cash flows for each of the two years in the period ended March 31, 2014.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Las Vegas Railway Express, Inc. at March 31, 2014, and 2013, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2014, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that Las Vegas Railway Express, Inc. will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has suffered recurring losses from operations, has a net capital deficiency, has no revenues and has negative working capital.  These factors among others raise substantial doubt about its ability to continue as a going concern.  Management’s plans regarding these matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ BDO USA LLP

Los Angeles, CA

June 30, 2014

21

LAS VEGAS RAILWAY EXPRESS, INC.

BALANCE SHEETS

	March 31,			March 31,
	2014			2013
Assets
Current assets
Cash	$	87,910		$	1,262,615
Other current assets		101,250			471,772
Total current assets		189,160			1,734,387
Property and equipment, net of accumulated depreciation		684,407			393,789
Other assets
Deposit with Union Pacific		-			600,000
Other assets		22,385			25,958
Goodwill		-			843,697
Total other assets		22,385			1,469,655
Total assets	$	895,952		$	3,597,831
Liabilities and Stockholders' Deficit
Current liabilities
Short term notes payable	$	13,333		$	13,333
Accounts payable and accrued expenses		442,711			375,295
Derivative liability		1,198,018			3,181,537
Current portion of convertible notes payable, net of discount		1,271,984			116,042
Liabilities of discontinued operations		-			194,041
Total current liabilities		2,926,046			3,880,248
Deferred tax liability		-			55,914
Long-term portion of convertible debt, net of current portion		150,000			-
Total liabilities		3,076,046			3,936,162
Commitments and contingencies
Stockholders' deficit
Common stock, $0.0001 par value, 200,000,000 shares authorized, 16,041,143 and 7,705,595 shares issued and outstanding as of March 31, 2014 and 2013, respectively		1,604			770
Additional paid-in capital		29,445,945			18,236,522
Accumulated deficit		(31,627,643	)		(18,575,623	)
Total stockholders' deficit		(2,180,094	)		(338,331	)
Total liabilities and stockholders' deficit	$	895,952		$	3,597,831

See accompanying notes to financial statements

22

LAS VEGAS RAILWAY EXPRESS, INC.

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED MARCH 31, 2014 AND 2013

	March 31,			March 31,
	2014			2013
Operating Expenses:
Compensation and payroll taxes	$	2,876,141		$	3,034,474
Selling, general and administrative		1,709,461			651,503
Professional fees		1,873,146			1,616,524
Impairment loss		843,697			-
Depreciation expense		7,292			1,976
Total expenses		7,309,737			5,304,477
Loss from operations		(7,309,737	)		(5,304,477	)
Other income (expense)
Interest expense		(7,960,987	)		(2,198,205	)
Change in derivative liability		2,162,790			270,466
Total other income (expense)		(5,798,197	)		(1,927,739	)
Net loss from continuing operations before provision for income taxes		(13,107,934	)		(7,232,216	)
Benefit from (provision for) income taxes		55,914			(13,571	)
Net loss from continuing operations		(13,052,020	)		(7,245,787	)
Discontinued operations:
Income from discontinued operations, net of income taxes		-			479,696
Net loss	$	(13,052,020	)	$	(6,766,091	)
Net loss per share, continuing operations, basic and diluted	$	(1.40	)	$	(1.36	)
Net income per share, discontinued operations, basic and diluted	$	-		$	0.09
Net loss per share, basic and diluted	$	(1.40	)	$	(1.27	)
Weighted average number of common shares outstanding, basic and diluted		9,325,550			5,312,802

See accompanying notes to financial statements

23

LAS VEGAS RAILWAY EXPRESS, INC.

STATEMENT OF STOCKHOLDERS’ DEFICIT

								Additional
	Common Stock							Paid-in			Accumulated
	Shares		Amount		Subscriptions			Capital			Deficit			Total
Balance, March 31, 2012		2,432,677	$	243	$	640,000		$	9,976,609		$	(11,809,532	)	$	(1,192,680	)
Stock issued from subscriptions payable		800,000		80		(640,000	)		639,920			-			-
Stock issued for servives		463,868		46		-			1,538,631			-			1,538,677
Stock issued for cash		2,282,000		228		-			2,281,772			-			2,282,000
Stock issued for conversion of debt		1,682,050		168		-			2,055,938			-			2,056,106
Exercise of warrants		45,000		5		-			8,995			-			9,000
Discount on convertible notes payable		-		-		-			440,000			-			440,000
Warrants issued for services		-		-		-			1,201,370			-			1,201,370
Warrants issued for property and equipment		-		-		-			12,763			-			12,763
Stock option compensation		-		-		-			80,524			-			80,524
Net loss		-		-		-			-			(6,766,091	)		(6,766,091	)
Balance, March 31, 2013		7,705,595	$	770	$	-		$	18,236,522		$	(18,575,623	)	$	(338,331	)
Stock issued for cash		600,000		60		-			274,940			-			275,000
Stock issued for conversion of debt		4,410,747		441		-			5,062,828			-			5,063,269
Stock issued for services		728,143		73		-			644,467			-			644,540
Exercise of warrants		9,823		1		-			(1	)		-			-
Stock issued in exchange of warrants		2,586,835		259		-			594,783			-			595,042
Warrants issued for services		-		-		-			329,416			-			329,416
Reclassification of derivative liabilities		-		-		-			4,302,990			-			4,302,990
Net loss		-		-		-						(13,052,020	)		(13,052,020	)
Balance, March 31, 2014		16,041,143	$	1,604	$	-		$	29,445,945		$	(31,627,643	)	$	(2,180,094	)

See accompanying notes to financial statements

24

LAS VEGAS RAILWAY EXPRESS, INC.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED MARCH 31, 2014 AND 2013

	March 31,			March 31,
	2014			2013
Cash flows from operating activities
Net loss	$	(13,052,020	)	$	(6,766,091	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		7,292			1,976
Amortization of discounts on note payable		4,835,032			2,096,482
Amortization of debt offering costs		637,680			15,472
Impairment of Union Pacific deposit		600,000			-
Deferred tax provision		(55,914	)		13,571
Change in value of derivative liability		(2,162,790	)		(270,466	)
Stock issued and subscribed for services		644,540			1,538,677
Stock option compensation		-			80,524
Impairment loss on goodwill		843,697			-
Debt conversion expense		2,217,878			-
Stock issued for exchange of warrants		595,042			-
Warrants issued for services		582,837			1,201,370
Changes in operating assets and liabilities:
Other current assets		204,593			(440,216	)
Other assets		3,573			(25,958	)
Liabilities of discontinued operations, net		(194,041	)		(510,631	)
Accounts payable and accrued expenses		237,806			282,200
Net cash used in operating activities		(4,054,795	)		(2,783,090	)
Cash flows from investing activities
Purchases of property and equipment		(297,910	)		(380,122	)
Deposit with Union Pacific		-			(600,000	)
Net cash used in investing activities		(297,910	)		(980,122	)
Cash flows from financing activities
Proceeds from sale of stock		275,000			2,282,000
Proceeds from exercise of warrants		-			9,000
Proceeds from convertible notes payable		2,903,000			1,900,000
Proceeds from notes payable		-			820,000
Payments on note payable		-			(38,805	)
Net cash provided by financing activities		3,178,000			4,972,195
Net change in cash		(1,174,705	)		1,208,983
Cash, beginning of the period		1,262,615			53,632
Cash, end of the period	$	87,910		$	1,262,615
Supplemental disclosure of cash flow information:
Interest paid	$	-		$	5,497
Income taxes paid	$	-		$	-
Supplemental disclosure of non-cash investing and financing transactions:
Stock issued to settle stock subscriptions	$	-		$	640,000
Stock issued for debt and accrued interest	$	2,845,391		$	1,907,050
Warrants issued for payment of property and equipment	$	-		$	12,763
Increase in liabilities of discontinued operations from forbearance agreement	$	-		$	58,754

See accompanying notes to financial statements

25

LAS VEGAS RAILWAY EXPRESS, INC.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED MARCH 31, 2014 and 2013

(1)  Description of Business:

Las Vegas Railway Express, Inc.  (the “Company”) was formed as a Delaware corporation in March 9, 2007 as Corporate Outfitters, Inc., a development stage company. On November 3, 2008, pursuant to a common stock purchase agreement, the Company acquired 100% of the outstanding capital stock of Liberty Capital Asset Management, a Nevada corporation, formed in July of 2008 as a holding company for all the assets of CD Banc LLC in contemplation of the company going public via a reverse merger into a publicly trading corporation.  CD Banc LLC was formed in 2003 as a Nevada limited liability corporation with the purpose of acquiring real estate assets and holding them for long-term appreciation.  On January 21, 2010, the Company completed a share exchange and asset purchase agreement with Las Vegas Railway Express, a Nevada Corporation, and subsequently changed its name from Liberty Capital Asset Management, Inc. to Las Vegas Railway Express, Inc.

The Company previously pursued a business plan of establishing passenger rail service between the Los Angeles area and Las Vegas, Nevada.  During 2014, the Company changed its focus to providing upscale commuter Club X railcars for various state Department of Transportation municipal agencies.

The Company owns outright 16 bi-level passenger railcars as well as two leased cars acquired through an agreement with Mid America Leasing Company.

(2)  Summary of Significant Accounting Policies:

Basis of Presentation:

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). 

Effective on December 2, 2013, the Company executed a one-for-twenty reverse split of the Company’s issued and outstanding shares of common stock.  All references to number of shares and per share amounts included in this report give effect to the reverse stock split.

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 $13,052,020 and $6,766,091 for the years ended March 31, 2014 and 2013, respectively.  The Company also has an accumulated deficit of $31,627,643 and a negative working capital of $2,736,886 as of March 31, 2014, as well as outstanding convertible notes payable of $2,023,000, of which $1,750,000 is due on June 30, 2014.  Management believes that it will need additional equity or debt financing to be able to implement the 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.

26

Risks and Uncertainties:

The Company generates no revenues.  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.  Amounts could materially change in the future.

Cash and Cash Equivalents:

The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents.

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.

Intangible Assets:

Goodwill represents the excess of purchase price over tangible and intangible assets acquired, less liabilities assumed arising from the acquisition of Las Vegas Railway Express on January 21, 2010.  Goodwill is not amortized, but is reviewed for potential impairment on an annual basis at the reporting unit level.  As required by the “Intangibles – Goodwill and Other” topic of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), the Company conducted an analysis of the goodwill on March 31, 2014.  Due to the Company’s changes in the business model during the year ended March 31, 2014, management has determined the goodwill has been fully impaired as of March 31, 2014.  As a result, for the fiscal year ending March 31, 2014, the Company recorded an impairment loss of $843,697 in the accompanying statement of operations.

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. During the year ended March 31, 2014, the Company determined that $98,172 of capitalized costs relating to the construction of a proposed train station in North Las Vegas were impaired a result in the change in the Company’s business plan.  These amounts have been expensed and included as a component of professional fees during the year ended March 31, 2014.

Deposit with Union Pacific:

On November 8, 2012, the Company entered into an agreement with Union Pacific Railroad Company whereby the Company was granted a nonexclusive operating right to use Union Pacific railroad track between Daggett, California and Las Vegas, Nevada, subject to certain terms and conditions.  In connection with this agreement, the Company made an earnest money deposit of $600,000 and was required to meet certain financial conditions, including the provision of a letter of credit in favor of Union Pacific in the amount of $27,444,145 on or before October 31, 2013.   The Company elected to terminate this agreement on October 31, 2013 as it no longer planned to operate on the Union Pacific Railroad Company tracks as a regularly scheduled passenger train.  As a result, the Company determined the $600,000 deposit was impaired and expensed the amount during the year ended March 31, 2014 as a component of selling, general and administrative expenses.

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Basic and Diluted Loss Per Share:

In accordance with FASB ASC 260, “Earnings Per Share,” the basic loss per common share is computed by dividing the net loss available to common stockholders after preferred stock dividends, 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 diluted earnings per share computation for the years ended March 31, 2014 and 2013 as the amounts are anti-dilutive.  As of March 31, 2014 and 2013, the Company had 100,000 outstanding options which were excluded from the computation of net loss per share because they are anti-dilutive.  As of March 31, 2014 and 2013, the Company also had convertible debt that is convertible into 5,339,132 and 1,795,000 shares, respectively, of common stock which was excluded from the computation.  As of March 31, 2014 and 2013, the Company had 1,569,842 and 2,924,842 outstanding warrants, respectively, which were also excluded from the computation because they were anti-dilutive.

Income Taxes:

The Company accounts for income taxes under FASB ASC 740 "Income Taxes."  Under the asset and liability method of FASB ASC 740, 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.

Prior to the impairment of the goodwill as of March 31, 2014, the Company’s goodwill was deductible for tax purposes. This difference created a deferred tax liability, which could not be matched with the Company’s deferred tax asset. As a result, the Company was not able to net the deferred tax liability with its net operating loss carryforward, and therefore recorded a deferred tax liability to reflect the future non-deductibility of its goodwill asset. The deferred tax liability at March 31, 2013 was $55,914.  Upon the impairment of the goodwill as of March 31, 2014, the deferred tax liability no longer existed and amounted to $0 as of March 31, 2014.

The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of March 31, 2014 and 2013, the Company has not established a liability for uncertain tax positions.

Share Based Payment:

The Company issues stock, options and warrants as share-based compensation to employees and non-employees.

The Company accounts for its share-based compensation to employees 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. 

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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 stock options and warrants that do not qualify as derivative instruments using the Black-Scholes option pricing model.  There were no options issued during the years ended March 31, 2014 or 2013.  There were no warrants valued using the Black-Scholes model during the year ended March 31, 2014.  Assumptions used in the Black-Scholes model to value warrants issued during the year ended March 31, 2013 are as follows:

	Year Ended	Year Ended
	March 31,	March 31,
	2014	2013
Expected life in years	NA	1.5 - 10 years
Stock price volatility	NA	158.6% - 286.0%
Risk free interest rate	NA	0.25% - 1.62%
Expected dividends	NA	None
Forfeiture rate	NA	0%

Certain warrants qualify as derivative instruments and are valued using the binomial lattice method. See discussion below regarding accounting for derivative liabilities.

Derivative Liabilities:

In connection with the private placement of Convertible Notes beginning in February 2013, the Company became contingently obligated to issue shares of common stock in excess of the 200 million authorized under the Company’s certificate of incorporation.  Consequently, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability.

The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares.

Using this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued on and subsequent to November 30, 2012 had been accounted for as derivative liabilities.

On December 2, 2013, the Company effected a one-for-twenty reverse stock split of the Company’s issued and outstanding common stock shares.  As a result, the Company’s outstanding shares of common stock and common stock equivalents no longer exceeded the number of authorized shares.  As a result, as of December 2, 2013, these instruments that were accounted for as derivative liabilities were reclassified as equity.

The Company also has certain warrants and embedded conversion options in notes payable with elements that qualify as derivatives. The warrants have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and four outstanding notes payable that had a variable conversion feature that similarly prevented the calculation of the number of shares into which they were convertible.

The Company values these warrants and embedded conversion options in notes payable using the binomial lattice method.  The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations (see Note 7).

29

Fair Value of Financial Instruments:

The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, notes payable and derivative liabilities.  Derivative liabilities are recorded at fair value.  The principal balance of notes payable approximates fair value because current interest rates and terms offered to the Company for similar debt are substantially the same.

FASB ASC 820 defines fair value, establishes a framework for measuring fair value, in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The Company used Level 3 measurments in computing the fair value of goodwill, which was fully impaired on March 31, 2014.

Fair value heirarchy for recurring fair value measurements is as follows:

	Fair Value		Fair Value Measurements at March 31, 2014
	as of		Using Fair Value Heirarchy
	March 31, 2014		Level 1		Level 2		Level 3
Liabilities:
Derivative liability	$	1,138,477	$	-	$	1,138,477	$	-

(3)  Property and Equipment:

Property and equipment consisted of the following as of March 31, 2014 and 2013:

	March 31,			March 31,
	2014			2013
Office equipment	$	61,611		$	40,921
Computer software		24,167			14,192
Transportation equipment under construction		621,802			354,557
		707,580			409,670
Less: accumulated depreciation		(23,173	)		(15,881	)
	$	684,407		$	393,789

30

During the year ended March 31, 2014, the Company determined that $98,172 of capitalized costs relating to the construction of a proposed train station in North Las Vegas were impaired a result in the change in the Company’s business plan.  These amounts have been expensed and included as a component of professional fees during the year ended March 31, 2014.

(4)  Notes payable:

A summary of outstanding notes payable is as follows:

	March 31,		March 31,
	2014		2013
Secured promissory notes,  dated  May 17, 2011 through
May 17, 2012 to an investor bearing interest at 8% per annum, payable on May 17, 2012.  The Company is in default on this note.	$	13,333	$	13,333
Total outstanding notes payable	$	13,333	$	13,333

As of March 31, 2014, the Company is in default on the above note payable for $13,333.  The Company has received a demand for payment on this note as of March 31, 2014.

(5)  Convertible Notes Payable:

During February and March 2013, the Company issued a series of convertible notes payable (the “Convertible Notes”) to investors for total proceeds of $1,900,000.  The Convertible Notes are convertible into shares of the Company’s common stock at $1.00 per share at the option of the debt holder.  The Convertible Notes bear interest at a rate of 8% per annum, and have a maturity date of February 1, 2014.  Prior to March 31, 2013, the debt holders converted $105,000 of outstanding principal into 105,000 shares of common stock.  As a result, as of March 31, 2013, the remaining gross principal balance of the Convertible Notes outstanding amounted to $1,795,000.

During the year ended March 31, 2014, the Company issued additional Convertible Notes to investors for additional proceeds of $880,000 with the same terms as described above.  During the year ended March 31, 2014, the debt holders converted $460,000 of outstanding principal and $9,287 of accrued interest into 469,287 shares of common stock pursuant to the original terms in the agreements.

Prior to the maturity date of the Convertible Notes on February 1, 2014, to induce the debt holders to promptly convert their remaining outstanding balances into shares of the Company’s common stock, the Company offered the debt holders with balances still outstanding a one-time reduction in the conversion rate from $1.00 per share to $0.60 per share.  The debt holders had until February 28, 2014 in order to exercise the reduced conversion rate.

Subsequent to the offer being made, all remaining debt holders of the Convertible Notes elected to convert their outstanding principal and accrued interest balances into shares of common stock at the reduced rate of $0.60 per share.  The aggregate principal balance of the Convertible Notes converted at the reduced rate amounted to $2,215,000, as well as accrued interest balances of $161,104.  This resulted in 3,960,174 shares of common stock issuable as payment for the outstanding principal and interest.  As of March 31, 2014, the Company had issued 3,941,483 shares of common stock for the conversion of the Convertible Notes.  The remaining 18,991 shares issuable for the conversion of $11,224 in outstanding balances are yet to be issued as of March 31, 2014.  Under the guidance in ASC 470-20-40-16, the Company recognized an expense at each conversion date equal to the fair value of the stock and other consideration transferred after the change in terms, less the fair value of securities issuable under the original conversion terms.  The excess in value amounted to $2,217,878 and was reflected as interest expense in the accompanying statement of operations for the year ended March 31, 2014.   

31

As of March 31, 2014, there was no remaining principal balance outstanding on the Convertible Notes.

In connection with the Convertible Notes, the Company granted an aggregate of 2,680,000 (including 880,000 during the year ended March 31, 2014) warrants to purchase additional shares of common stock at an exercise price of $2.00 per share and a contractual life of 3 years.  Prior to the Company’s reverse stock split on December 2, 2013, the Company did not have sufficient authorized shares to satisfy the exercise of these warrants.  As a result, the warrants issued during the nine months ended December 31, 2013 were determined to be derivative liabilities which resulted in additional derivative liabilities of $1,372,237.  The conversion option associated with the Convertible Notes was bifurcated and also recorded as a derivative liability. See Note 7, Derivative Instruments.

The value of the derivative liabilities and discounts created through the issuance of the Convertible Notes and warrants during the year ended March 31, 2014 as described above exceeded the proceeds of the Convertible Notes by $1,675,450. This excess was recorded as interest expense on the issuance dates of each note and warrant during the year ended March 31, 2014.

On October 1, 2013, the Company entered into a promissory note which provides for the Company to borrow up to $350,000 in principal (the “Promissory Note”).  As of March 31, 2014, the Company has borrowed $150,000 under this Promissory Note, which represents the outstanding amount as of March 31, 2014.  Outstanding borrowings mature two years from the effective date of each payment.  If the outstanding balance of the note is repaid by the Company on or before 90 days from the effective date of the borrowing, the interest charged is 0%.  However, if the Company does not repay the note within 90 days, a one-time interest charge of 12% shall be applied to the outstanding principal sum.  The outstanding balance of the note may be converted into common stock at the option of the debt holder at a rate equal to $0.90 per share, or 60% of the lowest trading price in the 25 days trading days previous to the conversion date.

