VOTING SECURITIES   And Principal Holders Thereof

 

The Board has authorized the close of business on August 15, 2018 as the record date (the "Record Date") for the determination of stockholders who are entitled to receive notice of the Corporate Action, this Information Statement, and vote on the Corporate Action ("Stockholders of Record").

 

As of the August 15, 2018, the Company's authorized capitalization consisted of 10,000,000,000 shares of Common Stock, of which 6,023,574,193 shares of Common Stock are issued and outstanding, par value $0.00001.  Each share of Common Stock entitles its holder to one vote on each matter submitted to the stockholders. The Majority Stockholder, holding 4,314,164,053 shares of Common Stock which represent 72% of the voting power of the outstanding capital stock of the Company, approved the Corporate Action by written consent on August 14, 2018.

 

Section 78.320 of the Nevada Revised Statutes (the "NRS") provides that the written consent of the holders of outstanding shares of voting capital stock having not less than the minimum number of votes which would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted can approve an action in lieu of conducting a special stockholder' meeting convened for the specific purpose of such action. The NRS and our Amended and Restated Bylaws, however, require that in the event an action is approved by written consent, a company must provide prompt notice of the taking of any corporate action without a meeting to the stockholders of record who have not consented in writing to such action and who, if the action had been taken at a meeting, would have been entitled to notice of the meeting if the record date for such meeting had been the date that written consents signed by a sufficient number of stockholders to take the action were delivered to a company.

 

This Information Statement is first being mailed on or about August ___, 2018, to our Stockholders of Record and is being delivered to inform the Stockholders of Record of the Corporate Action in accordance with Rule 14c-2 of the Exchange Act, the NRS and our Amended and Restated Bylaws. We are not aware of any substantial interest, direct or indirect, by security holders or otherwise, that is in opposition to matters of the actions taken.

 

The Company anticipates that the Corporate Action will become effective as soon as practicable but in no event will they become effective until at least 20 days after the date this Information Statement is first mailed to our stockholders pursuant to Rule 14c-2 of the Exchange Act.

 

The entire cost of furnishing this Information Statement will be borne by us. We will request brokerage houses, nominees, custodians, fiduciaries and other like parties to forward this Information Statement to the beneficial owners of our voting securities held of record by them and we will reimburse such persons for out-of-pocket expenses incurred in forwarding such material.

 

The holders of shares of Common Stock are not entitled to receive pro rata dividends at this time, when and if declared by the Board in its discretion, out of funds legally available therefore. The payment of any such dividends will depend on the Company's financial condition, results of operations, capital requirements and such other factors as the Board deems relevant.

 

The NRS does not provide for dissenter's rights or appraisal rights in connection with the Corporate Action nor have we provided for such rights in our Amended and Restated Articles of Incorporation or Amended and Restated Bylaws.

 

REVERSE STOCK SPLIT, NAME CHANGE AND   AMENDMENT TO OUR

RESTATED ARTICLES OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF THE COMMON STOCK OF THE COMPANY

 

On August 14, 2018, our Board unanimously approved the Corporate Action.

 

On the Record Date, there were 6,023,574,193 shares of our Common Stock issued and outstanding. Our Common Stock is our only class of voting securities outstanding. Each share of Common Stock has one vote per share on all matters submitted to a vote of our stockholders. Pursuant to Section 78.320 of the NRS, at least a majority of the voting capital stock of the Company, or at least 3,011,787,098 shares of Common Stock, is required to approve the Corporate Action by written consent.

The following table sets forth the name of the Majority Stockholder that approved the Corporate Action, the number of shares of Common Stock owned by the Majority Stockholder, the total number of shares approving the Corporate Action, and the percentage of the issued and outstanding voting equity of the Company approving the Corporate Action:

       

The Reverse Stock Split will be effective upon the filing of the Certificate with the Secretary of State of the State of Nevada and following the 10 day notice of this Reverse Stock Split with Financial Industry Regulatory Authority ("FINRA") under Rule 10b-17 promulgated by the Securities and Exchange Commission (the "SEC"). It is anticipated that the Reverse Stock Split will become effective on the date that the Certificate with the Secretary of State of Nevada is accepted by the Secretary of State of the State of Nevada, which will be no earlier than the twentieth (20th) day following the date on which this Information Statement is mailed to the Stockholders of Record (the "Effective Time").

