Michael Barron is not giving up on his goal to build a railroad company. About a decade ago, Barron was determined to build a high-speed rail system toting passengers from Los Angeles to Las Vegas, but couldn't secure enough financing to make the "X Train" happen.
Barron has refocused resources into the railroad freight business, with his company Las Vegas Railway Express (OTCPK:XTRN) doing business as United Rail subsequent to the acquisition of United Rail in January.
In May, United Rail acquired a 49% interest in United Shortline Insurance Services, a Port Austin, MI– based provider of insurance and other products for short line railway businesses. As the name implies, short line railroads operates over relatively short distances.
There are more than 550 short line and regional railroads operating more than 50,000 miles of track in the U.S., according to the American Short Line and Regional Railroad Association.
Thursday morning, United Rail announced the acquisition of US Rail Holdings, a Toledo, Ohio-based short line operator providing services such as transloading, private industrial rail car switching, track maintenance services, rail car repair, and rail car storage.
The company leases and operates about 72 miles of track in the Kokomo, Indiana area, about 60 miles north of Indianapolis.
United Rail is paying $4.5 million for the company. Las Vegas Railway Express had a market capitalization of just $368,642 as of Wednesday's market close. No details were provided on payment terms.
As of June 30, 2018, regulatory filings show Las Vegas Railway Express to have just $49,635 in cash. In May, the company filed a Reg A with the SEC with plans to raise $5 million, although no details on whether or not any raise was successful followed.
The nanocap says this is just the first acquisition in a strategy that management intends to bring five short line railroads under the United Rail umbrella by the end of the year.
Investors aren't exactly sold on the deal, as measured by shares of XTRN eking up just $0.0001 to $0.0002 in Thursday trading. In fairness, it could be accurately said that the company's market cap has doubled to $737,284.
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