On November 22, 2013, the Company, entered into and closed a purchase agreement (the “Purchase Agreement”) with an institutional investor, pursuant to which the Company sold to the investor a senior secured convertible promissory note in the principal amount of $1,750,000 (the “Note”), and warrants to purchase 300,000 shares of common stock (the “Warrants”), for an aggregate purchase price of $1,750,000. The Note matures on June 30, 2014, bears interest at the rate of 10% per year payable on maturity in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock at a conversion price equal to $0.70, subject to adjustment in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the conversion price then in effect.  The Warrants have a five year term, are exercisable on a cash or cashless basis, and have an exercise price equal to $1.00, subject to adjustment in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the exercise price then in effect.

The Company’s obligations under the Note are secured by substantially all of the Company’s assets pursuant to a security agreement, dated November 22, 2013 (the “Security Agreement”), between the Company and the Investor.

On March 24, 2014, the Company entered into a Convertible Promissory Note with Iconic Holdings, LLC (the “Iconic Note”) in which the Company has access to borrow a total principal amount of $165,000.  All borrowings incur interest at a rate of 8% per annum, which is payable as of the maturity date of March 24, 2015.  The initial borrowing made by the Company amounted to $55,000, which represents the amount outstanding on the Iconic Note as of March 31, 2014.  At the option of the debt holder, the outstanding balance may be converted at any time into shares of the Company’s common stock at a conversion rate equal to the lower of $0.50 or 60% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days prior to conversion election date.

On March 25, 2014, the Company entered into a convertible note agreement with KBM Worldwide, Inc. (the “KBM Note”) for total principal borrowings of $68,000, which represented the amount outstanding as of March 31, 2014.  The amounts are due nine months after the issuance of the note on December 25, 2014, and bear interest at a rate of 8% per annum.  At the option of the debt holder, beginning 180 days after the issuance of the note, the debt holder may convert the outstanding balance of the KBM Note into shares of the Company’s common stock at a conversion rate equal to 61% of the average of the lowest three closing trading prices during the 10 trading day period prior to the conversion election date.

32

The above warrants issued with the Purchase Agreement have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and the Note, Promissory Note, Iconic Note and KBM Note balances described above have variable conversion features that similarly prevented the calculation of the number of shares into which they were convertible.  As a result, the Company accounts for both the conversion feature associated with these notes and the warrants as derivatives.  The Company values these warrants and conversion features using the binomial lattice method.  The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations.

The following summarizes the book value of the convertible notes payable outstanding as of March 31, 2014 and 2013.

	March 31,			March 31,
	2014			2013
Principal balance of convertible notes payable outstanding	$	2,023,000		$	1,795,000
Less: discount on convertible notes payable		(601,016	)		(1,678,958	)
Convertible notes payable, net	$	1,421,984		$	116,042

Future scheduled maturities of these notes payable are as follows:

	Year Ended
	March 31,
2015	$	1,873,000
2016		150,000
Total	$	2,023,000

In connection with the Convertible Notes, the Company incurred debt issuance costs, which primarily represented commissions paid to acquire the debt.  These costs have been capitalized and are being amortized through the maturity date of the notes.  Since the issuance of the Convertible Notes began in February 2013, the Company has capitalized a total of $653,151 of debt issuance costs, including the fair value of 236,000 warrants issued on April 29, 2013 as commission.  Amortization of these capitalized debt issuance costs amounted to $637,679 and $15,472 for the year ended March 31, 2014 and 2013, respectively, which is reflected as interest expense on the accompanying statement of operations.  As of March 31, 2014 and 2013, the remaining amount of capitalized debt issuance costs amounted to $0 and $116,329, respectively, which are included as a component of other current assets and other assets on the accompanying balance sheets.

33

(6)  Commitments and Contingencies:

Operating Leases

The Company leases its facilities under a rental agreement that expires in April 30, 2016.  The rental agreement includes common area maintenance, property taxes and insurance.  It also provided three months abatement of the base rent.  The Company also leases two of its railcars under an operating lease agreement for a 36 month period that provides for minimum monthly rental payments of $28,000 that expires in August 2016.

Future annual minimum payments under these operating leases are as follows:

Years ending March 31,
2015	$	480,882
2016		485,129
2017		152,457
Total	$	1,118,468

Rental expense under operating leases for the years ended March 31, 2014 and 2013 was $332,612 and $78,660, respectively.

Litigation

In the ordinary course of business, the Company may be or has been involved in legal proceedings from time to time. As of the date of this annual report, there have been no material changes to any legal proceedings relating to the Company which previously were not reported.

(7)  Derivative Instruments:

Excess Shares

In connection with the private placement of Convertible Notes beginning in February 2013 (see Note 5), the Company became contingently obligated to issue shares in excess of the 200 million shares authorized by stockholders. Consequently, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability.

The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split or anti-dilution, to have an issuance date to coincide with the event giving rise to the additional shares.

Using this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to February 19, 2013 are classified as derivative liabilities.

Other Derivatives

The Company has certain warrants and notes payable with elements that qualify as derivatives. The warrants have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and two of the notes payable had a variable conversion feature that similarly prevented the calculation of the number of shares into which they were convertible.

34

The derivative liability, as it relates to the different instruments, is shown in the following table:

	Year Ended March 31, 2014									Year ended March 31, 2013
				Conversion Feature									Conversion Feature
				of									of
	Warrants			Notes Payable			Total			Warrants			Notes Payable			Total
Beginning balance, April 1	$	1,663,394		$	1,518,143		$	3,181,537		$	134,791		$	35,708		$	170,499
Additional issuances		3,232,748			2,601,417			5,834,165			1,800,725			1,831,865			3,632,590
Exercised/converted		(33,829	)		(307,693	)		(341,522	)		(172,591	)		(178,495	)		(351,086	)
Reclassification to equity		(3,758,287	)		(1,555,085	)		(5,313,372	)		-			-			-
Change in derivative liability		(898,778	)		(1,264,012	)		(2,162,790	)		(99,531	)		(170,935	)		(270,466	)
Ending balance, March 31	$	205,248		$	992,770		$	1,198,018		$	1,663,394		$	1,518,143		$	3,181,537

The derivative liability was valued using the binomial lattice method with the following inputs.

	Year Ended			Year Ended
	March 31, 2014			March 31, 2013
Expected life in years	0.13 - 9.41 years			0.36 - 5.1 years
Stock price volatility		112.3% - 347.2	%		46.8% - 191.5	%
Discount rate		0.03% - 2.59	%		0.05% - 0.91	%
Expected dividends	None			None
Forfeiture rate		0	%		0	%

(8)  Equity:

Common Stock

The Company is authorized to issue 200,000,000 shares of common stock and no other class of stock at this time.   The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders and are not entitled to cumulate their votes in the election of directors.  The holders of common stock are entitled to any dividends that may be declared by the Board of Directors out of funds legally available therefore subject to the prior rights of holders of any outstanding shares of preferred stock and any contractual restrictions we have against the payment of dividends on common stock. In the event of our liquidation or dissolution, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock.  Holders of common stock have no preemptive or other subscription rights and no right to convert their common stock into any other securities.

During the year ended March 31, 2014, the Company issued an aggregate of 4,410,747 shares of common stock for the conversion of $2,845,411 in convertible notes payable and accrued interest.  The conversion of debt into stock resulted in a debt conversion expense of $2,217,878 (see Note 5).  This included 200,000 shares of common stock for the conversion of a $200,000 convertible note payable held by a related party entity owned by a Director of the Company.  During the year ended March 31, 2013, the Company issued an aggregate of 1,682,050 shares of common stock for the conversion of $2,056,106 of outstanding notes payable and accrued interest.

During the year ended March 31, 2014, the Company issued an aggregate of 728,143 shares of common stock as payment for services, directors’ and employee compensation resulting in total expense of $644,540.  During the year ended March 31, 2013, the Company issued an aggregate of 463,868 shares of common stock as payment for services, directors’ and employee compensation resulting in an expense of $1,538,677.   The fair value of the directors’ and employees’ service was determined by the closing price of the stock on date of grant and board of director minutes authorizing the shares.

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During the year ended March 31, 2014 and 2013, the Company issued 9,823 and 45,000 shares of common stock, respectively, for the exercise of warrants.  

During the year ended March 31, 2014, the Company sold an aggregate total of 600,000 shares of common stock for total proceeds of $275,000, including 350,000 shares of common stock to a director of the Company for total proceeds of $175,000.  During the year ended March 31, 2013, the Company issued 2,282,000 shares of common stock as part of a private placement for total proceeds of $2,282,000.

During the year ended March 31, 2014, the Company exchanged 2,875,650 outstanding warrants for 2,586,835 shares of common stock.  Under the guidance in FASB ASC 718-20-35, the Company compared the fair value of the shares of common stock issued to the fair value of the warrants exchanged.  To the extent that the fair value of the shares issued exceeded the value of the warrants as of the exchange dates, the Company recorded additional compensation costs.  This resulted in the Company recording an additional $595,042 of expense during the year ended March 31, 2014, which is reflected as a component of compensation and payroll taxes in the accompanying statement of operations.

Warrants

During the year ended March 31, 2014, the Company issued an aggregate of 880,000 warrants in connection with the Convertible Notes issued during the period, as well as 236,000 warrants for the payment of commissions associated with acquiring the Convertible Notes.  The Company also issued 300,000 warrants in connection with the senior convertible promissory note granted on November 22, 2013, which have been accounted for as derivative liabilities (see Note 7).  During the year ended March 31, 2013, the Company issued an aggregate of 1,800,000 warrants in connection with the Convertible Notes issued during the period.

During the year ended March 31, 2014, the Company issued an additional 125,000 warrants as payment of directors’ services.  The warrants were accounted for as derivative liabilities prior to the reverse stock split on December 2, 2013.  The warrants are exercisable into shares of the Company’s common stock at exercise prices between $2 and $3 per share.   

During the year ended March 31, 2013, the Company issued an aggregate total of 1,124,842 warrants for services and the purchase of fixed assets.  The warrants issued during the year ended March 31, 2013 resulted in an aggregate of $1,201,370 of expense, as well as an increase to property and equipment of $12,763 for the purchase of transportation equipment.  These warrants are exercisable into shares of the Company’s common stock at exercise prices ranging from $1.00 to $11.00 per share.

The following summarizes the Company's warrant activity during the years ended March 31, 2014 and 2013.

	Warrants
Outstanding - March 31, 2012		116,309
Granted		2,924,842
Exercised		(45,000	)
Cancelled		(71,309	)
Outstanding - March 31, 2013		2,924,842
Granted		1,541,000
Exercised		(20,350	)
Cancelled		(2,875,650	)
Outstanding - March 31, 2014		1,569,842

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 (9)  Share Based Compensation:

Stock-Option Plan

The Company’s 2011 Stock Option Plan provides for the grant of 1,000,000 incentive or non-statutory stock options to purchase common stock. Employees, who share the responsibility for the management growth or protection of the business of the Company and certain non-employees, are eligible to receive options which are approved by a committee of the Board of Directors.  These options vest over five years and are exercisable for a ten-year period from the date of the grant.

As of March 31, 2014, the Company had 100,000 options outstanding at an exercise price of $10.00 per share.  These options were fully vested as of March 31, 2013, and therefore there no further compensation cost was recorded during the year ended March 31, 2014.  Stock option compensation cost recorded during the year ended March 31, 2013 amounted to $80,524.  No options were granted or exercised during the years ended March 31, 2014 and 2013.  The outstanding options will expire in November 2018.  

Employment Agreements

The Company has an employment agreement with Michael Barron, the CEO and President of the Company, which provides for an annual salary of $180,000.  Base salary will be increased to $300,000 based upon receipt of significant corporate or public funding.  In addition, Mr. Barron is entitled to receive an incentive or performance bonus as follows:  1) Upon the Company’s execution of a definitive agreement with AMTRAK, Mr. Barron shall be granted 50,000 shares, 2) Upon the Company’s execution of a definitive agreement with BNSF, Mr. Barron shall be granted 25,000 shares, 3) Upon the Company’s execution of a definitive agreement with Union Pacific, Mr. Barron shall be granted 25,000 shares, 4) Upon the Company’s execution of a definitive agreement with a rail car provider, Mr. Barron shall be granted 25,000 shares, 5) Upon the Company’s completion of its operation of its first train between Los Angeles and Las Vegas, Mr. Barron shall be granted 75,000 shares.  He is also entitled to a car allowance of $1,000 per month.  His employment agreement provides that if we terminate him without cause, he is entitled to receive a lump sum payment equal to twice his annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mr. Barron’s employment agreement commenced as of February 1, 2012.

The Company has an employment agreement with Wanda Witoslawski which requires her to perform the duties of Chief Financial Officer and Treasurer of the Company for the duration of the employment agreement.  During the term of this Agreement, the Company agrees to pay Ms. Witoslawski a base salary at the rate of $120,000 per year.  Base salary will be increased to $200,000 per year based only upon receipt of significant corporate or public funding.  Additionally, a total of 50,000 shares per year will be vested quarterly, in arrears, for a total period of 3 years for a total of 150,000 shares.  In addition, Mrs. Witoslawski is entitled to receive an incentive or performance bonus as follows:  1) Upon the Company‘s execution of a definitive agreement with AMTRAK, Ms. Witoslawski shall be granted 25,000 shares, 2) Upon the Company’s execution of a definitive agreement with BNSF, Ms. Witoslawski shall be granted 12,500 shares, 3) Upon the Company’s execution of a definitive agreement with Union Pacific, Ms. Witoslawski shall be granted 12,500 shares, 4) Upon the Company’s execution of a definitive agreement with a rail car provider, Ms. Witoslawski shall be granted 12,500 shares, 5) Upon the Company’s completion of its operation of its first train between Los Angeles and Las Vegas, Ms. Witoslawski shall be granted 62,500 shares.  She is also entitled to a car allowance of $500 per month.  Her employment agreement provides that if we terminate her without cause, she is entitled to receive a lump sum payment equal to twice her annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mrs. Witoslawski’s employment agreement commenced as of February 1, 2012.

Due to the change in the Company’s business model, it is not probable for the stock to be issued under the above agreements.  Therefore, no further compensation cost is being recorded for the bonus shares to be issued to Mr. Barron and Ms. Witoslawski.

Our employment agreement with Penny White requires her to perform the duties of President and Chief Operating Officer of the Company for the duration of the employment agreement.  During the term of this Agreement, the Company agrees to pay Ms. White a base salary at the rate of $150,000 per year.  Additionally, a total of 1 million shares per year will be vested quarterly, in arrears, for a total period of 3 years for a total of 3 million shares.  Her employment agreement provides that if we terminate her without cause, she is entitled to receive a lump sum payment equal to twice her annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mrs. White’s employment agreement commenced as of August 15, 2012.  As of March 31, 2014, there is a total of $240,833 in unrecognized stock-based compensation expense relating to this employment agreement.

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(10)  Income Taxes:

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carry forwards.  The tax effects of significant items comprising the Company’s deferred taxes as of March 31, 2014 and 2013 are as follows:

	March 31,			March 31,
Deferred tax assets	2014			2013
Net operating loss carryforward	$	10,732,493		$	7,470,147
Share based compensation		600,019			477,373
Warrants issued in connection with debt		567,839			567,839
Valuation allowance		(11,900,351	)		(8,515,359	)
Net deferred tax assets	$	-		$	-
Deferred tax liabilities
Goodwill	$	-		$	55,914
Net deferred tax liabilities		-			55,914

A reconciliation of the provision for income taxes with the expected income tax computed by applying the federal statutory income tax rate to income before provision for income taxes for the years ended March 31, 2014 and 2013 are as follows:

	March 31,			March 31,
	2014			2013
Income tax benefit from continuing operations computed at the Federal statutory rate of 34%	$	(4,293,269	)	$	(2,463,568	)
Income tax expense from discontinued operations computed at the Federal statutory rate of 34%		-			163,097
Increase in valuation allowance		3,384,992			2,226,526
Other		852,363			73,945
Amortization of goodwill		-			13,571
(Benefit from) provision for income taxes	$	(55,914	)	$	13,571

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ASC 740 requires that the tax benefit of net operating losses carry forwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.”  Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry forward period.  Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a 100% valuation allowance against the asset amounts.

Any uncertain tax positions would be related to tax years that remain open and subject to examination by the relevant tax authorities.  The Company has no liabilities related to uncertain tax positions or unrecognized benefits as of the year end March 31, 2014 or 2013.  The Company has not accrued for interest or penalties associated with unrecognized tax liabilities.

As of March 31, 2014, the Company had federal net operating loss carry forwards of approximately $31.6 million, which may be available to offset future taxable income for tax purposes.  These net operating loss carry forwards begin to expire in 2027 through 2032.  This carry forward may be limited upon the ownership change under IRC Section 382.

(11)  Related-Party Transactions:

Michael A. Barron, the CEO and President of the Company, is a 100% owner and President of Allegheny Nevada Holdings Corporation, “Allegheny”.  The Company was indebted to Allegheny by a certain promissory note, dated January 6, 2009, of which Allegheny loaned the Company funds for working capital needs.   As of March 31, 2014 and 2013, the balance of the note was $0 and $124,301, respectively.  This note was included in liabilities of discontinued operations on the balance sheet. During the year ended March 31, 2014, the Company paid $124,301 to pay off principal balance and $27,272 for interest at the rate of 10%.

On November 23, 2009, the Company entered into an Asset Purchase Agreement with Las Vegas Railway Express, a Nevada Corporation, of which Allegheny was owner of 28.6% and Mr. Barron is a 28.6% owner, independent of Allegheny.  On January 21, 2010, by shareholder approval the Company acquired Las Vegas Railway Express for 1,000,000 shares of the Company’s stock, of which 200,000 were issued on April 23, 2010.  The remaining 800,000 shares were issued on August 15, 2012.

Dianne David Barron, the Company’s Manager of Station Development is the spouse of the CEO, Michael A. Barron and receives an annual salary of $96,000.

Joseph Cosio-Barron, former President, Secretary and Director of the Company is a 100% owner of CBS Consultants “CBS”, a Nevada Corporation.  CBS had a 22.9% ownership of Las Vegas Railway Express at the time of acquisition on October 1, 2009, the Company entered into a promissory note with Mr. Cosio-Barron for $86,709.  The Company converted 867,085 shares of the Company’s stock at $0.05 per share, resulting in a balance at March 31, 2014 and 2013 of $0 and $69,740, respectively.   This note was included in liabilities of discontinued operations on the balance sheet.  During the year ended March 31, 2014, the Company paid $69,740 to pay off principal balance and $14,592 for interest at the rate of 10%.

Gilbert H. Lamphere, a Director of the Company, is a partner of FlatWorld Capital, a company that entered into Advisory Agreement with Las Vegas Railway Express, Inc. As compensation FlatWorld Capital was issued 494,396 warrants which are exercisable into shares of common stock at exercise prices ranging from $2 to $11 per share.

During the year ended March 31, 2014, the Company issued an additional 125,000 warrants as payment of directors’ services.  The warrants are exercisable into shares of the Company’s common stock at exercise prices between $2 and $3 per share.  The Company also issued 200,000 shares of common stock for the conversion of a $200,000 convertible note payable held by a related party entity owned by a Director of the Company. 

During the year ended March 31, 2014, the Company incurred $53,822 of legal and administrative expenses relating to the formation of a limited partnership, of which the Company holds a 20% interest and is the general partner.

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John H. Marino, a former Director of the Company through March 10, 2014, is a 100% owner of Transportation Management Services, Inc., a company that entered into consulting agreement with the Company. During the year ended March 31, 2013 Transportation Management Services, Inc. was issued 30,000 shares of common stock, as well as $13,500 in cash, which resulted in total consulting expense of $43,500.  During the year ended March 31, 2014, the Company issued Transportation Management Services, Inc. 13,125 shares of common stock as payment for services provided which resulted in consulting expense of $10,500.  During the year ended March 31, 2013, the Company acquired four of its railcars from Transportation Management Services, Inc. for a total purchase price of $29,000, along with warrants to purchase 6,050 shares of common stock which were valued at $12,763.

