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Las Vegas Railway Express Inc (OTCMKTS:XTRN) And X RAIL ENTERTAINME COM USD0.00001 (OTCMKTS:XREE): A Perfect Marriage

Las Vegas Railway Express Inc (OTCMKTS:XTRN) And X RAIL ENTERTAINME COM USD0.00001 (OTCMKTS:XREE): A Perfect Marriage
Written by
Jarrod Wesson
Published on
June 15, 2017
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The market recently got to know new information regarding the transaction between Las Vegas Railway Express Inc (XTRN), and X Rail Entertainment, Inc (XREE). The market did not react significantly to it, but the new info is very relevant for those who bought shares of XTRN. The most relevant item is that the Board of Directors of XTRN accepted the deal, and now recommends shareholders to tender their shares. We will tell you everything you need to know in this piece.Have a look at the recent price action. It seems that some market participants profited from the jump once the merger was announced. They then decided to sell some shares and book profits. Consequently, the share price took a hit.SourceThe transaction has not closed yet, thus applying the same logic we believe that when the merger closes, the share price may increase again. That is the reason that studying the merger makes a lot of sense right now.New InformationXTRN's Board accepts the dealOn May 31, 2017, it was put out that the Board of Directors of XTRN had decided to recommend the the tender offer from XREE for $20 million in cash and stock. "We believe this offer from X Rail Entertainment, Inc. is a good deal for our shareholders as it will bring much needed financial support to our company," said CEO Wayne Bailey.In the same press release, it was noted that XTRN saw how its shares went from trading at $3.0 to be exchanged for pennies due to convertible debt holders, who pushed down the price through massive selling. The company had to commence a collaboration with X Rail Entertainment, Inc., to remain in business. This merger seems to be the last step.Number of shares and how to exchange themIn addition, it marked the amount of shares that XTRN shareholders will receive; 5,714,285 shares of XREE. This means that each XTRN stockholder will receive "one share of XREE common stock for approximately every 300 shares of XTRN stock they hold." XREE needs to receive 60% of the total outstanding shares of XTRN. Additionally, "XTRN shareholders will be able to exchange their shares within 30 days of closing date which is May 31, 2017." Once the 60% is received, XTRN will receive "$20 million in cash and securities in exchange for 100% of the Company." Finally, the "cash amount is capped at $100,000 or less to pay for legal and accounting fees."XTRN will become a subsidiary of XREE, and its shares will trade after the merger. However, in our opinion, XTRN stockholders, who do not accept the tender with XREE, may face lack of liquidity after the transaction. Hence, we believe that accepting the offer may be the most logical move.Furthermore, on June 1, 2017, it was put out that XTRN will become a freight handling subsidiary named "Las Vegas Terminal Railway." CEO Michael Barron, explained in the following words:

"We have several freight operations which we can potentially take over on a site where we plan to construct our train station for the X Train. There is no train station in Las Vegas for a passenger service and with regular service now becoming a reality, the logistics of car movement, storage, repair and station management require us to get into the terminal switching business. The integration of the XTRN company and reconfiguring it as a freight operation is a perfect fit for us." Source

Finally, on June 1, 2017, several instructions were given in another press release for the shareholders interested in the merger. The most important is the following information:

"For shareholders whose stock certificates are held by a brokerage account for XTRN shares, you must instruct your brokerage account to return the shares to the transfer agent for cancellation. Thereafter, we will reissue the new XREE shares to you. For XTRN shareholders who do not wish to exchange their shares for shares in XREE: Simply do nothing. You may keep the XTRN shares you have." Source

ConclusionAs we expected, XTRN provided new information regarding its transaction with XREE. The fact that the Board of Directors accepted the deal is appreciated. If the Board of Directors asks shareholders to accept the deal, we recommend them to do so. In addition, new information was given about the amount of shares to be received, and how to exchange its shares. The transaction should be good for both companies, thus we expect the share price to increase once it closes. Hence, we encourage email subscribers to be alert on this name because the news could make the share price increase again. For more information about this deal, email subscribers can consult our coverage on XTRN.We will be updating our subscribers as soon as we know more. For the latest updates on XTRN, sign up below!Disclosure: We have NO position in XTRN or XREE and have NOT been compensated for this article.

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