 

Although the Corporate Action been approved by the holder of the requisite majority of the shares of Common Stock of the Company, the Board reserves the right, in its discretion, to abandon the Corporate Action prior to the proposed Effective Time if it determines that abandonment is in the best interests of the Company or the stockholders. Factors that may lead the Board to abandon the Corporate Action  may include, among other things, increased transaction costs to consummate the transaction, changes in the current economic environment, and an adverse response from the markets in which the Company operates or adverse responses from our stockholders. If such a determination to abandon the Corporate Action is made by the Board, our stockholders will be notified through the filing of a Current Report with the SEC on Form 8-K.

 

Reasons for the Reverse Stock Split

 

As of August 15, 2018, the Company had a total of 6,023,574,193 of its 10,000,000,000 authorized shares of Common Stock issued and outstanding, 3,248,234,280 shares reserved for convertible notes, leaving less than 728,191,527 shares of Common Stock available for issuance. The Board has considered the following two methods to provide for additional authorized shares of Common Stock: (i) to hold an annual meeting to approve a name change and (ii) to approve a reverse stock split which would make available adequate shares. The Board believes the latter method is more practical to execute. Therefore, the Board has chosen the Corporate Action to increase the number of our available shares for future financings, capital raises and general corporate purposes.

 

The Board has determined the exchange ratio for the Reverse Stock Split, whereby 5,000 pre-reverse stock split shares of Common Stock outstanding immediately prior to the effectiveness of the Reverse Stock Split is automatically converted into one post-reverse stock split share of Common Stock, is in the best interest of the Company and its stockholders. In determining the range of Reverse Stock Split ratios, the Board considered numerous factors, including:

 

 

In evaluating the Reverse Stock Split, the Board also took into consideration negative factors associated with reverse stock splits in general. These factors include the negative perception of reverse stock splits held by some investors, analysts and other stock market participants, as well as the fact that the stock price of some companies that have effected reverse stock splits has subsequently declined back to pre-reverse stock split levels. The Board, however, determined that these negative factors were outweighed by the potential benefits.

 

Stockholders should recognize that if the Reverse Stock Split is effected, they will own a fewer number of shares than they currently own (a number equal to the number of shares owned immediately prior to the Reverse Stock Split divided by 5,000 with adjustments for fractional shares). While we expect that the Reverse Stock Split will result in an increase in the per share price of our Common Stock, the Reverse Stock Split may not increase the per share price of our Common Stock in proportion to the reduction in the number of shares of our Common Stock outstanding. It also may not result in a permanent increase in the per share price, which depends on many factors, including our performance, prospects and other factors that may be unrelated to the number of shares outstanding. The history of similar Reverse Stock Splits for companies in similar circumstances is varied.

 

Following the Reverse Stock Split the number of authorized but unissued shares of our Common Stock relative to the number of issued shares of our Common Stock will be increased. This increased number of authorized but unissued shares of our Common Stock could be issued by the Board without further stockholder approval, which could result in dilution to the holders of our Common Stock. The increased proportion of unissued authorized shares to issued shares could also, under certain circumstances, have an anti-takeover effect. For example, the issuance of a large block of Common Stock could dilute the ownership of a person seeking to effect a change in the composition of our Board of Directors or contemplating a tender offer or other transaction. The Reverse Stock Split is not being proposed in response to any effort of which the Company is aware to accumulate shares of Common Stock or obtain control of the Company.

 

The Board did not approve the Corporate Action in connection with any plans or proposals for a "going private transaction" within the meaning of Rule 13e-3 of the Exchange Act.

 

Based upon the foregoing factors, the Board has determined that the Reverse Stock Split will likely be in the best interests of the Company and its stockholders and approved the Reverse Stock Split.

 

Effects of the Reverse Stock Split

 

As of August 15, 2018, the Company had a total of 6,023,574,193 of its 10,000,000,000 authorized shares of Common Stock issued. The total number of authorized shares of Common Stock and the par value of our Common Stock will not change as a result of the Reverse Stock Split. However, the number of outstanding shares of Common Stock will be reduced and the number of shares of Common Stock available for issuance will be substantially increased. Immediately following the effectiveness of the Reverse Stock Split, each ten shares of Common Stock owned by a stockholder immediately prior to the Reverse Stock Split will automatically convert into one share of Common Stock after the Reverse Stock Split. The following chart reflects the changes in our capital structure following the Reverse Stock Split (without adjustments for fractional shares). 

      

The Reverse Stock Split will affect all of our common stockholders uniformly and will not immediately affect any stockholder's percentage ownership interests in the Company, except to the extent that the Reverse Stock Split results in any of our stockholders owning a fractional share. However, stockholders should recognize that they will own fewer numbers of shares than they presently own (a number equal approximately to the number of shares owned immediately prior to the filing of the Certificate divided by 10 with adjustments for fractional shares). The Reverse Stock Split will have the effect of substantially increasing the number of shares the Company will be able to issue to new or existing stockholders, including holders of convertible securities, because the number of authorized shares will remain the same. This increased number of authorized but unissued shares of our Common Stock could be issued by the Board without further stockholder approval, which could result in dilution to the holders of our Common Stock.