(12)  Discontinued Operations:

Prior to January 21, 2010, the Company had been actively engaged in acquiring underperforming mortgage loan portfolios and generating revenues from re-performing, sale of loans and fee revenue.  As of January 21, 2010, the Company changed its primary business and abandoned the prior business. Accordingly, the assets and liabilities and results of operation related to this business have been classified as discontinued operations in the financial statements for all periods presented.  During the year ended March 31, 2014 and 2013, the Company had net income from discontinued operations of $0 and $476,766, respectively, which resulted from the write down of payables.

The following table summarizes the liabilities classified as discontinued operations in the accompanying balance sheets:

	March 31,		March 31,
	2014		2013
Notes payable, related party	$	-	$	194,041
	$	-	$	194,041

The Company entered into forbearance agreements with investors holding the notes that are included in liabilities to be disposed of.  The outstanding balance of the notes were fully paid by March 31, 2014.

(13)  Subsequent Events

On April 1, 2014, the Company issued stock options to 5 employees and members of management that entitle the employees to a combined 20% of the total issued and outstanding common shares.  The Company also issued stock options to directors as compensation which provides for the purchase of an aggregate total of 2,400,000 shares of common stock.  All options granted have an exercise price of $0.0001 per share.  The stock options are fully vested on the date of issuance and have a contractual life of 5 years.  Subsequent to the year ended March 31, 2014, the Company issued an aggregate total of 5,144,054 shares of common stock for the exercise of options.

On April 2, 2014, the Company entered issued a convertible promissory note for $100,000 with a maturity date of October 2, 2014.  The note is convertible into shares of the Company’s common stock at a discount of 42% of the lowest traded price during the 5 trading days preceding the conversion date.

On April 11, 2014, the Company entered into a Note Exchange Agreement with the debt holder holding the $1,750,000 senior secured convertible promissory note originally issued on November 22, 2013 under the Purchase Agreement (see Note 5).  Under the terms of the Note Exchange Agreement, the original senior secured convertible promissory note is cancelled and replaced with a new note for $2,000,000.  The new note matures on November 30, 2014, bears interest at the rate of 10% per year payable on maturity in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock at a conversion price equal to $0.45, subject to adjustments in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the conversion price then in effect.  Under the new note, the Company’s obligations are secured by substantially all of the Company’s assets, excluding any railcar assets.

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On April 14, 2014, the Company entered into a securities purchase agreement with Ascendiant Capital Partners. LLC (“Ascendiant”) whereby the Company may sell to Ascendiant up to $10 million worth of the Company’s common stock on a private placement basis.  Upon entering into the securities purchase agreement, the Company issued Ascendiant 1,250,000 shares of common stock as a commitment fee.  On June 24, 2014, the Company terminated the securities purchase agreement with Ascendiant.

On April 17, 2014, the Company issued a convertible note payable providing for borrowings up to $250,000 with a maturity date of April 17, 2016.  The note has a one-time interest charge of 12% and is due on the maturity date. The outstanding balance of the note along with accrued interest is convertible into shares of the Company’s common stock at a rate equal to the lesser of $0.25 or 60% of the lowest trade occurring during the 25 trading days preceding the conversion date.  The Company received borrowings under this convertible note payable of $50,000 in April 2014.

On April 23, 2014, the Company entered into an Assignment and Use Agreement with Santa Fe Southern Railroad (“SFSR”) with a term of 5 years, pursuant to which SFSR granted the Company exclusivity to manage and control all aspects of Excursion Services and special Event Services between Lamy and Santa Fe, New Mexico.  Under the terms of the agreement, the Company will pay for the cost of repairs of the tracks and equipment up to a sum of $250,000.  The Company and SFSR have further agreed to enter into a lease agreement for certain equipment and a service agreement to allow the Company to operate certain equipment on existing SFSR tracks.

On April 30, 2014, the Company entered into a convertible note payable providing for total borrowings of $250,000, which is payable in 3 installments of $83,333, one upon execution of the note, one due one month after execution, and one due two months after execution.  Interest on the note equals 10% of the total principal balance, regardless of how long the note is outstanding for.  The Company received payments of $83,333 on May 5, 2014 and on May 30, 2014.  The convertible note matures 6 months after the issuance, at which point the outstanding principal and interest is due.

On May 6, 2014, the Company entered into a convertible note payable providing for total borrowings of $32,500 which accrue interest at a rate of 8% per annum.  The convertible note matures and is due in full on February 12, 2015 along with any unpaid accrued interest.  The outstanding principal and accrued interest is convertible into shares of common stock at the option of the holder at a conversion rate equal to 61% of the average of the lowest 3 trading prices during the 10 trading days prior to the conversion.

On May 12, 2014, the Company entered into a secured convertible promissory note providing for total borrowings up to $335,000 which accrue interest at a rate of 10% per annum.  All outstanding borrowings mature and are due in 20 months from the issuance date.  The Company received an initial payment of $87,500 on the note issuance date.  The outstanding principal and interest is convertible into shares of common stock at the option of the holder at a conversion rate equal to the lesser of $0.35 per share or 60% of the average of the 3 lowest closing bid prices in the 20 trading days preceding the conversion date.  If the average of the 3 lowest closing bid prices is less than $0.10, then the conversion factor is reduced from 60% to 55%.  The debt holder was also issued warrants on May 12, 2014 in connection with this note payable granting the right to purchase a number of common stock shares equal to $167,500 divided by the market price (defined as the higher of the closing price on the issuance date or the volume weighted average price of the stock for the trading day that is 2 days prior to the exercise date) at an exercise price of $0.35 per share.

On May 28, 2014, the Company issued into a convertible promissory note providing for borrowings of $125,000.  The convertible promissory note matures on August 28, 2014, at which point the Company owes $187,500 which includes a total of $62,500 in interest expense.  The outstanding amounts are convertible into shares of common stock at the option of the holder at a conversion rate equal to 60% of the lowest traded price during the prior 20 trading days from the date of the conversion.

On June 13, 2014, the Company issued convertible debenture providing for total borrowing of $55,000 which accrue interest at the rate of 12% per annum. All borrowings mature and are due in one year from the issuance date. The debenture is convertible into shares of common stock at the option of the holder at the conversion rate lesser of 55% discount of the lowest closing bid price during the 25 trading days prior to the date of notice conversion or $0.25 per share.

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Subsequent to the year ended March 31, 2014, the Company issued 90,000 shares of common stock to a consultant pursuant to a consulting agreement and 50,000 shares to an employee pursuant to an employment agreement.

Subsequent to the year ended March 31, 2014, the Company issued 585,000 shares of common stock for the partial conversion of convertible notes payable and interest outstanding at March 31, 2014.  The Company also issued 18,741 shares of common stock as payment of accrued interest on note payables and 646,176 shares of common stock as a payment for aged accounts payables.

Item 9.  Changes In and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our CEO and our CFO, evaluated the effectiveness of our disclosure controls and procedures as March 31, 2014.  Based on that evaluation, our CEO and our CFO concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) were effective as of March 31, 2014 such that material information required to be disclosed is made known to management and others, as appropriate, to allow timely decision regarding required disclosure and that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

Management’s Annual Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of the CEO and CFO, evaluated the effectiveness of the Company’s internal control over financial reporting as of March 31, 2014. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control — Integrated Framework. Based on this evaluation, our management, with the participation of the CEO and CFO, concluded that, as of March 31, 2014, our internal control over financial reporting was effective.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Changes in Internal Control over Financial Reporting.

There were no changes in our internal control over financial reporting during the quarter ended March 31, 2014 that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

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Item 9B.  Other Information

None.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance.

Directors and Executive Officers

The following table sets forth information regarding our executive officers and directors:

Name	Age	Office
Michael A. Barron	63	Chairman of the Board of Directors, Chief Executive Officer
John D. McPherson	66	Director
Gilbert H. Lamphere	61	Director
Wanda Witoslawski	49	Chief Financial Officer and Treasurer
John M.B. O’Connor	59	Director
George Rebensdorf	59	Director
Penny White	53	President and Chief Operating Officer

Directors hold office for a period of one year from their election at the annual meeting of stockholders and until their successors is duly elected and qualified. Officers are elected by, and serve at the discretion of, the Board of Directors. None of the above individuals has any family relationship with any other.

Set forth below is a brief description of the background and business experience of each of our executive officers and directors.

Michael A. Barron – Chairman and Chief Executive Officer, 63

Mr. Barron has been a developer of new business enterprises for nearly 30 years. Mr. Barron began his career in 1971 where he was the Senior Planner for the City of Monterey and was the HUD liaison for the City’s downtown redevelopment project. He master planned the city’s redevelopment of famous Cannery Row, Fisherman’s Wharf, and was Secretary of the Architectural Review Committee. Mr. Barron was the founder of Citidata, the first electronic provider of computerized real estate multiple listing service (MLS) information in the nation from 1975 to 1979. Citidata became the nation’s largest provider of electronic real estate information and was sold to Moore Industries in 1979. In June 1979, TRW hired Mr. Barron to develop its real estate information services division (TRW/REIS) that acquired 11 companies in the field and eventually became the world’s largest repository of real estate property information - Experian. In November 1988, he founded and served as President, until 1992, of Finet Holdings Corporation (NASDAQ:FNCM), a publicly traded mortgage broker and banking business specializing in e-mortgage financing on site in real estate offices and remote loan origination via the Internet (www.finet.com). The company was publicly traded and maintained a market capitalization of $500 million. From March 1995-1998, Mr. Barron pioneered the first nationwide commercially deployed video conference mortgage financing platform for Intel Corporation which as a licensed mortgage banker and broker in 20 states funded over $1 billion in closed loans. He later went on to serve as CEO for Shearson Home Loans and founded Liberty Capital, a $100 million asset management company based in Las Vegas, Nevada. Mr. Barron holds a B.S. degree from California Polytechnic University. Michael A. Barron has served as Director on Las Vegas Railway Express’ Board of Directors since inception. Mr. Barron’s experience as our president and chief executive officer quality him to serve on our board of directors.

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Wanda Witoslawski - Chief Financial Officer, 49

Prior to joining the Company, Ms. Witoslawski was Controller for Ocean West Enterprises 1999-2005 and managed the mortgage banking function of that California mortgage bank.  Her duties included accounting responsibility for over 200 branch offices, management of a $100 million mortgage bank warehouse line, payroll, general ledger and corporate accounting for SEC filings of the publicly traded company.  Upon acquisition of Ocean West by Shearson Home Loans in 2005, she became Controller of publicly traded Shearson conducting the accounting operation for a staff of 1,350 employees including payroll, branch accounting and credit line management for over $200 million in warehouse banking credit.  She assisted the CEO and President in the acquisition of five mortgage companies and development of a 250 office branch system with funding in excess of $1 billion per year, controlled the expense accounting & managed Shearson’s eighteen consecutive quarters of profitability.  Upon Shearson’s exit from mortgage banking in 2007, she joined the principals Mr. Barron and Mr. Cosio-Barron as Controller at Liberty Capital Asset Management, an investor in acquiring defaulted mortgage pools, managing public accounting documents for SEC filings and the financial supervision over the liquidation of over 4,000 mortgage loans the company had acquired.  She has a Master’s Degree in Economics from the University of Gdansk, Poland, a diploma in Marketing from Kensington College of Business, London, England and a diploma in professional accounting from Learning Tree University, Irvine, CA. Ms. Witoslawski is fluent in English, Polish and Russian.

Penny White – President/ Chief Operating Officer - 53

Ms. White previously was on the Branson, MO District Marketing Counsel and Ad Committee for the Branson Chamber of Commerce and Convention and Visitors Bureau and was the Vice President for FlyBranson Travel, LLC dba Branson Air Express. Ms. White was instrumental in the startup of The Branson Airports owned airline Branson AirExpress. ¨

Prior to joining The Branson Airport, Ms. White worked for Allstate Ticketing and Tours in Las Vegas where she took a “mom and pop” company with 30 employees and 5 locations that was generating $3 million in annual revenue to a medium sized company with over 250 employees and 21 locations producing $56 million in annual revenue from managing Hotel Box Offices, Hoover Dam ticketing services to managing customer service booths at Forum Shops, Canal Shops and Miracle Mile at Planet Hollywood. During her 9 year tenure she held the positions of Controller, Vice President of Finance and Marketing and President. Several of her achievements at Allstate was developing their propriety ticketing system and securing the URL name showtickets.com, where she was instrumental in taking it from conceptual to revenue producing in 2001.

John D. McPherson – Director, 66

Mr. McPherson has served as a director of the Company since January 15, 2012. Mr. McPherson joined the Board of Directors of CSX Corporation in July 2008. He served as President and COO of Florida East Coast Railway, a wholly-owned subsidiary of Florida East Coast Industries, Inc., from 1999 until his retirement in 2007. From 1993-1998, Mr. McPherson served as Senior Vice President - Operations, and from 1998-1999, he served as President and CEO of the Illinois Central Railroad. Illinois Central became the most efficient railroad with the lowest operating ratio in North America. Prior to joining the Illinois Central Railroad, Mr. McPherson served in various capacities at Santa Fe Railroad for 25 years. As a result of his extensive career in the rail industry, Mr. McPherson serves as an expert in railroad operations. From 1997-2007, Mr. McPherson served as a member of the board of directors of TTX Company, a railcar provider and freight car management services joint venture of North American railroads. Mr. McPherson’s railroad industry knowledge and experience qualifies him to serve on the Company’s board of directors.

Gilbert H. Lamphere – Director, 61

Mr. Lamphere has served as a director of the Company since October 1, 2011. Mr. Lamphere serves on the Board of Directors of CSX Corporation and has served on the board of Canadian National Railway, Chaired the Board of the Illinois Central Railroad and served on the board of Florida East Coast Railway (350 miles down East Coast of Florida).  He was also instrumental in the investment and oversight of Mid-South Rail.  Mid-South, Illinois Central and Canadian National became successively the most efficient railroads with the lowest operating ratios in North America. He is the Managing Director of Lamphere Capital Management, a private investment firm which he founded in 1999 and Chairman of FlatWorld Acquisition Corp., a publicly traded private equity company. He has served as a director of numerous other public companies, including Carlyle Industries, Inc., Cleveland-Cliffs, Inc., R.P. Scherer Corporation, Global Natural Resources Corporation and Recognition International, Inc. Earlier in his career, Mr. Lamphere was Vice President of Mergers and Acquisitions at Morgan Stanley. Mr. Lamphere’s railroad industry knowledge and experience qualify him to serve on our board of directors.

44

John M. B. O’Connor - Director, 59

Mr. O’Connor has served as a director of the Company since January 11, 2013. Mr. O’Connor is Chairman of J.H. Whitney Investment Management, LLC, a position he has held since January 2005. From January 2009 to March 2011, Mr. O’Connor also served as Chief Executive Officer of Tactronics Holdings, LLC a Whitney Capital Partners portfolio Holding Company that provided tactical integrated electronic systems to U.S. and foreign military customers as well as composite armor solutions for military vehicles through its Armostruxx division. Previously, Mr. O’Connor was Chairman of JP Morgan Alternative Asset Management, Inc. (part of the investment manager arm of JP Morgan), Chairman of JP Morgan Incubator Strategies, Inc. (a hedge fund investment arm of JP Morgan) and an Executive Partner of JP Morgan Partners (a private equity firm) and responsible for all proprietary and client Hedge Fund and Fund of Fund activities of JP Morgan, in addition to his responsibilities as a Senior Private Equity Manager. He was also a member of the Risk Management Committee of JP Morgan Chase, which is responsible for policy formulation and oversight of all market and credit risk taking activities globally. Mr. O’Connor earned a bachelor’s degree in economics from Tulane University and an MBA degree from Columbia University Graduate School of Business. Mr. O’Connor serves as a special consultant in a pro-bono capacity for the U.S. Department of Defense and is an appointed special consultant to the Department of Defense Business Board. He is a member of the Senior Advisors Panel of both the United States European Command and the United States Southern Command and a member of the Highland Forum which supports the Under Secretary of Defense for Intelligence. Mr. O’Connor also serves on the boards of the Fund for the City of New York (an organization which develops and helps implement innovations in policy, programs, practices and technology in order to advance the functioning of government and nonprofit organizations) and The Animal Care and Control Center in the City of New York as well as North Carolina Outward Bound. He is a trustee of the China Institute (the oldest institution in America focused on the U.S.—China relationship). Mr. O’Connor has been a director of Olin Corporation since 2006, where he is a member of the Audit Committee and the Directors and Corporate Governance Committee. Mr. O’Connor’s financial and business executive knowledge and experience qualify him to serve on the Company’s board of directors.

George Rebensdorf - Director, 59

Mr. Rebensdorf, 58, is a finance and M&A professional with over 25 years of experience in all phases of industry, both domestically and internationally. He has worked with financial and investment banking firms of all sizes and has participated in over 50 merger and acquisition transactions valued at over $1.2 billion. He has served as an advisor in public and private financings valued at over $1.8 billion, with concentrated transaction experience in the small cap and micro cap industries. He has served on the Board of Directors of numerous public and private companies which he or his investors have invested in. Mr. Rebensdorf is highly experienced with corporate and SEC compliance standards. He graduated magna cum laude from Arizona State University, and holds a Juris Doctor degree from Creighton University School of Law. Since July 1996, Mr. Rebensdorf has been President of The Rebensdorf Group, Inc. (“TRGI”), a boutique investment banking and consulting firm dealing primarily with emerging growth companies. TRGI’s clients included companies of all sizes and in all stages of development. TRGI has advised numerous companies from start-up phases through the IPO process. Finance projects have ranged from $1 million to $140 million. Mr. Rebensdorf’s financial and business executive knowledge and experience qualify him to serve on the Company’s board of directors.

Code of Ethics

The Company has adopted a Code of Ethics that applies to the Company’s principal executive officer, principal financial officer and principal accounting officer.

Section 16(a) Beneficial Ownership Compliance

Our officers, directors and shareholders owning greater than ten percent (10%) of our shares are required to file beneficial ownership reports pursuant to Section 16(a) of the Securities and Exchange Act (the “Exchange Act”). To the Company’s knowledge, all such reporting obligations were complied with during the year ended March 31, 2014, except that, Form 4’s were filed late for John O’Connor, John D. McPherson and George Rebensdorf.

45

Committees of the Board

The Boardof Directors has formed two committees: audit and compensation committee. The Company does not have an audit committee financial expert, because of the small size and early stage of the Company.

Nominating Committee

We do not have a separately designated nominating committee because the board makes all decisions regarding director nominations.

Involvement in Certain Legal Proceedings

Except as set forth below, to our knowledge, during the last ten years, none of our directors and executive officers have:

  · Had a bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time.

  · Been convicted in a criminal proceeding or been subject to a pending criminal proceeding, excluding traffic violations and other minor offenses.

  · Been subject to any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities.

  · Been found by a court of competent jurisdiction (in a civil action), the SEC, or the Commodities Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended or vacated.

  · Been the subject to, or a party to, any sanction or order, not subsequently reverse, suspended or vacated, of any self-regulatory organization, any registered entity, or any equivalent exchange, association, entity or organization that has disciplinary authority over its members or persons associated with a member.  

Shearson Financial Network, a mortgage company,filed for Chapter 11 bankruptcy protection in 2008. Michael A. Barron was CEO of the company at the time.

Indemnification of Directors and Officers

Section 145 of the Delaware General Corporation Law permits a corporation to indemnify its directors and officers against expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with a pending or completed action, suit or proceeding if the officer or director acted in good faith and in a manner the officer or director reasonably believed to be in the best interests of the corporation.

Our certificate of incorporation provides that, except in certain specified instances, our directors shall not be personally liable to us or our stockholders for monetary damages for breach of their fiduciary duty as directors, except for the following:

  ● any breach of their duty of loyalty to our company or our stockholders;

  ● acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

  ● unlawful payments of dividends or unlawful stock repurchases or redemptions as provided in Section 174 of the Delaware General Corporation Law; and

  ● any transaction from which the director derived an improper personal benefit.

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In addition, our certificate of incorporation and bylaws obligate us to indemnify our directors and officers against expenses and other amounts reasonably incurred in connection with any proceeding arising from the fact that such person is or was an agent of ours. Our bylaws also authorize us to purchase and maintain insurance on behalf of any of our directors or officers against any liability asserted against that person in that capacity, whether or not we would have the power to indemnify that person under the provisions of the Delaware General Corporation Law. We expect to continue to enter into agreements to indemnify our directors and officers as determined by our Board of Directors. These agreements provide for indemnification of related expenses including attorneys' fees, judgments, fines, and settlement amounts incurred by any of these individuals in any action or proceeding. We believe that these bylaw provisions and indemnification agreements are necessary to attract any retain qualified persons as directors and officers.

The limitation of liability and indemnification provisions in our certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duty. They may also reduce the likelihood of derivative litigation against our directors and officers, even though an action, if successful, might benefit us and other stockholders. Furthermore, a stockholder's investment may be adversely affected to the extent that we pay the costs of settlement and damage awards against directors and officers as required by these indemnification provisions. At present, there is no pending litigation or proceeding involving any of our directors, officers or employees regarding, which indemnification is sought, and we are not aware of any threatened litigation that may result in claims for indemnification.

Insofar as the provisions of our certificate of incorporation or bylaws provide for indemnification of directors or officers for liabilities arising under the Securities Act of 1933, as amended, or the Securities Act, we have been informed that in the opinion of the Commission this indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

Family Relationships

There are no family relationships between any of our directors or executive officers and any other directors or executive officers, except that Dianne David Barron, the Company's Manager of Station Development is the spouse of the CEO, Michael A. Barron.

Item 11.  Executive Compensation.

SUMMARY COMPENSATION TABLE

Annual Compensation

Name and						Share		All Other
Principal Position (1)	Year	Salary		Bonus		Awards (2)		Compensation		Total
Michael A. Barron	2014	$	254,444	$	-	$	-	$	12,000	$	266,444
CEO and Chairman	2013	$	246,967	$	-	$	70,000	$	12,000	$	328,967
Wanda Witoslawski	2014	$	230,000	$	-	$	220,000	$	-	$	450,000
CFO and Treasurer	2013	$	142,055	$	-	$	255,000	$	-	$	397,055
Penny White	2014	$	182,778	$	-	$	170,000	$	-	$	352,778
COO and President	2013	$	-	$	-	$	-	$	-	$	-

(1)	Penny White was appointed COO and President on February 11, 2014.  Prior to that, Michael Barron served as the President and CEO.
(2)	Stock value calculation based on the price of the stock at agreement date.

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Employment Agreements

Our employment agreement with Michael Barron requires him to perform the duties of Chief Executive Officer at an annual salary of $180,000.  Base salary will be increased to $300,000 based upon receipt of significant corporate or public funding.  In addition, Mr. Barron is entitled to receive an incentive or performance bonus as follows:  1) Upon the company’s execution of a definitive agreement with AMTRAK, Mr. Barron shall be granted 1,000,000 shares, 2) Upon the company’s execution of a definitive agreement with BNSF, Mr. Barron shall be granted 500,000 shares, 3) Upon the company’s execution of a definitive agreement with Union Pacific, Mr. Barron shall be granted 500,000 shares, 4) Upon the company’s execution of a definitive agreement with a rail car provider, Mr. Barron shall be granted 500,000 shares, 5) Upon the company’s completion of its operation of its first train between Los Angeles and Las Vegas, Mr. Barron shall be granted 1,500,000 shares.  He is also entitled to a car allowance of $1,000 per month.  His employment agreement provides that if we terminate him without cause, he is entitled to receive a lump sum payment equal to twice his annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mr. Barron’s employment agreement commenced as of February 1, 2012.

Our employment agreement with Wanda Witoslawski requires her to perform the duties of Chief Financial Officer and Treasurer of the Company for the duration of the employment agreement.  During the term of this Agreement, the Company agrees to pay Ms. Witoslawski a base salary at the rate of $120,000 per year.  Base salary will be increased to $200,000 per year based only upon receipt of significant corporate or public funding.  Additionally, a total of 1 million shares per year will be vested quarterly, in arrears, for a total period of 3 years for a total of 3 million shares.  In addition, Mrs. Witoslawski is entitled to receive an incentive or performance bonus as follows:  1) Upon the company‘s execution of a definitive agreement with AMTRAK, Ms. Witoslawski shall be granted 500,000 shares, 2) Upon the company’s execution of a definitive agreement with BNSF, Ms. Witoslawski shall be granted 250,000 shares, 3) Upon the company’s execution of a definitive agreement with Union Pacific, Ms. Witoslawski shall be granted 250,000 shares, 4) Upon the company’s execution of a definitive agreement with a rail car provider, Ms. Witoslawski shall be granted 250,000 shares, 5) Upon the company’s completion of its operation of its first train between Los Angeles and Las Vegas, Ms. Witoslawski shall be granted 750,000 shares.  She is also entitled to a car allowance of $500 per month.  Her employment agreement provides that if we terminate her without cause, she is entitled to receive a lump sum payment equal to twice her annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mrs. Witoslawski’s employment agreement commenced as of February 1, 2012.

Our employment agreement with Penny White requires her to perform the duties of President and Chief Operating Officer of the Company for the duration of the employment agreement.  During the term of this Agreement, the Company agrees to pay Ms. White a base salary at the rate of $150,000 per year.  Additionally, a total of 1 million shares per year will be vested quarterly, in arrears, for a total period of 3 years for a total of 3 million shares.  Her employment agreement provides that if we terminate her without cause, she is entitled to receive a lump sum payment equal to twice her annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mrs. White’s employment agreement commenced as of August 15, 2012.

Director Compensation for Year Ended March 31, 2014

The following table sets forth director compensation for the year ended March 31, 2014 (excluding compensation to our executive officers set forth in the summary compensation table above).

Name	Fees Earned or Paid in Cash ($)		Stock Awards ($) (1)		Total ($)
John D. McPherson		12,000		31,500		43,500
George Rebensdorf		12,000		-		12,000
Thomas Mulligan(2)		11,000		-		12,000
Gilbert H. Lamphere		12,000		47,500		59,500
John O’Connor		12,000		-		12,000

(1)	Stock value calculation based on the price of the stock at agreement date.
(2)	Resigned as a board member on June 18, 2014.

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We currently compensate our directors for being a Board member the equivalent of an initial 25,000 shares of common stock plus $12,000 annual fee for each member.  Thomas Mulligan resigned as a director on June 18, 2014.

Outstanding Equity Awards at 2014 Fiscal Year-End

The following table sets forth outstanding equity awards to our named executive officers as of March 31, 2014:

OPTION AWARDS

STOCK AWARDS

Name

Number of Securities Underlying Unexercised  Options (#) Exercisable

Number of Securities  Underlying Unexercised Options (#) Unexercisable

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised  Unearned  Options (#)

Option  Exercise Price ($)

Option  Expiration Date

Number of Shares or Units of Stock That  Have Not Vested (#)

Market Value  of Shares or Units of  Stock That  Have Not  Vested ($)

Equity Incentive Plan Awards: Number of Unearned Shares, Units  or Other Rights That Have Not  Vested (#)

Equity Incentive  Plan Awards:  Market or Payout Value  of Unearned Shares, Units or Other Rights That Have Not Vested (#)

Michael A. Barron

50,000

-

-

$

10.00

November 1, 2018

-

-

-

-

Stock Option Plan

Our Board of Directors has adopted a stock option plan and reserved an aggregate of 1,000,000 shares of common stock for grants of restricted stock and stock options under the plan.  The purpose of the plan is to enhance the long-term stockholder value of the Company by offering opportunities to officers, directors, employees and consultants of the Company to participate in our growth and success and to encourage them to remain in the service of the Company and acquire and maintain stock ownership in the Company.

The plan is currently administered by our Board of Directors, which has the authority to select individuals who are to receive grants under the plan and to specify the terms and conditions of each restricted stock grant and each option to be granted, the vesting provisions, the option term and the exercise price.  Unless otherwise provided by the Board of Directors, an option granted under the plan expires 10 years from the date of grant (5 years in the case of an incentive option granted to a holder of 10% or more of the shares of the Company’s outstanding common stock) or, if earlier, three months after the optionee’s termination of employment or service.  Options granted under the plan are not generally transferable by the optionee except by will or the laws of descent and distribution and generally are exercisable during the lifetime of the optionee only by such optionee.  The plan is subject to the approval of the stockholders within 12 months after the date of its adoption.

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The plan will remain in effect for 10 years after the date of its adoption by our Board of Directors.  The plan may be amended by the Board of Directors without the consent of the “Company’s stockholders, except that any amendment, although effective when made, will be subject to stockholder approval if required by any Federal or state law or regulation or by the rules of any stock exchange or any automated quotation system on which the Company’s common stock may then be listed or quoted.  The number of shares received under the plan and the number of shares subject to outstanding options are subject to adjustment in the event of stock splits, stock dividends and other extraordinary corporate events.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding the beneficial ownership of the Company’s Common Stock as of March 31, 2014 by (a) each of the Company's directors and executive officers, (b) all of the Company's directors and executive officers as a group and (c) each person known by the Company to be the beneficial owner of more than five percent of its outstanding common stock.

	Amount and Nature of
Directors and Officers (1)	Beneficial Ownership (2)		Percent of Class (3)
Michael Barron, CEO and Chairman (4)		1,258,214		7.60	%
Wanda Witoslawski, CFO and Treasurer		186,429		1.16	%
Penny White, President and COO (5)		150,000		0.93	%
John McPherson, Director		95,833		0.60	%
Gilbert H. Lamphere, Director (6)		1,298,601		7.98	%
Thomas Mulligan, Director (7)		50,000		0.31	%
John O'Conner, Director		158,260		0.99	%
George Rebensdorf, Director (8)		96,544		0.60	%
All directors and executive officers as a group		3,293,881		20.17	%

(1)	The address of each of the beneficial owners is 6650 Via Austi Parkway, Suite 140, Las Vegas, Nevada 89119.
(2)	In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to options held by that person that are currently exercisable, or become exercisable within 60 days are deemed outstanding. However, such shares are not deemed outstanding for purposes of computing the percentage ownership of any other person.
(3)	Based on 16,041,142 shares outstanding as of March 31, 2014.
(4)	Includes 328,103 shares held by Allegheny Nevada Holdings Corporation which is in the sole control of Michael Barron. Also includes warrants to purchase 519,396 shares of Common Stock.
(5)	Includes warrants to purchase 100,000 shares of Common Stock to be issued per employment agreement.
(6)	Includes 350,000 shares of Common Stock registered in the name of American Pension Services, Inc. for the benefit of Gilbert H. Lamphere. Also includes warrants to purchase 223,601 shares of Common Stock.
(7)	Includes warrants to purchase 25,000 shares.  Thomas Mulligan resigned as a director on June 18, 2014.

(8) Includes 4,877 shares owned by Auric Trading, LLC.

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Item 13.  Certain Relationships and Related Transactions and Director Independence

Two of our directors, John McPherson and John O’Connor, are independent directors, using the NASDAQ definition of independence.

Certain officers and directors have a beneficial ownership and are officers and directors companies which are or have been parties to financial transactions. We may be subject to various conflicts of interest in our relationship with Mr. Barron, Mr. Rebensdorf and Mr. Lamphere and their other business enterprises. Mr. Lamphere and Mr. Rebensdorf own or are partners other business enterprises that entered into advisory or consulting agreements with Las Vegas Railway Express, Inc. and Mr. Barron is executive officer, CEO, of the Company. The following is a description of transactions and relationships between us, our executive officers and our directors and each of their affiliates.

Michael A. Barron, the CEO and President of the Company, is a 100% owner and President of Allegheny Nevada Holdings Corporation, “Allegheny”.  The Company was indebted to Allegheny by a certain promissory note, dated January 6, 2009, of which Allegheny loaned the Company funds for working capital needs.   As of March 31, 2014 and 2013, the balance of the note was $0 and $124,301, respectively.  This note was included in liabilities of discontinued operations on the balance sheet. . During the year ended March 31, 2014, the Company paid $124,301 to pay off principal balance and $27,272 for interest at the rate of 10%.

On November 23, 2009, the Company entered into an Asset Purchase Agreement with Las Vegas Railway Express, a Nevada Corporation, of which Allegheny was owner of 28.6% and Mr. Barron is a 28.6% owner, independent of Allegheny.  On January 21, 2010, by shareholder approval the Company acquired Las Vegas Railway Express for 1,000,000 shares of the Company’s stock, of which 200,000 were issued on April 23, 2010.  The remaining 800,000 shares were issued on August 15, 2012.

Dianne David Barron, the Company’s Manager of Station Development is the spouse of the CEO, Michael A. Barron and receives an annual salary of $96,000.

Joseph Cosio-Barron, former President, Secretary and Director of the Company is a 100% owner of CBS Consultants “CBS”, a Nevada Corporation.  CBS had a 22.9% ownership of Las Vegas Railway Express at the time of acquisition on October 1, 2009, the Company entered into a promissory note with Mr. Cosio-Barron for $86,709.  The Company converted 867,085 shares of the Company’s stock at $0.05 per share, resulting in a balance at March 31, 2014 and 2013 of $0 and $69,740, respectively.   This note was included in liabilities of discontinued operations on the balance sheet.  During the year ended March 31, 2014, the Company paid $69,740 to pay off principal balance and $14,592 for interest at the rate of 10%.

Gilbert H. Lamphere, a Director of the Company, is a partner of FlatWorld Capital, a company that entered into Advisory Agreement with Las Vegas Railway Express, Inc.  As compensation FlatWorld Capital was issued 494,396 warrants which are exercisable into shares of common stock at exercise prices ranging from $2 to $11 per share.

During the year ended March 31, 2014, the Company issued an additional 125,000 warrants as payment of directors’ services.  The warrants are exercisable into shares of the Company’s common stock at exercise prices between $2 and $3 per share.  The Company also issued 200,000 shares of common stock for the conversion of a $200,000 convertible note payable held by a related party entity owned by a Director of the Company. 

During the year ended March 31, 2014, the Company incurred $53,822 of legal and administrative expenses relating to the formation of a limited partnership, of which the Company holds a 20% interest and is the general partner.

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John H. Marino, a former Director of the Company through March 10, 2014, is a 100% owner of Transportation Management Services, Inc., a company that entered into consulting agreement with the Company. During the year ended March 31, 2013 Transportation Management Services, Inc. was issued 30,000 shares of common stock, as well as $13,500 in cash, which resulted in total consulting expense of $43,500.  During the year ended March 31, 2014, the Company issued Transportation Management Services, Inc. 13,125 shares of common stock as payment for services provided which resulted in consulting expense of $10,500.  During the year ended March 31, 2013, the Company acquired four of its railcars from Transportation Management Services, Inc. for a total purchase price of $29,000, along with warrants to purchase 6,050 shares of common stock which were valued at $12,763.

Item 14.  Principal Accountant Fees and Services

In accordance with the SEC’s definitions and rules, “audit fees” are fees for professional services for the audit and review of our annual financial statements, and includes fees for the audit and review of our annual financial statements included in a registration statement filed under the Securities Act as well as issuance of consents and for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements except those not required by statute or regulation.  ”Audit-related fees” are fees for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements, including attestation services that are not required by statute or regulation, due diligence and services related to acquisitions.  “Tax fees” are fees for tax compliance, tax advice and tax planning, and “all other fees” are fees for any services not included in the first three categories.

Audit Fees

The aggregate fees billed by the Company's auditor for the professional services rendered in connection with the audit of the Company's annual financial statements, and reviews of the financial statements included in the Company's Forms 10-Qs for fiscal 2014 and 2013 were approximately $80,750 and $78,825, respectively.

Audit Related Fees

There were no audit related fees for the fiscal year ended March 31, 2014 and 2013.

Tax Fees

None.

All Other Fees

None.

PART IV

Item 15.  Exhibits and Financial Statement Schedules.

(1)	Financial Statements: The following financial statements are included in Item 8 of this report:
	●  Balance Sheets as of March 31, 2014 and 2013.
	●  Statements of Operations for the fiscal years ended March 31, 2014 and 2013.
	●  Statements of Cash Flows for the fiscal years ended March 31, 2014 and 2013.
	●  Statement of Stockholders’ (Deficit) for the fiscal years ended March 31, 2014 and 2013.
	●  Notes to Financial Statements.
	●  Report of Independent Registered Public Accounting Firm.

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 (2)  Exhibits:

Exhibit No.	Description
3.2	Articles of Incorporation (incorporated herein by reference to Form SB-2, filed on July 31, 2007)
3.3	By-Laws of the Registrant (incorporated herein by reference to Form SB-2, filed on July 31, 2007)
3.4A	Amended By-Laws of the Registrant dated November 3, 2008 (incorporated herein as referenced on Form 10-K, as filed on June 30, 2010)
3.4B	Amended Articles of Incorporation (incorporated herein as referenced on Form 10-K, as filed on June 30, 2010)
3.5	Amended Articles of Incorporation as dated March 19, 2010 (incorporated herein as referenced on Form 10-K, as filed on June 30, 2010)
3.6	Certificate of Merger, as dated March 19, 2010, by and between Liberty Capital Asset Management, Inc. and Las Vegas Railway Express (incorporated herein as referenced on Form 10-K, as filed on June 30, 2010)
3.7	Amended Articles of Incorporation as dated April 19, 2010 (incorporated herein as referenced on Form 10-K, as filed on June 30, 2010)
3.8	Amended By-Laws of the Registrant (incorporated herein as referenced on Form 10-K, as filed on June 30, 2010)
10.1	Advisory Agreement, by and between E/W Capital and Las Vegas Railway Express, Inc., dated July 1, 2010 (incorporated herein as referenced to Exhibit 12 on Form 8-K, as filed July 8, 2010)
10.2	Employment Agreement with Michael A. Barron, dated February 1, 2012 (incorporated herein as referenced on Form 10-K, as filed on July 10, 2012)
10.3	Employment Agreement with Wanda Witoslawski, dated February 1, 2012 (incorporated herein as referenced on Form 10-K, as filed on July 10, 2012)
10.4	Memorandum of Understanding with T-UPR (The Plaza Hotel & Casino), dated May 1, 2012 (incorporated herein as referenced on Form 10-K, as filed on July 10, 2012)
10.5	Union Pacific Railroad Company Public Project Reimbursement Agreement, dated December 1, 2010 (incorporated herein as referenced on Form 10-K/A, as filed on June 28, 2011)
10.6	Memorandum of Understanding with National Railroad Passenger Corporation, dated January 13, 2011 (incorporated herein as referenced on Form 10-K/A, as filed on June 28, 2011)
10.7	Form of Subscription Agreement (filed as exhibit to 8-K filed on March 19, 2013 and incorporated herein by reference).
10.8	Form of Note (filed as exhibit to 8-K filed on March 19, 2013 and incorporated herein by reference).
10.9	Form of Investor Warrant (filed as exhibit to 8-K filed on March 19, 2013 and incorporated herein by reference).
10.10	Employment Agreement with Penny White, dated June 20, 2012.
10.11	Asset Purchase Agreement, dated November 23, 2009, closing on January 21, 2010, between the Company and Las Vegas Railway Express, a Nevada corporation.
10.12	Consulting Agreement between the Company and Transportation Management Services, Inc. dated May 1, 2013.
10.13	Advisory Agreement between the Company and FlatWorld Capital dated November 30, 2012.
10.14	Leasing Agreement with Mid America Leasing Company dated September 5, 2013.
10.15	Agreement with Masterpiece Cuisine dated November 25, 2013
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101 INS	XBRL Instance Document*
101 SCH	XBRL Schema Document*
101 CAL	XBRL Calculation Linkbase Document*
101 DEF	XBRL Definition Linkbase Document*
101 LAB	XBRL Labels Linkbase Document*
101 PRE	XBRL Presentation Linkbase Document*

*           The XBRL related information in Exhibit 101 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liability of that section and shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

53

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on July 1, 2013.

LAS VEGAS RAILWAY EXPRESS, INC.
By:	/s/Michael A. Barron
	Michael A. Barron, Chief Executive Officer Principal Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

Name	Title	Date
/s/Michael A. Barron	Chief Executive Officer, Chairman (principal executive officer)	June 30, 2014
Michael A. Barron
/s/Wanda Witoslawski	Chief Financial Officer (principal financial and accounting officer)	June 30, 2014
Wanda Witoslawski
/s/John D. McPherson	Director	June 30, 2014
John D. McPherson
/s/Gilbert H. Lamphere	Director	June 30, 2014
Gilbert H. Lamphere
/s/John O’Connor	Director	June 30, 2014
John O’Connor
/s/George Rebensdorf	Director	June 30, 2014
George Rebensdorf

54

EX-10.10

Exhibit 10.10

 See pdf reference below.

EX-10.11

Exhibit 10.11

 See .pdf reference below.

EX-10.12

Exhibit 10.12

 See .pdf reference below.

EX-10.13

Exhibit 10.13

 See .pdf reference below

EX-10.14

Exhibit 10.14

 See .pdf reference below.

EX-10.15

Exhibit 10.15

 See .pdf reference below.