 

Our Common Stock is currently registered under the Exchange Act, and we are subject to periodic reporting and other requirements of the Exchange Act. The Reverse Stock Split, if implemented, will not affect the registration of our Common Stock under the Exchange Act or our reporting or other requirements thereunder. However, it is anticipated that the CUSIP number for our Common Stock will change in connection with the Reverse Stock Split and will be reflected on new certificates issued by the Company and in electronic entry systems.

 

Effect of the   Reverse Stock Split   on   Options, Warrants, and Convertible or Exchangeable Securities

 

Proportionate adjustments will be made based on the ratio of the Reverse Stock Split to the per share exercise price and the number of shares issuable upon the exercise or conversion of all outstanding options, warrants, convertible or exchangeable securities entitling the holders to purchase, exchange for, or convert into, shares of Common Stock. This will result in approximately the same aggregate price being required to be paid under such options, warrants, convertible or exchangeable securities upon exercise, and approximately the same value of shares of Common Stock being delivered upon such exercise, exchange or conversion, immediately following the Reverse Stock Split as was the case immediately preceding the Reverse Stock Split.  The number of shares reserved for issuance pursuant to these securities will be proportionately based upon the ratio of the Reverse Stock Split, subject to the Company's treatment of fractional shares.

 

Potential Anti-Takeover Effects of the Reverse Stock Split

 

As a result of the Reverse Stock Split, the Company will have more authorized Common Stock which could be issued and dilute the voting power of the Common Stock held by the disinterested stockholders prior to the issuance. The effective increase in our authorized shares could potentially be used by management to thwart a take-over attempt. The over-all effects of this Reverse Stock Split might be to render it more difficult or discourage a merger, tender offer or proxy contest, or the assumption of control by a holder of a large block of the Company's securities and the removal of incumbent management. The Reverse Stock Split could make the accomplishment of a merger or similar transaction more difficult, even if, it is beneficial to stockholders. Management might use the additional shares to resist or frustrate a third-party transaction, favored by a majority of the independent stockholders, which would provide an above market premium, by issuing additional shares to frustrate the take-over effort.

The Reverse Stock Split is not the result of management's knowledge of an effort to accumulate the Company's securities or to obtain control of the Company by means of a merger, tender offer, solicitation or otherwise. Nor is the Reverse Stock Split a plan by management to adopt a series of amendments to the Company's Amended and Restated Articles of Incorporation or Amended and Restated Bylaws to institute an anti-takeover provision. The Company does not have any plans or proposals to adopt other provisions or enter into other arrangements that may have material anti-takeover consequences.

Rounding in Lieu of Issuing Fractional Shares

 

The Company will not issue fractional shares in connection with the Reverse Stock Split. Instead, the Reverse Stock Split shall be processed on a certificate-by-certificate basis, whereby, the Company will round up to the next whole share any stock certificate to the extent such stock certificate would be less than one whole share of Common Stock or greater as a result of the Reverse Stock Split.

 

Accounting Matters

 

The Reverse Stock Split will not affect the par value of our Common Stock. As a result, on the Effective Time of the Reverse Stock Split, the stated capital on our balance sheet attributable to our Common Stock will be reduced to less than the present amount, and the additional paid-in capital account shall be credited with the amount by which the stated capital is reduced. The per share net income or loss and net book value of our Common Stock will be increased because there will be fewer shares of our Common Stock outstanding.

 

Procedures   for Effecting the   Reverse Stock Split   and Filing the Certificate of Amendment

 

Our Board of Directors will file the Certificate with the Secretary of State of the State of Nevada to effect the Reverse Stock Split. The Reverse Stock Split will become effective as of date on which the Certificate is accepted by filing by the Secretary of State of the State of Nevada, which time on such date will be referred to as the "Effective Time." At the Effective Time, each ten shares of Common Stock issued and outstanding immediately prior to the Effective Time will automatically and without any further action on the part of our stockholders, be combined into and become one share of Common Stock, subject to the treatment for fractional shares described above, and each certificate which, immediately prior to the Effective Time represented pre-Reverse Stock Split shares, will be deemed cancelled and, for all corporate purposes, will be deemed to evidence ownership of post-reverse stock split shares.