EX-31.1

Exhibit 31.1

Certifications

I, Michael A. Barron, certify that:

1. I have reviewed this annual report on Form 10-K of Las Vegas Railway Express, 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:  June 30, 2014

/s/ Michael A. Barron

Michael A. Barron

Chief Executive Officer

EX-31.2

Exhibit 31.2

Certifications

I, Wanda Witoslawski, certify that:

1. I have reviewed this annual report on Form 10-K of Las Vegas Railway Express, 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:  June 30, 2014

/s/ Wanda Witoslawski

Wanda Witoslawski

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Las Vegas Railway Express, Inc. (the “Company”) on Form 10-K for the period ended March 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael A. Barron, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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

Date:  June 30, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Las Vegas Railway Express, Inc. (the “Company”) on Form 10-K for the period ended March 31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Wanda Witoslawski, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 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/ Wanda Witoslawski

Wanda Witoslawski

Chief Financial Officer

Date:  June 30, 2014

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

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Derivative Liabilities at Fair Value

		Year Ended March 31, 2014						Year ended March 31, 2013
				Conversion Feature						Conversion Feature
				of						of
		Warrants		Notes Payable		Total		Warrants		Notes Payable		Total
Beginning balance, April 1	$	1,663,394	$	1,518,143	$	3,181,537	$	134,791	$	35,708	$	170,499
Additional issuances		3,232,748		2,601,417		5,834,165		1,800,725		1,831,865		3,632,590
Exercised/ converted		(33,829)		(307,693)		(341,522)		(172,591)		(178,495)		(351,086)
Reclassification to equity		(3,758,287)		(1,555,085)		(5,313,372)		-		-		-
Change in derivative liability		(898,778)		(1,264,012)		(2,162,790)		(99,531)		(170,935)		(270,466)
Ending balance, March 31	$	205,248	$	992,770	$	1,198,018	$	1,663,394	$	1,518,143	$	3,181,537

XML

(4) Notes Payable: Schedule of Long-term Debt Instruments (Details) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Details
Secured promissory notes, dated May 17, 2011 through May 17, 2012 to an investor bearing interest at 8% per annum, payable on May 17, 2012	$ 13,333	$ 13,333
Short term notes payable	$ 13,333	$ 13,333

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(2) Summary of Significant Accounting Policies (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Nov. 08, 2012
Deposit Assets			$ 600,000	[1]
Selling, general and administrative	1,709,461	651,503
Deposit with Union Pacific
Selling, general and administrative	600,000
Letter of Credit
Short-term Debt			$ 27,444,145

[1] The Company is required to meet certain financial conditions, including the provision of a letter of credit in favor of Union Pacific in the amount of $27,444,145 on or before March 31, 2013. Failure to meet the conditions specified in the agreement will result in the Company losing the $600,000 deposit.

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(9) Share Based Compensation: Employment Agreements (Details) (USD $)	12 Months Ended
	Mar. 31, 2014
Chief Executive Officer
Officers' Compensation	$ 180,000
Salary upon Receipt of Funding	300,000
Shares granted and vested per employment agreement	1) Upon the Company’s execution of a definitive agreement with AMTRAK, Mr. Barron shall be granted 50,000 shares, 2) Upon the Company’s execution of a definitive agreement with BNSF, Mr. Barron shall be granted 25,000 shares, 3) Upon the Company’s execution of a definitive agreement with Union Pacific, Mr. Barron shall be granted 25,000 shares, 4) Upon the Company’s execution of a definitive agreement with a rail car provider, Mr. Barron shall be granted 25,000 shares, 5) Upon the Company’s completion of its operation of its first train between Los Angeles and Las Vegas, Mr. Barron shall be granted 75,000 shares.
Monthly Car Allowance	1,000
Chief Financial Officer
Officers' Compensation	120,000
Salary upon Receipt of Funding	200,000
Shares granted and vested per employment agreement	a total of 50,000 shares per year will be vested quarterly, in arrears, for a total period of 3 years for a total of 150,000 shares. In addition, Mrs. Witoslawski is entitled to receive an incentive or performance bonus as follows: 1) Upon the Company‘s execution of a definitive agreement with AMTRAK, Ms. Witoslawski shall be granted 25,000 shares, 2) Upon the Company’s execution of a definitive agreement with BNSF, Ms. Witoslawski shall be granted 12,500 shares, 3) Upon the Company’s execution of a definitive agreement with Union Pacific, Ms. Witoslawski shall be granted 12,500 shares, 4) Upon the Company’s execution of a definitive agreement with a rail car provider, Ms. Witoslawski shall be granted 12,500 shares, 5) Upon the Company’s completion of its operation of its first train between Los Angeles and Las Vegas, Ms. Witoslawski shall be granted 62,500 shares.
Monthly Car Allowance	500
Chief Operating Officer
Officers' Compensation	150,000
Shares granted and vested per employment agreement	a total of 1 million shares per year will be vested quarterly, in arrears, for a total period of 3 years for a total of 3 million shares.
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 240,833

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(5) Convertible Notes Payable: Convertible Notes (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Proceeds from convertible notes payable	$ 2,903,000	$ 1,900,000
Convertible note share price		$ 1.00
Convertible note interest rate		8.00%
Convertible note converted amount		105,000
Shares Issued For Convertible Note		105,000
Principal balance of convertible notes payable outstanding	2,023,000	1,795,000
Proceeds from additional convertible notes	880,000
Outstanding principal converted	460,000
Accrued interest	9,287
Shares issued from convertible debt	469,287
Principal Balance of Convertible Notes converted at the reduced rate	2,215,000
Accrued Interest related to Convertible Notes converted at the reduced rate	161,104
Common Stock Shares Issuable as Payment for the Outstanding Principal and Interest	3,960,174
Common Stock Issued for the Conversion of the Convertible Notes	3,941,483
Common Stock Shares Remaining to be Issued	18,991
Common Stock Shares Issuable for the Conversion of the Outstanding Balances yet to be issued	11,224
Debt conversion expense	2,217,878
Warrants issued to purchase additional shares	2,680,000
Warrants issued to purchase additional shares exercise price	$ 2.00
Increase (Decrease) in Derivative Liabilities	1,372,237
Interest expense	7,960,987	2,198,205
Convertible Notes Payable
Interest expense	$ 1,675,450

XML

(11) Related-party Transactions: Gilbert H Lamphere, partner of FlatWorld Capital (Details) (FlatWorld Capital)	12 Months Ended
	Mar. 31, 2014
FlatWorld Capital
Warrants issued as compensation per Advisory Agreement	494,396

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(2) Summary of Significant Accounting Policies: Intangible Assets (Details) (USD $)	12 Months Ended
	Mar. 31, 2014
Details
Impairment loss	$ 843,697

XML

(2) Summary of Significant Accounting Policies: Fair Value of Financial Instruments: Fair Value, Assets Measured on Recurring Basis (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Fair Value, Assets Measured on Recurring Basis

		Fair Value		Fair Value Measurements at March 31, 2014
		as of		Using Fair Value Heirarchy
		March 31, 2014		Level 1		Level 2		Level 3
Liabilities:
Derivative liability	$	1,138,477	$	-	$	1,138,477	$	-

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(11) Related-party Transactions: Other Related Party Activity (Details) (USD $)	12 Months Ended
	Mar. 31, 2014
Related Party Transaction, Selling, General and Administrative Expenses from Transactions with Related Party	$ 53,822
Director of the Company
Additional warrants issued as payment of directors' services	125,000
Common stock issued for the conversion of a convertible note payable	200,000
Value of common stock issued for the conversion of a convertible note payable	$ 200,000

XML

(10) Income Taxes (Details) (USD $)	Mar. 31, 2014
Details
Operating Loss Carryforwards	$ 31,600,000

XML

(5) Convertible Notes Payable: November 22, 2013 Purchase Agreement (Details) (PurchaseAgreementMember, USD $)	1 Months Ended
	Nov. 30, 2013	Nov. 22, 2013
PurchaseAgreementMember
Promissory Note Maximum Amount	$ 1,750,000
Senior Secured Convertible Promissory Note - Warrants		300,000
Senior Secured Convertible Promissory Note Purchase Price		$ 1,750,000
Short-term Debt, Terms	The Note matures on June 30, 2014, bears interest at the rate of 10% per year payable on maturity in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock at a conversion price equal to $0.70, subject to adjustment in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the conversion price then in effect. The Warrants have a five year term, are exercisable on a cash or cashless basis, and have an exercise price equal to $1.00, subject to adjustment in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the exercise price then in effect.

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(11) Related-party Transactions: Dianne David Barron (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Compensation and payroll taxes	$ 2,876,141	$ 3,034,474
Manager of Station Development
Compensation and payroll taxes	$ 96,000

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(12) Discontinued Operations (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Income (Loss) from Discontinued Operations, Net of Tax, Attributable to Parent	$ 0	$ 476,766

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(11) Related-party Transactions: Joseph Cosio-Barron, Owner of CBS Consultants (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Oct. 01, 2009
Details
CBS Ownership Percentage In Las Vegas Railway Express			22.90%
CBS Promissory Note			$ 86,709
Shares Converted for CBS Promissory Note	867,085
Shares Converted for CBS Promissory Note Price Per Share	$ 0.05
CBS Promissory Note Balance Outstanding		69,740
Principal Balance of CBS Note Paid	69,740
Interest On CBS Note Paid at 10% rate	$ 14,592

XML

(10) Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Details) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Details
Deferred Tax Assets, Capital Loss Carryforwards	$ 10,732,493	$ 7,470,147
Deferred tax assets share based compensation	600,019	477,373
Deferred tax assets warrants issued in connection with debt	567,839	567,839
Deferred Tax Assets, Valuation Allowance	(11,900,351)	(8,515,359)
Deferred Tax Liabilities, Goodwill and Intangible Assets		55,914
Deferred Tax Assets, Net		$ 55,914

XML

(2) Summary of Significant Accounting Policies: Property and Equipment (Policies)

12 Months Ended

Mar. 31, 2014

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.

XML

(2) Summary of Significant Accounting Policies: Income Taxes (Details) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Details
Deferred tax liability	$ 0	$ 55,914

XML

(10) Income Taxes: Schedule of Deferred Tax Assets and Liabilities (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Deferred Tax Assets and Liabilities

		March 31,		March 31,
Deferred tax assets		2014		2013
Net operating loss carryforward	$	10,732,493	$	7,470,147
Share based compensation		600,019		477,373
Warrants issued in connection with debt		567,839		567,839
Valuation allowance		(11,900,351)		(8,515,359)
Net deferred tax assets	$	-	$	-
Deferred tax liabilities
Goodwill	$	-	$	55,914
Net deferred tax liabilities		-		55,914

XML

(11) Related-party Transactions: Las Vegas Railway Express (Details)	Aug. 15, 2012	Apr. 23, 2010	Jan. 21, 2010	Nov. 23, 2009
Details
Allengheny Ownership Percentage in Las Vegas Railway Express				28.60%
Mr. Barron Ownership Percentage in Las Vegas Railway Express				28.60%
Shares issued to acquire entity			1,000,000
Shares issued to acquire entity - issued April 23, 2010		200,000
Shares issued to acquire entity - issued August 15, 2012	800,000

XML

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

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Future Maturities of Notes Payable

		Year Ended
		March 31,
2015	$	1,873,000
2016		150,000
Total	$	2,023,000

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(3) Property and Equipment: Schedule of Other Assets, Noncurrent (Details) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Property, Plant and Equipment, Gross	$ 707,580	$ 409,670
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	(23,173)	(15,881)
Property and equipment, net of accumulated depreciation	684,407	393,789
Office Equipment
Property, Plant and Equipment, Gross	61,611	40,921
Computer Software
Property, Plant and Equipment, Gross	24,167	14,192
Railroad Transportation Equipment
Property, Plant and Equipment, Gross	$ 621,802	$ 354,557

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(8) Equity (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Common stock shares authorized	200,000,000	200,000,000
Shares issued from converted debt	4,410,747
Convertible notes payable and accrued interest	$ 2,845,411
Debt conversion expense	2,217,878
Shares converted held by related party entity	200,000
Convertible note payable held by related party entity	200,000
Shares issued as payment of notes payable	1,682,050
Outstanding notes payable and accrued interest	2,056,106
Shares issued for services	728,143	463,868
Stock issued and subscribed for services	644,540	1,538,677
Shares issued for warrants	9,823	45,000
Shares issued for private placement	600,000	2,282,000
Stock issued for cash	275,000	2,282,000
Outstanding Warrants Exchanged for Common Stock	2,875,650
Common Stock Issued in Exchange of Outstanding Warrants	2,586,835
Compensation and payroll taxes	2,876,141	3,034,474
Warrants issued in connection with convertible notes	880,000	1,800,000
Warrants issued for payments of commissions	236,000
Warrants issued in connection with senior convertible promissory note	300,000
Warrants issued for payments of directors' services	125,000
Warrants Issued for Services and the Purchase of Fixed Assets		1,124,842
WarrantsIssuedForServices		1,201,370
Warrants issued for payment of property and equipment		12,763
Warrants exchanged for shares of common stock
Compensation and payroll taxes	$ 595,042

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(5) Convertible Notes Payable: Schedule of Future Maturities of Notes Payable (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Convertible Note Gross Principal - Year One	$ 1,873,000
Convertible Note Gross Principal - Year Two	150,000
Principal balance of convertible notes payable outstanding	$ 2,023,000	$ 1,795,000

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(2) Summary of Significant Accounting Policies: Long-lived Assets (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Professional fees	$ 1,873,146	$ 1,616,524
Construction of a proposed train station
Professional fees	$ 98,172

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(3) Property and Equipment

12 Months Ended

Mar. 31, 2014

Notes

(3) Property and Equipment:

(3)  Property and Equipment:

Property and equipment consisted of the following as of March 31, 2014 and 2013:

		March 31,		March 31,
		2014		2013
Office equipment	$	61,611	$	40,921
Computer software		24,167		14,192
Transportation equipment under construction		621,802		354,557
		707,580		409,670
Less: accumulated depreciation		(23,173)		(15,881)
	$	684,407	$	393,789

During the year ended March 31, 2014, the Company determined that $98,172 of capitalized costs relating to the construction of a proposed train station in North Las Vegas were impaired a result in the change in the Company’s business plan.  These amounts have been expensed and included as a component of professional fees during the year ended March 31, 2014. 

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(5) Convertible Notes Payable (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Debt Issuance Cost	$ 653,151
Warrants Issued	236,000
Amortization of capitalized debt	637,679	15,472
Capitalized debt issuance costs balance	$ 0	$ 116,329

XML

(10) Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Effective Income Tax Rate Reconciliation

		March 31,		March 31,
		2014		2013
Income tax benefit from continuing operations computed at the Federal statutory rate of 34%	$	(4,293,269)	$	(2,463,568)
Income tax expense from discontinued operations computed at the Federal statutory rate of 34%		-		163,097
Increase in valuation allowance		3,384,992		2,226,526
Other		852,363		73,945
Amortization of goodwill		-		13,571
(Benefit from) provision for income taxes	$	(55,914)	$	13,571

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(2) Summary of Significant Accounting Policies: Income Taxes (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Income Taxes:

Income Taxes:

The Company accounts for income taxes under FASB ASC 740 "Income Taxes."  Under the asset and liability method of FASB ASC 740, 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.

Prior to the impairment of the goodwill as of March 31, 2014, the Company’s goodwill was deductible for tax purposes. This difference created a deferred tax liability, which could not be matched with the Company’s deferred tax asset. As a result, the Company was not able to net the deferred tax liability with its net operating loss carryforward, and therefore recorded a deferred tax liability to reflect the future non-deductibility of its goodwill asset. The deferred tax liability at March 31, 2013 was $55,914.  Upon the impairment of the goodwill as of March 31, 2014, the deferred tax liability no longer existed and amounted to $0 as of March 31, 2014. 

The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of March 31, 2014 and 2013, the Company has not established a liability for uncertain tax positions.

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(2) Summary of Significant Accounting Policies: Basic and Diluted Loss Per Share (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Basic and Diluted Loss Per Share:

Basic and Diluted Loss Per Share:

In accordance with FASB ASC 260, “Earnings Per Share,” the basic loss per common share is computed by dividing the net loss available to common stockholders after preferred stock dividends, 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 diluted earnings per share computation for the years ended March 31, 2014 and 2013 as the amounts are anti-dilutive.  As of March 31, 2014 and 2013, the Company had 100,000 outstanding options which were excluded from the computation of net loss per share because they are anti-dilutive.  As of March 31, 2014 and 2013, the Company also had convertible debt that is convertible into 5,339,132 and 1,795,000 shares, respectively, of common stock which was excluded from the computation.  As of March 31, 2014 and 2013, the Company had 1,569,842 and 2,924,842 outstanding warrants, respectively, which were also excluded from the computation because they were anti-dilutive.

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(5) Convertible Notes Payable: October 1, 2013 Promissory Note (Details) (Convertible Notes Payable, USD $)	1 Months Ended
	Oct. 31, 2013	Mar. 31, 2014
Convertible Notes Payable
Promissory Note Maximum Amount	$ 350,000
Convertible Notes Payable, Current		$ 150,000
Short-term Debt, Terms	Outstanding borrowings mature two years from the effective date of each payment. If the outstanding balance of the note is repaid by the Company on or before 90 days from the effective date of the borrowing, the interest charged is 0%. However, if the Company does not repay the note within 90 days, a one-time interest charge of 12% shall be applied to the outstanding principal sum. The outstanding balance of the note may be converted into common stock at the option of the debt holder at a rate equal to $0.90 per share, or 60% of the lowest trading price in the 25 days trading days previous to the conversion date.
Debt Instrument, Convertible, Stock Price Trigger	$ 0.90
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger	60.00%

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(12) Discontinued Operations: Schedule of Liabilities Classified As Discontinued Operations (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Liabilities Classified As Discontinued Operations

		March 31,		March 31,
		2014		2013
Notes payable, related party	$	-	$	194,041
	$	-	$	194,041

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(2) Summary of Significant Accounting Policies: Share Based Payment (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Share Based Payment:

Share Based Payment:

The Company issues stock, options and warrants as share-based compensation to employees and non-employees.

The Company accounts for its share-based compensation to employees 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. 

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 stock options and warrants that do not qualify as derivative instruments using the Black-Scholes option pricing model.  There were no options issued during the years ended March 31, 2014 or 2013.  There were no warrants valued using the Black-Scholes model during the year ended March 31, 2014. 

Certain warrants qualify as derivative instruments and are valued using the binomial lattice method. See discussion below regarding accounting for derivative liabilities.

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(2) Summary of Significant Accounting Policies: Derivative Liabilities (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Derivative Liabilities

Derivative Liabilities:

In connection with the private placement of Convertible Notes beginning in February 2013, the Company became contingently obligated to issue shares of common stock in excess of the 200 million authorized under the Company’s certificate of incorporation.  Consequently, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability.

The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares.

Using this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued on and subsequent to November 30, 2012 had been accounted for as derivative liabilities. 

On December 2, 2013, the Company effected a one-for-twenty reverse stock split of the Company’s issued and outstanding common stock shares.  As a result, the Company’s outstanding shares of common stock and common stock equivalents no longer exceeded the number of authorized shares.  As a result, as of December 2, 2013, these instruments that were accounted for as derivative liabilities were reclassified as equity.  

The Company also has certain warrants and embedded conversion options in notes payable with elements that qualify as derivatives. The warrants have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and four outstanding notes payable that had a variable conversion feature that similarly prevented the calculation of the number of shares into which they were convertible.

The Company values these warrants and embedded conversion options in notes payable using the binomial lattice method.  The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations (see Note 7).

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(2) Summary of Significant Accounting Policies

12 Months Ended

Mar. 31, 2014

Notes

(2) Summary of Significant Accounting Policies:

(2)  Summary of Significant Accounting Policies:

Basis of Presentation:

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). 

Effective on December 2, 2013, the Company executed a one-for-twenty reverse split of the Company’s issued and outstanding shares of common stock.  All references to number of shares and per share amounts included in this report give effect to the reverse stock split.    

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 $13,052,020 and $6,766,091 for the years ended March 31, 2014 and 2013, respectively.  The Company also has an accumulated deficit of $31,627,643 and a negative working capital of $2,736,886 as of March 31, 2014, as well as outstanding convertible notes payable of $2,023,000, of which $1,750,000 is due on June 30, 2014.  Management believes that it will need additional equity or debt financing to be able to implement the 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.

Risks and Uncertainties:

The Company generates no revenues.  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.  Amounts could materially change in the future. 

Cash and Cash Equivalents:

The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents.

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.

Intangible Assets:

Goodwill represents the excess of purchase price over tangible and intangible assets acquired, less liabilities assumed arising from the acquisition of Las Vegas Railway Express on January 21, 2010.  Goodwill is not amortized, but is reviewed for potential impairment on an annual basis at the reporting unit level.  As required by the “Intangibles – Goodwill and Other” topic of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), the Company conducted an analysis of the goodwill on March 31, 2014.  Due to the Company’s changes in the business model during the year ended March 31, 2014, management has determined the goodwill has been fully impaired as of March 31, 2014.  As a result, for the fiscal year ending March 31, 2014, the Company recorded an impairment loss of $843,697 in the accompanying statement of operations. 

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. During the year ended March 31, 2014, the Company determined that $98,172 of capitalized costs relating to the construction of a proposed train station in North Las Vegas were impaired a result in the change in the Company’s business plan.  These amounts have been expensed and included as a component of professional fees during the year ended March 31, 2014. 

Deposit with Union Pacific:

On November 8, 2012, the Company entered into an agreement with Union Pacific Railroad Company whereby the Company was granted a nonexclusive operating right to use Union Pacific railroad track between Daggett, California and Las Vegas, Nevada, subject to certain terms and conditions.  In connection with this agreement, the Company made an earnest money deposit of $600,000 and was required to meet certain financial conditions, including the provision of a letter of credit in favor of Union Pacific in the amount of $27,444,145 on or before October 31, 2013.   The Company elected to terminate this agreement on October 31, 2013 as it no longer planned to operate on the Union Pacific Railroad Company tracks as a regularly scheduled passenger train.  As a result, the Company determined the $600,000 deposit was impaired and expensed the amount during the year ended March 31, 2014 as a component of selling, general and administrative expenses.

Basic and Diluted Loss Per Share:

In accordance with FASB ASC 260, “Earnings Per Share,” the basic loss per common share is computed by dividing the net loss available to common stockholders after preferred stock dividends, 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 diluted earnings per share computation for the years ended March 31, 2014 and 2013 as the amounts are anti-dilutive.  As of March 31, 2014 and 2013, the Company had 100,000 outstanding options which were excluded from the computation of net loss per share because they are anti-dilutive.  As of March 31, 2014 and 2013, the Company also had convertible debt that is convertible into 5,339,132 and 1,795,000 shares, respectively, of common stock which was excluded from the computation.  As of March 31, 2014 and 2013, the Company had 1,569,842 and 2,924,842 outstanding warrants, respectively, which were also excluded from the computation because they were anti-dilutive.

Income Taxes:

The Company accounts for income taxes under FASB ASC 740 "Income Taxes."  Under the asset and liability method of FASB ASC 740, 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.

Prior to the impairment of the goodwill as of March 31, 2014, the Company’s goodwill was deductible for tax purposes. This difference created a deferred tax liability, which could not be matched with the Company’s deferred tax asset. As a result, the Company was not able to net the deferred tax liability with its net operating loss carryforward, and therefore recorded a deferred tax liability to reflect the future non-deductibility of its goodwill asset. The deferred tax liability at March 31, 2013 was $55,914.  Upon the impairment of the goodwill as of March 31, 2014, the deferred tax liability no longer existed and amounted to $0 as of March 31, 2014. 

The Company periodically evaluates its tax positions to determine whether it is more likely than not that such positions would be sustained upon examination by a tax authority for all open tax years, as defined by the statute of limitations, based on their technical merits. As of March 31, 2014 and 2013, the Company has not established a liability for uncertain tax positions.

Share Based Payment:

The Company issues stock, options and warrants as share-based compensation to employees and non-employees.

The Company accounts for its share-based compensation to employees 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. 

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 stock options and warrants that do not qualify as derivative instruments using the Black-Scholes option pricing model.  There were no options issued during the years ended March 31, 2014 or 2013.  There were no warrants valued using the Black-Scholes model during the year ended March 31, 2014. 

Certain warrants qualify as derivative instruments and are valued using the binomial lattice method. See discussion below regarding accounting for derivative liabilities.

Derivative Liabilities:

In connection with the private placement of Convertible Notes beginning in February 2013, the Company became contingently obligated to issue shares of common stock in excess of the 200 million authorized under the Company’s certificate of incorporation.  Consequently, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability.

The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split, to have an issuance date to coincide with the event giving rise to the additional shares.

Using this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued on and subsequent to November 30, 2012 had been accounted for as derivative liabilities. 

On December 2, 2013, the Company effected a one-for-twenty reverse stock split of the Company’s issued and outstanding common stock shares.  As a result, the Company’s outstanding shares of common stock and common stock equivalents no longer exceeded the number of authorized shares.  As a result, as of December 2, 2013, these instruments that were accounted for as derivative liabilities were reclassified as equity.  

The Company also has certain warrants and embedded conversion options in notes payable with elements that qualify as derivatives. The warrants have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and four outstanding notes payable that had a variable conversion feature that similarly prevented the calculation of the number of shares into which they were convertible.

The Company values these warrants and embedded conversion options in notes payable using the binomial lattice method.  The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations (see Note 7).

Fair Value of Financial Instruments:

The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, notes payable and derivative liabilities.  Derivative liabilities are recorded at fair value.  The principal balance of notes payable approximates fair value because current interest rates and terms offered to the Company for similar debt are substantially the same.

FASB ASC 820 defines fair value, establishes a framework for measuring fair value, in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The Company used Level 3 measurements in computing the fair value of goodwill, which was fully impaired on March 31, 2014.

Fair value hierarchy for recurring fair value measurements is as follows: 

		Fair Value		Fair Value Measurements at March 31, 2014
		as of		Using Fair Value Heirarchy
		March 31, 2014		Level 1		Level 2		Level 3
Liabilities:
Derivative liability	$	1,138,477	$	-	$	1,138,477	$	-

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(2) Summary of Significant Accounting Policies: Fair Value of Financial Instruments (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Fair Value of Financial Instruments:

Fair Value of Financial Instruments:

The Company's financial instruments as defined by FASB ASC 825-10-50 include cash, notes payable and derivative liabilities.  Derivative liabilities are recorded at fair value.  The principal balance of notes payable approximates fair value because current interest rates and terms offered to the Company for similar debt are substantially the same.

FASB ASC 820 defines fair value, establishes a framework for measuring fair value, in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. FASB ASC 820 establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1. Observable inputs such as quoted prices in active markets;

Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3. Unobservable inputs in which there is little or no market data, which requires the reporting entity to develop its own assumptions.

The Company used Level 3 measurements in computing the fair value of goodwill, which was fully impaired on March 31, 2014.

Fair value hierarchy for recurring fair value measurements is as follows: 

		Fair Value		Fair Value Measurements at March 31, 2014
		as of		Using Fair Value Heirarchy
		March 31, 2014		Level 1		Level 2		Level 3
Liabilities:
Derivative liability	$	1,138,477	$	-	$	1,138,477	$	-

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(13) Subsequent Events (Details) (USD $)	3 Months Ended
	Jun. 30, 2014
Subsequent Event 1
Stock Issued as Compensation	2,400,000
Common stock shares issued for the exericse of options	5,144,054
Subsequent Event 2
Convertible promissory note	$ 100,000
Subsequent Event 3
Note Exchange Agreement	1,750,000
Note Exchange Agreement Replacement Note	2,000,000
Subsequent Event 4
Securities Purchase Agreement	10,000,000
Commitment fee for Securities Purchase Agreement	1,250,000
Subsequent Event 5
Maximum borrowings Convertible Note Payable	250,000
Convertible Note Payable	50,000
Subsequent Event 6
Assignment and Use Agreement providing for cost of repairs of tracks and equipment	250,000
Subsequent Event 7
Maximum borrowings Convertible Note Payable	250,000
Subsequent Event 8
Maximum borrowings Convertible Note Payable	32,500
Subsequent Event 9
Convertible promissory note	335,000
Subsequent Event 10
Convertible promissory note	125,000
Subsequent Event 11
Convertible debenture	$ 55,000
Subsequent Event 12
Common stock issued pursuant to a consulting agreement	90,000
Common stock issued pursuant to an employment agreement	50,000
Subsequent Event 13
Common stock issued for the partial conversion of convertible notes payable and interest outstanding	585,000
Common stock issued as payment of accrued interest on note payables	18,741
Common stock issued as payment for aged accounts payables	646,176

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(7) Derivative Instruments: Derivative liability fair value assumptions (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Derivative liability fair value assumptions

	Year Ended	Year Ended
	March 31, 2014	March 31, 2013
Expected life in years	0.13 - 9.41 years	0.36 - 5.1 years
Stock price volatility	112.3% - 347.2%	46.8% - 191.5%
Discount rate	0.03% - 2.59%	0.05% - 0.91%
Expected dividends	None	None
Forfeiture rate	0%	0%

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(3) Property and Equipment (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Professional fees	$ 1,873,146	$ 1,616,524
Construction of a proposed train station
Professional fees	$ 98,172

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(10) Income Taxes: Schedule of Effective Income Tax Rate Reconciliation (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Effective Income Tax Rate Reconciliation at Federal Statutory Income Tax Rate, Amount	$ (4,293,269)	$ (2,463,568)
Income tax expense from discontinued operations		163,097
Effective Income Tax Rate Reconciliation, Change in Deferred Tax Assets Valuation Allowance, Amount	3,384,992	2,226,526
Effective Income Tax Rate Reconciliation, Other Adjustments, Amount	852,363	73,945
Income tax reconciliation amortization of goodwill		13,571
Income Tax Reconciliation (benefit from) provision for income taxes	$ (55,914)	$ 13,571

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BALANCE SHEETS (USD $)	Mar. 31, 2014	Mar. 31, 2013
Current assets
Cash	$ 87,910	$ 1,262,615
Other current assets	101,250	471,772
Total current assets	189,160	1,734,387
Property and equipment, net of accumulated depreciation	684,407	393,789
Deposit with Union Pacific		600,000
Other assets	22,385	25,958
Goodwill		843,697
Total other assets	22,385	1,469,655
Total assets	895,952	3,597,831
Current liabilities
Short term notes payable	13,333	13,333
Accounts payable and accrued expenses	442,711	375,295
Derivative liability	1,198,018	3,181,537
Current portion of convertible notes payable, net of discount	1,271,984	116,042
Liabilities of discontinued operations		194,041
Total current liabilities	2,926,046	3,880,248
Deferred tax liability	0	55,914
Long-term portion of convertible debt, net of current portion	150,000
TOTAL LIABILITIES	3,076,046	3,936,162
Commitments and contingencies
Stockholders' deficit
Common stock, $0.0001 par value, 200,000,000 shares authorized, 16,041,143 and 7,705,595 shares issued and outstanding as of March 31, 2014 and 2013, respectively	1,604	770
Additional paid-in capital	29,445,945	18,236,522
Accumulated deficit	(31,627,643)	(18,575,623)
Total stockholders' deficit	(2,180,094)	(338,331)
Total liabilities and stockholders' deficit	$ 895,952	$ 3,597,831

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(2) Summary of Significant Accounting Policies: Going Concern (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Net loss	$ 13,052,020	$ 6,766,091
Accumulated Other Comprehensive Income (Loss), Net of Tax	31,627,643
Negative Working Capital	2,736,886
Principal balance of convertible notes payable outstanding	$ 2,023,000	$ 1,795,000

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STATEMENT OF CASH FLOWS (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities
Net loss	$ (13,052,020)	$ (6,766,091)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	7,292	1,976
Amortization of discounts on note payable	4,835,032	2,096,482
Amortization of debt offering costs	637,680	15,472
Impairment of Union Pacific deposit	600,000
Deferred tax provision	(55,914)	13,571
Change in value of derivative liability	(2,162,790)	(270,466)
Stock issued and subscribed for services	644,540	1,538,677
Stock option compensation		80,524
Impairment loss on goodwill	843,697
Debt conversion expense	2,217,878
Stock issued for exchange of warrants	595,042
Warrants issued for services	582,837	1,201,370
Changes in operating assets and liabilities:
Change in other current assets	204,593	(440,216)
Change in other assets	3,573	(25,958)
Change in liabilities of discontinued operations, net	(194,041)	(510,631)
Change in accounts payable and accrued expenses	237,806	282,200
Net cash used in operating activities	(4,054,795)	(2,783,090)
Cash flows from investing activities
Purchases of property and equipment	(297,910)	(380,122)
Deposit with Union Pacific		(600,000)
Net cash used in investing activities	(297,910)	(980,122)
Cash flows from financing activities
Proceeds from sale of stock	275,000	2,282,000
Proceeds from exercise of warrants		9,000
Proceeds from convertible notes payable	2,903,000	1,900,000
Proceeds from notes payable		820,000
Payments on note payable		(38,805)
Net cash provided by financing activities	3,178,000	4,972,195
Net change in cash	(1,174,705)	1,208,983
Cash, beginning of the period	1,262,615	53,632
Cash, end of the period	87,910	1,262,615
Supplemental disclosure of cash flow information:
Interest paid		5,497
Income taxes paid
Supplemental disclosure of non-cash investing and financing transactions:
Stock issued to settle stock subscriptions		640,000
Stock issued for debt and accrued interest	2,845,391	1,907,050
Warrants issued for payment of property and equipment		12,763
Increase in liabilities of discontinued operations from forbearance agreement		$ 58,754

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(5) Convertible Notes Payable: March 25, 2014 KBM Note (Details) (Convertible Note Agreement, USD $)	1 Months Ended
	Mar. 31, 2014
Convertible Note Agreement
Promissory Note Maximum Amount	$ 68,000

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(4) Notes Payable: Schedule of Long-term Debt Instruments (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Long-term Debt Instruments

		March 31,		March 31,
		2014		2013
Secured promissory notes, dated May 17, 2011 through
May 17, 2012 to an investor bearing interest at 8% per annum,
payable on May 17, 2012.  The Company is in default on this note.	$	13,333	$	13,333
Total outstanding notes payable	$	13,333	$	13,333

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(7) Derivative Instruments: Schedule of Derivative Liabilities at Fair Value (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Derivative liability	$ 3,181,537	$ 170,499
Additional Issuances Derivative Liability	5,834,165	3,632,590
Exercised/converted Derivative Liability	(341,522)	(351,086)
Reclassification to Equity	(5,313,372)
Derivative Liability Change	(2,162,790)	(270,466)
Derivative liability	1,198,018	3,181,537
Warrants
Warrants	1,663,394	134,791
Derivative liability	1,663,394
Additional Issuances Derivative Liability	3,232,748	1,800,725
Exercised/converted Derivative Liability	(33,829)	(172,591)
Reclassification to Equity	(3,758,287)
Derivative Liability Change	(898,778)	(99,531)
Derivative liability	205,248	1,663,394
Debt
Derivative liability	1,518,143	35,708
Additional Issuances Derivative Liability	2,601,417	1,831,865
Exercised/converted Derivative Liability	(307,693)	(178,495)
Reclassification to Equity	(1,555,085)
Derivative Liability Change	(1,264,012)	(170,935)
Derivative liability	$ 992,770	$ 1,518,143

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(2) Summary of Significant Accounting Policies: Risks and Uncertainties (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Risks and Uncertainties:

Risks and Uncertainties:

The Company generates no revenues.  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.

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

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Convertible Notes Payable

		March 31,		March 31,
		2014		2013
Principal balance of convertible notes payable outstanding	$	2,023,000	$	1,795,000
Less: discount on convertible notes payable		(601,016)		(1,678,958)
Convertible notes payable, net	$	1,421,984	$	116,042

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(2) Summary of Significant Accounting Policies: Cash and Cash Equivalents (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Cash and Cash Equivalents:

Cash and Cash Equivalents:

The Company considers all highly liquid holdings with maturities of three months or less at the time of purchase to be cash equivalents.

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(8) Equity: Schedule of Warrant Activity (Details)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Details
Warrants Outstanding	1,569,842	2,924,842	116,309
Warrants granted	1,541,000	2,924,842
Warrants exercised	(20,350)	(45,000)
Warrants Cancelled	(2,875,650)	(71,309)

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(1) Description of Business

12 Months Ended

Mar. 31, 2014

Notes

(1) Description of Business:

(1)  Description of Business:

Las Vegas Railway Express, Inc.  (the “Company”) was formed as a Delaware corporation in March 9, 2007 as Corporate Outfitters, Inc., a development stage company. On November 3, 2008, pursuant to a common stock purchase agreement, the Company acquired 100% of the outstanding capital stock of Liberty Capital Asset Management, a Nevada corporation, formed in July of 2008 as a holding company for all the assets of CD Banc LLC in contemplation of the company going public via a reverse merger into a publicly trading corporation.  CD Banc LLC was formed in 2003 as a Nevada limited liability corporation with the purpose of acquiring real estate assets and holding them for long-term appreciation.  On January 21, 2010, the Company completed a share exchange and asset purchase agreement with Las Vegas Railway Express, a Nevada Corporation, and subsequently changed its name from Liberty Capital Asset Management, Inc. to Las Vegas Railway Express, Inc.

The Company previously pursued a business plan of establishing passenger rail service between the Los Angeles area and Las Vegas, Nevada.  During 2014, the Company changed its focus to providing upscale commuter Club X railcars for various state Department of Transportation municipal agencies. 

The Company owns outright 16 bi-level passenger railcars as well as two leased cars acquired through an agreement with Mid America Leasing Company.

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BALANCE SHEET PARENTHETICAL (USD $)	Mar. 31, 2014	Mar. 31, 2013
BALANCE SHEETS
Common stock par value	$ 0.0001	$ 0.0001
Common stock shares authorized	200,000,000	200,000,000
Common stock shares issued	16,041,143	7,705,595
Common stock shares outstanding	16,041,143	7,705,595

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(11) Related-party Transactions

12 Months Ended

Mar. 31, 2014

Notes

(11) Related-party Transactions:

(11)  Related-Party Transactions:

Michael A. Barron, the CEO and President of the Company, is a 100% owner and President of Allegheny Nevada Holdings Corporation, “Allegheny”.  The Company was indebted to Allegheny by a certain promissory note, dated January 6, 2009, of which Allegheny loaned the Company funds for working capital needs.   As of March 31, 2014 and 2013, the balance of the note was $0 and $124,301, respectively.  This note was included in liabilities of discontinued operations on the balance sheet. During the year ended March 31, 2014, the Company paid $124,301 to pay off principal balance and $27,272 for interest at the rate of 10%.

On November 23, 2009, the Company entered into an Asset Purchase Agreement with Las Vegas Railway Express, a Nevada Corporation, of which Allegheny was owner of 28.6% and Mr. Barron is a 28.6% owner, independent of Allegheny.  On January 21, 2010, by shareholder approval the Company acquired Las Vegas Railway Express for 1,000,000 shares of the Company’s stock, of which 200,000 were issued on April 23, 2010.  The remaining 800,000 shares were issued on August 15, 2012.

Dianne David Barron, the Company’s Manager of Station Development is the spouse of the CEO, Michael A. Barron and receives an annual salary of $96,000.

Joseph Cosio-Barron, former President, Secretary and Director of the Company is a 100% owner of CBS Consultants “CBS”, a Nevada Corporation.  CBS had a 22.9% ownership of Las Vegas Railway Express at the time of acquisition on October 1, 2009, the Company entered into a promissory note with Mr. Cosio-Barron for $86,709.  The Company converted 867,085 shares of the Company’s stock at $0.05 per share, resulting in a balance at March 31, 2014 and 2013 of $0 and $69,740, respectively.   This note was included in liabilities of discontinued operations on the balance sheet.  During the year ended March 31, 2014, the Company paid $69,740 to pay off principal balance and $14,592 for interest at the rate of 10%.

Gilbert H. Lamphere, a Director of the Company, is a partner of FlatWorld Capital, a company that entered into Advisory Agreement with Las Vegas Railway Express, Inc. As compensation FlatWorld Capital was issued 494,396 warrants which are exercisable into shares of common stock at exercise prices ranging from $2 to $11 per share.

During the year ended March 31, 2014, the Company issued an additional 125,000 warrants as payment of directors’ services.  The warrants are exercisable into shares of the Company’s common stock at exercise prices between $2 and $3 per share.  The Company also issued 200,000 shares of common stock for the conversion of a $200,000 convertible note payable held by a related party entity owned by a Director of the Company. 

During the year ended March 31, 2014, the Company incurred $53,822 of legal and administrative expenses relating to the formation of a limited partnership, of which the Company holds a 20% interest and is the general partner. 