 

The Reverse Stock Split will take place on the Effective Time without any action on the part of the holders of the Common Stock and without regard to current certificates representing shares of Common Stock being physically surrendered for certificates representing the number of shares of Common Stock that each stockholder is entitled to receive as a result of the Reverse Stock Split.

 

As soon as practicable after the Effective Time, we will send all stockholders of record a letter of transmittal (the "Transmittal Letter") to be used to transmit their Common Stock certificates to Action Stock Transfer Corporation, Inc. (the "Exchange Agent"). The Transmittal Letter will contain instructions on how a stockholder should surrender his, her or its certificate(s) representing shares of Common Stock (the "Old Certificates") to the Exchange Agent in exchange for certificates representing the appropriate number of whole shares of post-reverse stock split Common Stock (the "New Certificates") No New Certificates will be issued to a stockholder until such stockholder has surrendered such stockholder's outstanding certificate(s), together with the properly completed and executed letter of transmittal, to the Exchange Agent. From and after the Effective Time, any Old Certificates which are submitted for transfer, whether pursuant to a sale, other disposition or otherwise, will be exchanged for certificates representing post-reverse stock split shares. If an Old Certificate has a restrictive legend on the back of the Old Certificate(s), the New Certificate(s) will be issued with the same restrictive legends that are on the back of the Old Certificate(s). STOCKHOLDERS SHOULD NOT DESTROY ANY STOCK CERTIFICATE(S) AND SHOULD NOT SUBMIT ANY CERTIFICATE(S) UNTIL REQUESTED TO DO SO.

 

Beneficial Holders of Common Stock (i.e.,   stockholders who hold in street name)

 

Upon the Reverse Stock Split, the Company intends to treat shares held by stockholders in "street name", through a bank, broker or other nominee, in the same manner as stockholders whose shares are registered in their own names. Banks, brokers and other nominees will be instructed to process the Reverse Stock Split for their beneficial holders. These brokers, banks and other nominees may have other procedures for processing the transaction, however, and stockholders holding in street name are encouraged to ask their brokers, banks or other nominees any questions they may have regarding such procedures.

Certain U.S. Federal Income Tax Consequences

 

The following summary of certain material federal income tax consequences of the Reverse Stock Split does not purport to be a complete discussion of all of the possible federal income tax consequences and is included for general information only, is not intended as tax advice to any person and is not a comprehensive description of the tax consequences that may be relevant to each stockholder's own particular circumstances. Further, it does not address any state, local, foreign or other income tax consequences, nor does it address the tax consequences to stockholders that are subject to special tax rules, such as stockholders who are subject to the alternative minimum tax, banks, insurance companies, regulated investment companies, personal holding companies, stockholders who are not "United States persons" as defined in section 7701(a) (30) of the Code, broker-dealers and tax-exempt entities. This summary is based on the Code, the Treasury regulations thereunder and proposed regulations, court decisions and current administrative rulings and pronouncements of the IRS, all of which are subject to change, possibly with retroactive effect. This summary addresses only those stockholders who hold their pre-reverse stock split shares as "capital assets" as defined in the Code (generally, property held for investment), and will hold the post-reverse stock split shares as capital assets.

 

Holders of Common Stock are advised to consult their own tax advisers regarding the federal income tax consequences of the Reverse Stock Split in light of their personal circumstances and the consequences under state, local and foreign tax laws, and also as to any estate or gift tax considerations.

 

We are structuring the Reverse Stock Split in an effort to obtain the following consequences:

 

 

The above discussion is not intended or written to be used, and cannot be used by any person, for the purpose of avoiding U.S. federal tax penalties. It was written solely in connection with the proposed Reverse Stock Split of our Common Stock.

 

ACCORDINGLY, HOLDERS OF COMMON STOCK ARE ADVISED TO CONSULT THEIR OWN TAX ADVISERS REGARDING THE FEDERAL INCOME TAX CONSEQUENCES OF THE   REVERSE STOCK SPLIT   IN LIGHT OF THEIR PERSONAL CIRCUMSTANCES AND THE CONSEQUENCES UNDER STATE, LOCAL AND FOREIGN TAX LAWS, AND ALSO AS TO ANY ESTATE OR GIFT TAX CONSIDERATIONS.

 

INTERESTS OF CERTAIN PERSONS IN THE ACTION

 

Certain of the Company's directors and executive officers have an interest in this transaction as a result of their ownership of shares of our Common Stock, as set forth in the section entitled "Security Ownership of Certain Beneficial Owners and Management" below. The interests of our directors and executive officers arise as a result of their respective ownership of shares of our Common Stock. Accordingly, we do not believe that our directors have interests in this transaction that are different from or greater than those of any other of our stockholders of the Company.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of the Record Date, information known to us relating to the beneficial ownership of these shares by:

 

(i)   each person who is the beneficial owner of more than 5% of the outstanding shares of voting securities;

(ii)  each director;

(iii) each executive officer; and

(iv) all executive officers and directors as a group.