John H. Marino, a former Director of the Company through March 10, 2014, is a 100% owner of Transportation Management Services, Inc., a company that entered into consulting agreement with the Company. During the year ended March 31, 2013 Transportation Management Services, Inc. was issued 30,000 shares of common stock, as well as $13,500 in cash, which resulted in total consulting expense of $43,500.  During the year ended March 31, 2014, the Company issued Transportation Management Services, Inc. 13,125 shares of common stock as payment for services provided which resulted in consulting expense of $10,500.  During the year ended March 31, 2013, the Company acquired four of its railcars from Transportation Management Services, Inc. for a total purchase price of $29,000, along with warrants to purchase 6,050 shares of common stock which were valued at $12,763.  

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Document and Entity Information (USD $)	12 Months Ended
	Mar. 31, 2014	Jun. 25, 2014	Sep. 30, 2013
Document and Entity Information:
Entity Registrant Name	LAS VEGAS RAILWAY EXPRESS, INC.
Document Type	10-K
Document Period End Date	Mar. 31, 2014
Amendment Flag	false
Entity Central Index Key	0001405227
Current Fiscal Year End Date	--03-31
Entity Common Stock, Shares Outstanding		24,075,113
Entity Public Float			$ 7,158,755
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY

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(12) Discontinued Operations

12 Months Ended

Mar. 31, 2014

Notes

(12) Discontinued Operations

(12)  Discontinued Operations:

Prior to January 21, 2010, the Company had been actively engaged in acquiring underperforming mortgage loan portfolios and generating revenues from re-performing, sale of loans and fee revenue.  As of January 21, 2010, the Company changed its primary business and abandoned the prior business. Accordingly, the assets and liabilities and results of operation related to this business have been classified as discontinued operations in the financial statements for all periods presented.  During the year ended March 31, 2014 and 2013, the Company had net income from discontinued operations of $0 and $476,766, respectively, which resulted from the write down of payables.

The following table summarizes the liabilities classified as discontinued operations in the accompanying balance sheets:

		March 31,		March 31,
		2014		2013
Notes payable, related party	$	-	$	194,041
	$	-	$	194,041

The Company entered into forbearance agreements with investors holding the notes that are included in liabilities to be disposed of.  The outstanding balance of the notes were fully paid by March 31, 2014.

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(11) Related-party Transactions: John H Marino, owner of Transportation Management Services, Inc. (Details) (John H Marino / Transportation Management Services, Inc., USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
John H Marino / Transportation Management Services, Inc.
Shares Issued For Consulting		30,000
Consulting Fees		$ 13,500
Consulting Expense	10,500	43,500
Stock issued for services - Shares	13,125
Purchase price of railcars		$ 29,000
Warrants to purchase shares of common stock		6,050
Value of warrants to purchase shares of common stock		12,763

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STATEMENT OF OPERATIONS (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating Expenses:
Compensation and payroll taxes	$ 2,876,141	$ 3,034,474
Selling, general and administrative	1,709,461	651,503
Professional fees	1,873,146	1,616,524
Impairment loss	843,697
Depreciation and amortization	7,292	1,976
Total expenses	7,309,737	5,304,477
Loss from operations	(7,309,737)	(5,304,477)
Other income (expense)
Interest expense	(7,960,987)	(2,198,205)
Change in derivative liability	2,162,790	270,466
Total other income (expense)	(5,798,197)	(1,927,739)
Net loss from continuing operations before provision for income taxes	(13,107,934)	(7,232,216)
Benefit from (provision for) income taxes	55,914	(13,571)
Net loss from continuing operations	(13,052,020)	(7,245,787)
Income from discontinued operations, net of income taxes		479,696
Net loss	$ (13,052,020)	$ (6,766,091)
Net loss per share, continuing operations, basic and diluted	$ (1.40)	$ (1.36)
Net income per share, discontinued operations, basic and diluted		$ 0.09
Net loss per share, basic and diluted	$ (1.40)	$ (1.27)
Weighted average number of common shares outstanding, basic and diluted	9,325,550	5,312,802

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(6) Commitments and Contingencies

12 Months Ended

Mar. 31, 2014

Notes

(6) Commitments and Contingencies:

(6)  Commitments and Contingencies:

Operating Leases

The Company leases its facilities under a rental agreement that expires in April 30, 2016.  The rental agreement includes common area maintenance, property taxes and insurance.  It also provided three months abatement of the base rent.  The Company also leases two of its railcars under an operating lease agreement for a 36 month period that provides for minimum monthly rental payments of $28,000 that expires in August 2016.  

Future annual minimum payments under these operating leases are as follows:

Years ending March 31,
2015	$	480,882
2016		485,129
2017		152,457
Total	$	1,118,468

Rental expense under operating leases for the years ended March 31, 2014 and 2013 was $332,612 and $78,660, respectively.

Litigation

In the ordinary course of business, the Company may be or has been involved in legal proceedings from time to time. As of the date of this annual report, there have been no material changes to any legal proceedings relating to the Company which previously were not reported.

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(5) Convertible Notes Payable

12 Months Ended

Mar. 31, 2014

Notes

(5) Convertible Notes Payable:

(5)  Convertible Notes Payable:

During February and March 2013, the Company issued a series of convertible notes payable (the “Convertible Notes”) to investors for total proceeds of $1,900,000.  The Convertible Notes are convertible into shares of the Company’s common stock at $1.00 per share at the option of the debt holder.  The Convertible Notes bear interest at a rate of 8% per annum, and have a maturity date of February 1, 2014.  Prior to March 31, 2013, the debt holders converted $105,000 of outstanding principal into 105,000 shares of common stock.  As a result, as of March 31, 2013, the remaining gross principal balance of the Convertible Notes outstanding amounted to $1,795,000.

During the year ended March 31, 2014, the Company issued additional Convertible Notes to investors for additional proceeds of $880,000 with the same terms as described above.  During the year ended March 31, 2014, the debt holders converted $460,000 of outstanding principal and $9,287 of accrued interest into 469,287 shares of common stock pursuant to the original terms in the agreements. 

Prior to the maturity date of the Convertible Notes on February 1, 2014, to induce the debt holders to promptly convert their remaining outstanding balances into shares of the Company’s common stock, the Company offered the debt holders with balances still outstanding a one-time reduction in the conversion rate from $1.00 per share to $0.60 per share.  The debt holders had until February 28, 2014 in order to exercise the reduced conversion rate.    

Subsequent to the offer being made, all remaining debt holders of the Convertible Notes elected to convert their outstanding principal and accrued interest balances into shares of common stock at the reduced rate of $0.60 per share.  The aggregate principal balance of the Convertible Notes converted at the reduced rate amounted to $2,215,000, as well as accrued interest balances of $161,104.  This resulted in 3,960,174 shares of common stock issuable as payment for the outstanding principal and interest.  As of March 31, 2014, the Company had issued 3,941,483 shares of common stock for the conversion of the Convertible Notes.  The remaining 18,991 shares issuable for the conversion of $11,224 in outstanding balances are yet to be issued as of March 31, 2014.  Under the guidance in ASC 470-20-40-16, the Company recognized an expense at each conversion date equal to the fair value of the stock and other consideration transferred after the change in terms, less the fair value of securities issuable under the original conversion terms.  The excess in value amounted to $2,217,878 and was reflected as interest expense in the accompanying statement of operations for the year ended March 31, 2014.    

As of March 31, 2014, there was no remaining principal balance outstanding on the Convertible Notes.

In connection with the Convertible Notes, the Company granted an aggregate of 2,680,000 (including 880,000 during the year ended March 31, 2014) warrants to purchase additional shares of common stock at an exercise price of $2.00 per share and a contractual life of 3 years.  Prior to the Company’s reverse stock split on December 2, 2013, the Company did not have sufficient authorized shares to satisfy the exercise of these warrants.  As a result, the warrants issued during the nine months ended December 31, 2013 were determined to be derivative liabilities which resulted in additional derivative liabilities of $1,372,237.  The conversion option associated with the Convertible Notes was bifurcated and also recorded as a derivative liability. See Note 7, Derivative Instruments.

The value of the derivative liabilities and discounts created through the issuance of the Convertible Notes and warrants during the year ended March 31, 2014 as described above exceeded the proceeds of the Convertible Notes by $1,675,450. This excess was recorded as interest expense on the issuance dates of each note and warrant during the year ended March 31, 2014.

On October 1, 2013, the Company entered into a promissory note which provides for the Company to borrow up to $350,000 in principal (the “Promissory Note”).  As of March 31, 2014, the Company has borrowed $150,000 under this Promissory Note, which represents the outstanding amount as of March 31, 2014.  Outstanding borrowings mature two years from the effective date of each payment.  If the outstanding balance of the note is repaid by the Company on or before 90 days from the effective date of the borrowing, the interest charged is 0%.  However, if the Company does not repay the note within 90 days, a one-time interest charge of 12% shall be applied to the outstanding principal sum.  The outstanding balance of the note may be converted into common stock at the option of the debt holder at a rate equal to $0.90 per share, or 60% of the lowest trading price in the 25 days trading days previous to the conversion date.

On November 22, 2013, the Company, entered into and closed a purchase agreement (the “Purchase Agreement”) with an institutional investor, pursuant to which the Company sold to the investor a senior secured convertible promissory note in the principal amount of $1,750,000 (the “Note”), and warrants to purchase 300,000 shares of common stock (the “Warrants”), for an aggregate purchase price of $1,750,000. The Note matures on June 30, 2014, bears interest at the rate of 10% per year payable on maturity in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock at a conversion price equal to $0.70, subject to adjustment in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the conversion price then in effect.  The Warrants have a five year term, are exercisable on a cash or cashless basis, and have an exercise price equal to $1.00, subject to adjustment in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the exercise price then in effect.

The Company’s obligations under the Note are secured by substantially all of the Company’s assets pursuant to a security agreement, dated November 22, 2013 (the “Security Agreement”), between the Company and the Investor.

On March 24, 2014, the Company entered into a Convertible Promissory Note with Iconic Holdings, LLC (the “Iconic Note”) in which the Company has access to borrow a total principal amount of $165,000.  All borrowings incur interest at a rate of 8% per annum, which is payable as of the maturity date of March 24, 2015.  The initial borrowing made by the Company amounted to $55,000, which represents the amount outstanding on the Iconic Note as of March 31, 2014.  At the option of the debt holder, the outstanding balance may be converted at any time into shares of the Company’s common stock at a conversion rate equal to the lower of $0.50 or 60% of the lowest trading price of the Company’s common stock during the 25 consecutive trading days prior to conversion election date. 

On March 25, 2014, the Company entered into a convertible note agreement with KBM Worldwide, Inc. (the “KBM Note”) for total principal borrowings of $68,000, which represented the amount outstanding as of March 31, 2014.  The amounts are due nine months after the issuance of the note on December 25, 2014, and bear interest at a rate of 8% per annum.  At the option of the debt holder, beginning 180 days after the issuance of the note, the debt holder may convert the outstanding balance of the KBM Note into shares of the Company’s common stock at a conversion rate equal to 61% of the average of the lowest three closing trading prices during the 10 trading day period prior to the conversion election date.         

The above warrants issued with the Purchase Agreement have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and the Note, Promissory Note, Iconic Note and KBM Note balances described above have variable conversion features that similarly prevented the calculation of the number of shares into which they were convertible.  As a result, the Company accounts for both the conversion feature associated with these notes and the warrants as derivatives.  The Company values these warrants and conversion features using the binomial lattice method.  The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations.

The following summarizes the book value of the convertible notes payable outstanding as of March 31, 2014 and 2013.

		March 31,		March 31,
		2014		2013
Principal balance of convertible notes payable outstanding	$	2,023,000	$	1,795,000
Less: discount on convertible notes payable		(601,016)		(1,678,958)
Convertible notes payable, net	$	1,421,984	$	116,042

Future scheduled maturities of these notes payable are as follows:

		Year Ended
		March 31,
2015	$	1,873,000
2016		150,000
Total	$	2,023,000

In connection with the Convertible Notes, the Company incurred debt issuance costs, which primarily represented commissions paid to acquire the debt.  These costs have been capitalized and are being amortized through the maturity date of the notes.  Since the issuance of the Convertible Notes began in February 2013, the Company has capitalized a total of $653,151 of debt issuance costs, including the fair value of 236,000 warrants issued on April 29, 2013 as commission.  Amortization of these capitalized debt issuance costs amounted to $637,679 and $15,472 for the year ended March 31, 2014 and 2013, respectively, which is reflected as interest expense on the accompanying statement of operations.  As of March 31, 2014 and 2013, the remaining amount of capitalized debt issuance costs amounted to $0 and $116,329, respectively, which are included as a component of other current assets and other assets on the accompanying balance sheets.

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(2) Summary of Significant Accounting Policies: Use of Estimates (Policies)

12 Months Ended

Mar. 31, 2014

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.  Amounts could materially change in the future. 

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(13) Subsequent Events

12 Months Ended

Mar. 31, 2014

Notes

(13) Subsequent Events

(13)  Subsequent Events

On April 1, 2014, the Company issued stock options to 5 employees and members of management that entitle the employees to a combined 20% of the total issued and outstanding common shares.  The Company also issued stock options to directors as compensation which provides for the purchase of an aggregate total of 2,400,000 shares of common stock.  All options granted have an exercise price of $0.0001 per share.  The stock options are fully vested on the date of issuance and have a contractual life of 5 years.  Subsequent to the year ended March 31, 2014, the Company issued an aggregate total of 5,144,054 shares of common stock for the exercise of options. 

On April 2, 2014, the Company entered issued a convertible promissory note for $100,000 with a maturity date of October 2, 2014.  The note is convertible into shares of the Company’s common stock at a discount of 42% of the lowest traded price during the 5 trading days preceding the conversion date. 

On April 11, 2014, the Company entered into a Note Exchange Agreement with the debt holder holding the $1,750,000 senior secured convertible promissory note originally issued on November 22, 2013 under the Purchase Agreement (see Note 5).  Under the terms of the Note Exchange Agreement, the original senior secured convertible promissory note is cancelled and replaced with a new note for $2,000,000.  The new note matures on November 30, 2014, bears interest at the rate of 10% per year payable on maturity in cash or shares of common stock at the Company’s option (subject to certain conditions), and is convertible into shares of the Company’s common stock at a conversion price equal to $0.45, subject to adjustments in the event of future stock splits, stock dividends, and similar transactions, or in the event of subsequent equity sales by the Company at a price lower than the conversion price then in effect.  Under the new note, the Company’s obligations are secured by substantially all of the Company’s assets, excluding any railcar assets. 

On April 14, 2014, the Company entered into a securities purchase agreement with Ascendiant Capital Partners. LLC (“Ascendiant”) whereby the Company may sell to Ascendiant up to $10 million worth of the Company’s common stock on a private placement basis.  Upon entering into the securities purchase agreement, the Company issued Ascendiant 1,250,000 shares of common stock as a commitment fee.  On June 24, 2014 the Company terminated the securities purchase agreement with Ascendiant. 

On April 17, 2014, the Company issued a convertible note payable providing for borrowings up to $250,000 with a maturity date of April 17, 2016.  The note has a one-time interest charge of 12% and is due on the maturity date. The outstanding balance of the note along with accrued interest is convertible into shares of the Company’s common stock at a rate equal to the lesser of $0.25 or 60% of the lowest trade occurring during the 25 trading days preceding the conversion date.  The Company received borrowings under this convertible note payable of $50,000 in April 2014. 

On April 23, 2014, the Company entered into an Assignment and Use Agreement with Santa Fe Southern Railroad (“SFSR”) with a term of 5 years, pursuant to which SFSR granted the Company exclusivity to manage and control all aspects of Excursion Services and special Event Services between Lamy and Santa Fe, New Mexico.  Under the terms of the agreement, the Company will pay for the cost of repairs of the tracks and equipment up to a sum of $250,000.  The Company and SFSR have further agreed to enter into a lease agreement for certain equipment and a service agreement to allow the Company to operate certain equipment on existing SFSR tracks. 

On April 30, 2014, the Company entered into a convertible note payable providing for total borrowings of $250,000, which is payable in 3 installments of $83,333, one upon execution of the note, one due one month after execution, and one due two months after execution.  Interest on the note equals 10% of the total principal balance, regardless of how long the note is outstanding for.  The Company received payments of $83,333 on May 5, 2014 and on May 30, 2014.  The convertible note matures 6 months after the issuance, at which point the outstanding principal and interest is due.

On May 6, 2014, the Company entered into a convertible note payable providing for total borrowings of $32,500 which accrue interest at a rate of 8% per annum.  The convertible note matures and is due in full on February 12, 2015 along with any unpaid accrued interest.  The outstanding principal and accrued interest is convertible into shares of common stock at the option of the holder at a conversion rate equal to 61% of the average of the lowest 3 trading prices during the 10 trading days prior to the conversion. 

On May 12, 2014, the Company entered into a secured convertible promissory note providing for total borrowings up to $335,000 which accrue interest at a rate of 10% per annum.  All outstanding borrowings mature and are due in 20 months from the issuance date.  The Company received an initial payment of $87,500 on the note issuance date.  The outstanding principal and interest is convertible into shares of common stock at the option of the holder at a conversion rate equal to the lesser of $0.35 per share or 60% of the average of the 3 lowest closing bid prices in the 20 trading days preceding the conversion date.  If the average of the 3 lowest closing bid prices is less than $0.10, then the conversion factor is reduced from 60% to 55%.  The debt holder was also issued warrants on May 12, 2014 in connection with this note payable granting the right to purchase a number of common stock shares equal to $167,500 divided by the market price (defined as the higher of the closing price on the issuance date or the volume weighted average price of the stock for the trading day that is 2 days prior to the exercise date) at an exercise price of $0.35 per share.      

On May 28, 2014, the Company issued into a convertible promissory note providing for borrowings of $125,000.  The convertible promissory note matures on August 28, 2014, at which point the Company owes $187,500 which includes a total of $62,500 in interest expense.  The outstanding amounts are convertible into shares of common stock at the option of the holder at a conversion rate equal to 60% of the lowest traded price during the prior 20 trading days from the date of the conversion.   

On June 13, 2014, the Company issued convertible debenture providing for total borrowing of $55,000 which accrue interest at the rate of 12% per annum. All borrowings mature and are due in one year from the issuance date. The debenture is convertible into shares of common stock at the option of the holder at the conversion rate lesser of 55% discount of the lowest closing bid price during the 25 trading days prior to the date of notice conversion or $0.25 per share.

Subsequent to the year ended March 31, 2014, the Company issued 90,000 shares of common stock to a consultant pursuant to a consulting agreement and 50,000 shares to an employee pursuant to an employment agreement. 

Subsequent to the year ended March 31, 2014, the Company issued 585,000 shares of common stock for the partial conversion of convertible notes payable and interest outstanding at March 31, 2014.  The Company also issued 18,741 shares of common stock as payment of accrued interest on note payables and 646,176 shares of common stock as a payment for aged accounts payables.

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(9) Share Based Compensation

12 Months Ended

Mar. 31, 2014

Notes

(9) Share Based Compensation:

(9)  Share Based Compensation:

Stock-Option Plan

The Company’s 2011 Stock Option Plan provides for the grant of 1,000,000 incentive or non-statutory stock options to purchase common stock. Employees, who share the responsibility for the management growth or protection of the business of the Company and certain non-employees, are eligible to receive options which are approved by a committee of the Board of Directors.  These options vest over five years and are exercisable for a ten-year period from the date of the grant.

As of March 31, 2014, the Company had 100,000 options outstanding at an exercise price of $10.00 per share.  These options were fully vested as of March 31, 2013, and therefore there no further compensation cost was recorded during the year ended March 31, 2014.  Stock option compensation cost recorded during the year ended March 31, 2013 amounted to $80,524.  No options were granted or exercised during the years ended March 31, 2014 and 2013.  The outstanding options will expire in November 2018.  

Employment Agreements

The Company has an employment agreement with Michael Barron, the CEO and President of the Company, which provides for an annual salary of $180,000.  Base salary will be increased to $300,000 based upon receipt of significant corporate or public funding.  In addition, Mr. Barron is entitled to receive an incentive or performance bonus as follows:  1) Upon the Company’s execution of a definitive agreement with AMTRAK, Mr. Barron shall be granted 50,000 shares, 2) Upon the Company’s execution of a definitive agreement with BNSF, Mr. Barron shall be granted 25,000 shares, 3) Upon the Company’s execution of a definitive agreement with Union Pacific, Mr. Barron shall be granted 25,000 shares, 4) Upon the Company’s execution of a definitive agreement with a rail car provider, Mr. Barron shall be granted 25,000 shares, 5) Upon the Company’s completion of its operation of its first train between Los Angeles and Las Vegas, Mr. Barron shall be granted 75,000 shares.  He is also entitled to a car allowance of $1,000 per month.  His employment agreement provides that if we terminate him without cause, he is entitled to receive a lump sum payment equal to twice his annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mr. Barron’s employment agreement commenced as of February 1, 2012.

The Company has an employment agreement with Wanda Witoslawski which requires her to perform the duties of Chief Financial Officer and Treasurer of the Company for the duration of the employment agreement.  During the term of this Agreement, the Company agrees to pay Ms. Witoslawski a base salary at the rate of $120,000 per year.  Base salary will be increased to $200,000 per year based only upon receipt of significant corporate or public funding.  Additionally, a total of 50,000 shares per year will be vested quarterly, in arrears, for a total period of 3 years for a total of 150,000 shares.  In addition, Mrs. Witoslawski is entitled to receive an incentive or performance bonus as follows:  1) Upon the Company‘s execution of a definitive agreement with AMTRAK, Ms. Witoslawski shall be granted 25,000 shares, 2) Upon the Company’s execution of a definitive agreement with BNSF, Ms. Witoslawski shall be granted 12,500 shares, 3) Upon the Company’s execution of a definitive agreement with Union Pacific, Ms. Witoslawski shall be granted 12,500 shares, 4) Upon the Company’s execution of a definitive agreement with a rail car provider, Ms. Witoslawski shall be granted 12,500 shares, 5) Upon the Company’s completion of its operation of its first train between Los Angeles and Las Vegas, Ms. Witoslawski shall be granted 62,500 shares.  She is also entitled to a car allowance of $500 per month.  Her employment agreement provides that if we terminate her without cause, she is entitled to receive a lump sum payment equal to twice her annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mrs. Witoslawski’s employment agreement commenced as of February 1, 2012.

Due to the change in the Company’s business model, it is not probable for the stock to be issued under the above agreements.  Therefore, no further compensation cost is being recorded for the bonus shares to be issued to Mr. Barron and Ms. Witoslawski. 

Our employment agreement with Penny White requires her to perform the duties of President and Chief Operating Officer of the Company for the duration of the employment agreement.  During the term of this Agreement, the Company agrees to pay Ms. White a base salary at the rate of $150,000 per year.  Additionally, a total of 1 million shares per year will be vested quarterly, in arrears, for a total period of 3 years for a total of 3 million shares.  Her employment agreement provides that if we terminate her without cause, she is entitled to receive a lump sum payment equal to twice her annual salary plus the present value of a performance bonus computed on the basis that we achieve all of our performance targets.  Mrs. White’s employment agreement commenced as of August 15, 2012.  As of March 31, 2014, there is a total of $240,833 in unrecognized stock-based compensation expense relating to this employment agreement.  

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(5) Convertible Notes Payable: Schedule of Convertible Notes Payable (Details) (USD $)	Mar. 31, 2014	Mar. 31, 2013
Details
Principal balance of convertible notes payable outstanding	$ 2,023,000	$ 1,795,000
Convertible notes payable discount	(601,016)	(1,678,958)
Convertible Notes Payable, Noncurrent	$ 1,421,984	$ 116,042

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(7) Derivative Instruments

12 Months Ended

Mar. 31, 2014

Notes

(7) Derivative Instruments:

(7)  Derivative Instruments:

Excess Shares

In connection with the private placement of Convertible Notes beginning in February 2013 (see Note 5), the Company became contingently obligated to issue shares in excess of the 200 million shares authorized by stockholders. Consequently, the ability to settle these obligations with shares would be unavailable causing these obligations to potentially be settled in cash. This condition creates a derivative liability.

The Company has a sequencing policy regarding share settlement wherein instruments with the earliest issuance date would be settled first. The sequencing policy also considers contingently issuable additional shares, such as those issuable upon a stock split or anti-dilution, to have an issuance date to coincide with the event giving rise to the additional shares.

Using this sequencing policy, all instruments convertible into common stock, including warrants and the conversion feature of notes payable, issued subsequent to February 19, 2013 are classified as derivative liabilities.

Other Derivatives

The Company has certain warrants and notes payable with elements that qualify as derivatives. The warrants have anti-dilution clauses that prevent calculation of the ultimate number of shares that may be issued upon exercise, and two of the notes payable had a variable conversion feature that similarly prevented the calculation of the number of shares into which they were convertible.

The derivative liability, as it relates to the different instruments, is shown in the following table:

		Year Ended March 31, 2014						Year ended March 31, 2013
				Conversion Feature						Conversion Feature
				of						of
		Warrants		Notes Payable		Total		Warrants		Notes Payable		Total
Beginning balance, April 1	$	1,663,394	$	1,518,143	$	3,181,537	$	134,791	$	35,708	$	170,499
Additional issuances		3,232,748		2,601,417		5,834,165		1,800,725		1,831,865		3,632,590
Exercised/ converted		(33,829)		(307,693)		(341,522)		(172,591)		(178,495)		(351,086)
Reclassification to equity		(3,758,287)		(1,555,085)		(5,313,372)		-		-		-
Change in derivative liability		(898,778)		(1,264,012)		(2,162,790)		(99,531)		(170,935)		(270,466)
Ending balance, March 31	$	205,248	$	992,770	$	1,198,018	$	1,663,394	$	1,518,143	$	3,181,537

The derivative liability was valued using the binomial lattice method with the following inputs.

	Year Ended	Year Ended
	March 31, 2014	March 31, 2013
Expected life in years	0.13 - 9.41 years	0.36 - 5.1 years
Stock price volatility	112.3% - 347.2%	46.8% - 191.5%
Discount rate	0.03% - 2.59%	0.05% - 0.91%
Expected dividends	None	None
Forfeiture rate	0%	0%

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(8) Equity

12 Months Ended

Mar. 31, 2014

Notes

(8) Equity:

(8)  Equity:

Common Stock

The Company is authorized to issue 200,000,000 shares of common stock and no other class of stock at this time.   The holders of common stock are entitled to one vote per share on all matters submitted to a vote of stockholders and are not entitled to cumulate their votes in the election of directors.  The holders of common stock are entitled to any dividends that may be declared by the Board of Directors out of funds legally available therefore subject to the prior rights of holders of any outstanding shares of preferred stock and any contractual restrictions we have against the payment of dividends on common stock. In the event of our liquidation or dissolution, holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preferences of any outstanding shares of preferred stock.  Holders of common stock have no preemptive or other subscription rights and no right to convert their common stock into any other securities.

During the year ended March 31, 2014, the Company issued an aggregate of 4,410,747 shares of common stock for the conversion of $2,845,411 in convertible notes payable and accrued interest.  The conversion of debt into stock resulted in a debt conversion expense of $2,217,878 (see Note 5).  This included 200,000 shares of common stock for the conversion of a $200,000 convertible note payable held by a related party entity owned by a Director of the Company.  During the year ended March 31, 2013, the Company issued an aggregate of 1,682,050 shares of common stock for the conversion of $2,056,106 of outstanding notes payable and accrued interest.

During the year ended March 31, 2014, the Company issued an aggregate of 728,143 shares of common stock as payment for services, directors’ and employee compensation resulting in total expense of $644,540.  During the year ended March 31, 2013, the Company issued an aggregate of 463,868 shares of common stock as payment for services, directors’ and employee compensation resulting in an expense of $1,538,677.   The fair value of the directors’ and employees’ service was determined by the closing price of the stock on date of grant and board of director minutes authorizing the shares.

During the year ended March 31, 2014 and 2013, the Company issued 9,823 and 45,000 shares of common stock, respectively, for the exercise of warrants.  

During the year ended March 31, 2014, the Company sold an aggregate total of 600,000 shares of common stock for total proceeds of $275,000, including 350,000 shares of common stock to a director of the Company for total proceeds of $175,000.  During the year ended March 31, 2013, the Company issued 2,282,000 shares of common stock as part of a private placement for total proceeds of $2,282,000.

During the year ended March 31, 2014, the Company exchanged 2,875,650 outstanding warrants for 2,586,835 shares of common stock.  Under the guidance in FASB ASC 718-20-35, the Company compared the fair value of the shares of common stock issued to the fair value of the warrants exchanged.  To the extent that the fair value of the shares issued exceeded the value of the warrants as of the exchange dates, the Company recorded additional compensation costs.  This resulted in the Company recording an additional $595,042 of expense during the year ended March 31, 2014, which is reflected as a component of compensation and payroll taxes in the accompanying statement of operations.  

Warrants

During the year ended March 31, 2014, the Company issued an aggregate of 880,000 warrants in connection with the Convertible Notes issued during the period, as well as 236,000 warrants for the payment of commissions associated with acquiring the Convertible Notes.  The Company also issued 300,000 warrants in connection with the senior convertible promissory note granted on November 22, 2013, which have been accounted for as derivative liabilities (see Note 7).  During the year ended March 31, 2013, the Company issued an aggregate of 1,800,000 warrants in connection with the Convertible Notes issued during the period. 

During the year ended March 31, 2014, the Company issued an additional 125,000 warrants as payment of directors’ services.  The warrants were accounted for as derivative liabilities prior to the reverse stock split on December 2, 2013.  The warrants are exercisable into shares of the Company’s common stock at exercise prices between $2 and $3 per share.   

During the year ended March 31, 2013, the Company issued an aggregate total of 1,124,842 warrants for services and the purchase of fixed assets.  The warrants issued during the year ended March 31, 2013 resulted in an aggregate of $1,201,370 of expense, as well as an increase to property and equipment of $12,763 for the purchase of transportation equipment.  These warrants are exercisable into shares of the Company’s common stock at exercise prices ranging from $1.00 to $11.00 per share. 

The following summarizes the Company's warrant activity during the years ended March 31, 2014 and 2013.

	Warrants
Outstanding - March 31, 2012	116,309
Granted	2,924,842
Exercised	(45,000)
Cancelled	(71,309)
Outstanding - March 31, 2013	2,924,842
Granted	1,541,000
Exercised	(20,350)
Cancelled	(2,875,650)
Outstanding - March 31, 2014	1,569,842

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(10) Income Taxes

12 Months Ended

Mar. 31, 2014

Notes

(10) Income Taxes:

(10)  Income Taxes:

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carry forwards.  The tax effects of significant items comprising the Company’s deferred taxes as of March 31, 2014 and 2013 are as follows:

		March 31,		March 31,
Deferred tax assets		2014		2013
Net operating loss carryforward	$	10,732,493	$	7,470,147
Share based compensation		600,019		477,373
Warrants issued in connection with debt		567,839		567,839
Valuation allowance		(11,900,351)		(8,515,359)
Net deferred tax assets	$	-	$	-
Deferred tax liabilities
Goodwill	$	-	$	55,914
Net deferred tax liabilities		-		55,914

A reconciliation of the provision for income taxes with the expected income tax computed by applying the federal statutory income tax rate to income before provision for income taxes for the years ended March 31, 2014 and 2013 are as follows:

		March 31,		March 31,
		2014		2013
Income tax benefit from continuing operations computed at the Federal statutory rate of 34%	$	(4,293,269)	$	(2,463,568)
Income tax expense from discontinued operations computed at the Federal statutory rate of 34%		-		163,097
Increase in valuation allowance		3,384,992		2,226,526
Other		852,363		73,945
Amortization of goodwill		-		13,571
(Benefit from) provision for income taxes	$	(55,914)	$	13,571

ASC 740 requires that the tax benefit of net operating losses carry forwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.”  Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carry forward period.  Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a 100% valuation allowance against the asset amounts.

Any uncertain tax positions would be related to tax years that remain open and subject to examination by the relevant tax authorities.  The Company has no liabilities related to uncertain tax positions or unrecognized benefits as of the year end March 31, 2014 or 2013.  The Company has not accrued for interest or penalties associated with unrecognized tax liabilities.

As of March 31, 2014, the Company had federal net operating loss carry forwards of approximately $31.6 million, which may be available to offset future taxable income for tax purposes.  These net operating loss carry forwards begin to expire in 2027 through 2032.  This carry forward may be limited upon the ownership change under IRC Section 382.

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(6) Commitments and Contingencies (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Operating Leases, Rent Expense	$ 332,612	$ 78,660

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(7) Derivative Instruments: Derivative liability fair value assumptions (Details)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Derivative Liability Expected life in years	0.13 - 9.41 years	0.36 - 5.1 years
Derivative Liability Stock Price Volatility	112.3% - 347.2%	46.8% - 191.5%
Derivative Liability Discount Rate	0.03% - 2.59%	0.05% - 0.91%
Derivative Liability Expected Dividends	None	None
Derivative Liability Forfeiture Rate	0.00%	0.00%

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(6) Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Details) (USD $)	Mar. 31, 2014
Details
Operating Leases, Future Minimum Payments, Due in Two Years	$ 480,882
Operating Leases, Future Minimum Payments, Due in Three Years	485,129
Operating Leases, Future Minimum Payments, Due in Four Years	152,457
Operating Leases, Future Minimum Payments, Due Thereafter	$ 1,118,468

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(3) Property and Equipment: Schedule of Other Assets, Noncurrent (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Other Assets, Noncurrent

		March 31,		March 31,
		2014		2013
Office equipment	$	61,611	$	40,921
Computer software		24,167		14,192
Transportation equipment under construction		621,802		354,557
		707,580		409,670
Less: accumulated depreciation		(23,173)		(15,881)
	$	684,407	$	393,789

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(2) Summary of Significant Accounting Policies: Fair Value of Financial Instruments: Fair Value, Assets Measured on Recurring Basis (Details) (USD $)	Mar. 31, 2014
Derivative Liability, Fair Value, Gross Asset	$ 1,138,477
Fair Value, Inputs, Level 2
Derivative Liability, Fair Value, Gross Asset	$ 1,138,477

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(2) Summary of Significant Accounting Policies: Going Concern (Policies)

12 Months Ended

Mar. 31, 2014

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 $13,052,020 and $6,766,091 for the years ended March 31, 2014 and 2013, respectively.  The Company also has an accumulated deficit of $31,627,643 and a negative working capital of $2,736,886 as of March 31, 2014, as well as outstanding convertible notes payable of $2,023,000, of which $1,750,000 is due on June 30, 2014.  Management believes that it will need additional equity or debt financing to be able to implement the 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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(2) Summary of Significant Accounting Policies: Intangible Assets (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Intangible Assets:

Intangible Assets:

Goodwill represents the excess of purchase price over tangible and intangible assets acquired, less liabilities assumed arising from the acquisition of Las Vegas Railway Express on January 21, 2010.  Goodwill is not amortized, but is reviewed for potential impairment on an annual basis at the reporting unit level.  As required by the “Intangibles – Goodwill and Other” topic of Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”), the Company conducted an analysis of the goodwill on March 31, 2014.  Due to the Company’s changes in the business model during the year ended March 31, 2014, management has determined the goodwill has been fully impaired as of March 31, 2014.  As a result, for the fiscal year ending March 31, 2014, the Company recorded an impairment loss of $843,697 in the accompanying statement of operations. 

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(2) Summary of Significant Accounting Policies: Basic and Diluted Loss Per Share (Details)	Mar. 31, 2014	Mar. 31, 2013	Mar. 31, 2012
Details
Options Outstanding	100,000	100,000
Share Issued for convertible debt	5,339,132	1,795,000
Warrants Outstanding	1,569,842	2,924,842	116,309

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(8) Equity: Schedule of Warrant Activity (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Warrant Activity

	Warrants
Outstanding - March 31, 2012	116,309
Granted	2,924,842
Exercised	(45,000)
Cancelled	(71,309)
Outstanding - March 31, 2013	2,924,842
Granted	1,541,000
Exercised	(20,350)
Cancelled	(2,875,650)
Outstanding - March 31, 2014	1,569,842

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STATEMENT OF STOCKHOLDERS' DEFICIT (USD $)	Common Stock	Subscriptions	Additional Paid in Capital	Accumulated Deficit	Total
Balance at Mar. 31, 2012	$ 243	$ 640,000	$ 9,976,609	$ (11,809,532)	$ (1,192,680)
Balance - Shares at Mar. 31, 2012	2,432,677
Stock issued from subscriptions payable	80	(640,000)	639,920
Stock issued from subscriptions payable - Shares	800,000
Stock issued for services	46		1,538,631		1,538,677
Stock issued for services - Shares	463,868
Stock issued for cash	228		2,281,772		2,282,000
Stock issued for cash - Shares	2,282,000
Stock issued for conversion of debt	168		2,055,938		2,056,106
Stock issued for conversion of debt - Shares	1,682,050
Exercise of warrants	5		8,995		9,000
Exercise of warrants - Shares	45,000
Discount on convertible notes payable			440,000		440,000
Warrant issued for services			1,201,370		1,201,370
Warrants issued for property and equipment			12,763		12,763
Stock Option Compensation			80,524		80,524
Net loss				(6,766,091)	(6,766,091)
Balance at Mar. 31, 2013	770		18,236,522	(18,575,623)	(338,331)
Balance - Shares at Mar. 31, 2013	7,705,595
Stock issued for services	73		644,467		644,540
Stock issued for services - Shares	728,143
Stock issued for cash	60		274,940		275,000
Stock issued for cash - Shares	600,000
Stock issued for conversion of debt	441		5,062,828		5,063,269
Stock issued for conversion of debt - Shares	4,410,747
Exercise of warrants	1		(1)
Exercise of warrants - Shares	9,823
Stock issued in exchange of warrants	259		594,783		595,042
Stock issued in exchange of warrants - shares	2,586,835
Warrant issued for services			329,416		329,416
Reclassification of derivative liabilities			4,302,990		4,302,990
Net loss				(13,052,020)	(13,052,020)
Balance at Mar. 31, 2014	$ 1,604		$ 29,445,945	$ (31,627,643)	$ (2,180,094)
Balance - Shares at Mar. 31, 2014	16,041,143

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(4) Notes Payable

12 Months Ended

Mar. 31, 2014

Notes

(4) Notes Payable:

(4)  Notes payable:

A summary of outstanding notes payable is as follows:

		March 31,		March 31,
		2014		2013
Secured promissory notes, dated May 17, 2011 through
May 17, 2012 to an investor bearing interest at 8% per annum,
payable on May 17, 2012.  The Company is in default on this note.	$	13,333	$	13,333
Total outstanding notes payable	$	13,333	$	13,333

As of March 31, 2014, the Company is in default on the above note payable for $13,333.  The Company has received a demand for payment on this note as of March 31, 2014.

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(5) Convertible Notes Payable: March 24, 2014 Iconic Note (Details) (Convertible Promissory Note, USD $)	1 Months Ended	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2014
Convertible Promissory Note
Promissory Note Maximum Amount	$ 165,000
Convertible Notes Payable, Current	$ 55,000	$ 55,000
Debt Instrument, Convertible, Stock Price Trigger		$ 0.50
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger		60.00%

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(12) Discontinued Operations: Schedule of Liabilities Classified As Discontinued Operations (Details) (USD $)	Mar. 31, 2013
Liabilities of Disposal Group, Including Discontinued Operation, Current	$ 194,041
Notes Payable Related Party
Liabilities of Disposal Group, Including Discontinued Operation, Current	$ 194,041

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(9) Share Based Compensation (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Grant of Stock Options Under Plan	1,000,000
Outstanding Employee Stock Options	100,000
Grant Date Market Price of Company's Stock	$ 10.00
Stock option compensation cost		$ 80,524

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(2) Summary of Significant Accounting Policies: Long-lived Assets (Policies)

12 Months Ended

Mar. 31, 2014

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. During the year ended March 31, 2014, the Company determined that $98,172 of capitalized costs relating to the construction of a proposed train station in North Las Vegas were impaired a result in the change in the Company’s business plan.  These amounts have been expensed and included as a component of professional fees during the year ended March 31, 2014. 

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(11) Related-party Transactions: Michael A Barron (Details) (USD $)	12 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Details
Promissory Note Balance Outstanding	$ 0	$ 124,301
Promissory Note Paid	124,301
Promissory Note Interest Paid	$ 27,272

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(6) Commitments and Contingencies: Schedule of Future Minimum Rental Payments for Operating Leases (Tables)

12 Months Ended

Mar. 31, 2014

Tables/Schedules

Schedule of Future Minimum Rental Payments for Operating Leases

Years ending March 31,
2015	$	480,882
2016		485,129
2017		152,457
Total	$	1,118,468

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(2) Summary of Significant Accounting Policies: Basis of Presentation (Policies)

12 Months Ended

Mar. 31, 2014

Policies

Basis of Presentation:

Basis of Presentation:

The accompanying financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). 

Effective on December 2, 2013, the Company executed a one-for-twenty reverse split of the Company’s issued and outstanding shares of common stock.  All references to number of shares and per share amounts included in this report give effect to the reverse stock split.