 

We believe that all persons named in the table have sole voting and investment power with respect to all shares beneficially owned by them. Under securities laws, a person is considered to be the beneficial owner of securities he owns and that can be acquired by him within 60 days from August 15, 2018, upon the exercise of options, warrants, convertible securities or other understandings. We determine a beneficial owner's percentage ownership by assuming that options, warrants or convertible securities that are held by him, but not those held by any other person and which are exercisable within 60 days of August 15, 2018, have been exercised or converted.

 

DELIVERY OF DOCUMENTS TO SECURITY HOLDERS SHARING AN ADDRESS

 

Only one Information Statement is being delivered to multiple security holders sharing an address unless the Company has received contrary instructions from one or more of its security holders. The Company undertakes to deliver promptly upon written or oral request a separate copy of the Information Statement to a security holder at a shared address to which a single copy of the documents was delivered and provide instructions as to how a security holder can notify the Company that the security holder wishes to receive a separate copy of the Information Statement.

 

Security holders sharing an address and receiving a single copy may request to receive a separate Information Statement at X RAIL ENTERTAINMENT, INC., 9480 South Eastern Ave., Suite # 205 Las Vegas, Nevada 89123. Security holders sharing an address can request delivery of a single copy of the Information Statement if they are receiving multiple copies may also request to receive a separate Information Statement at X RAIL ENTERTAINMENT, INC., 9480 South Eastern Ave., Suite # 205 Las Vegas, Nevada 89123.

FORWARD-LOOKING STATEMENTS

 

This Information Statement may contain certain "forward-looking" statements (as that term is defined in the Private Securities Litigation Reform Act of 1995 or by the SEC in its rules, regulations and releases) representing our expectations or beliefs regarding our company. These forward-looking statements include, but are not limited to, statements concerning our operations, economic performance, financial condition, and prospects and opportunities. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend," "could," "estimate," "might," or "continue" or the negative or other variations thereof or comparable terminology are intended to identify forward looking statements. These statements, by their nature, involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors, including factors discussed in this and other of our filings with the SEC.

 

WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION

 

We are required to file annual, quarterly and special reports, and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms at 100 F Street, N.E, Washington, D.C. 20549. You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for more information on the operation of the public reference rooms. Copies of our SEC filings are also available to the public from the SEC's web site at www.sec.gov.

 

We will provide, upon request and without charge, to each stockholder receiving this Information Statement a copy of our filings with the SEC and other publicly available information. A copy of any public filing is also available, at no charge, by contacting X RAIL ENTERTAINMENT, INC., 9480 South Eastern Ave., Suite # 205 Las Vegas, Nevada 89123.

 

WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.   This Information Statement is provided to the holders of Common Stock of the Company   AS OF THE RECORD DATE   only for informational   purposes in connection with   Corporate Action   pursuant to and in accordance with Rule 14c-2 of the Exchange Act.   PLEASE READ THIS INFORMATION STATEMENT CAREFULLY.

 

 

Dated: August ___, 2018

 

 

By Order of the Board of Directors

 

 

 

 

 

EXHIBIT A

 

FORM OF   CERTIFICATE OF   AMENDMENT   TO THE AMENDED AND   RESTATED ARTICLES OF INCORPORATION

 

ATTACHMENT I

 

 

ARTICLES VI

 

The corporation shall continue to have authority to issue ten billion (10,000,000,000) shares of Common Stock at par value of $0.00001 per share.

 

Upon the effectiveness of this Certificate of Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada (the "Effective Time"), each 5,000 shares of Common Stock of the corporation issued and outstanding immediately prior to the Effective Time ("Old Common Stock") shall automatically be converted, without any action on the part of the holder thereof, into one share of fully paid and non-assessable Common Stock of the corporation (the "Reverse Stock Split").  Fractional shares, if any, will be rounded up to the next whole share.  The Reverse Stock Split shall occur whether or not the certificates representing shares of Old Common Stock are surrendered to the corporation or its transfer agent.   The par value of each share of Common Stock shall not be adjusted in connection with the Reverse Stock Split, and the number of shares of Common Stock the corporation is authorized to issue, as set forth in this Article VI, shall not be affected by the Reverse Stock Split.

Change the name of the Company from "X Rail Entertainment, Inc. to Las Vegas Xpress, Inc.

 

 

A-1

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