|1||Unique ground floor opportunity to own a network of wine railroad excursions in California.|
|2||Highly profitable. $1.1 million in revenue and $624,000 in profits for our first year of operations in 2018.|
|3||All female owned and operated business – X Wine Railroad|
|4||Reopening service in 2021 after service suspended due to Amtrak in 2019 and COVID 19 shutdown in 2020.|
|5||Raised $202,800 from Angel investors in 2018-2019.|
|6||Growth to four other wine regions with same operating plan for 2022-2025.|
I believe that the X Wine Railroad has the potential for great success. It offers its passengers a wonderful way to see the spectacular scenery of the wine country and to tour various California wineries and vineyards. Along the way, guests sample interesting wines and perfectly paired wine and food combinations. It is a wonderful way to spend the day with family and friends, and to travel by train in a fun, relaxing and stress-free environment
In addition, the operation is run by a very experienced management team with a track record of success in both private and public companies. I look forward to the first run of the X Wine Railroad in February.
In 2016 while working on our passenger rail project between Los Angeles and Las Vegas, we thought we needed a "practice train" for our servers on board a train to "practice " service food & drinks on a moving train. We launched the X Wine Railroad for this purpose and began operations of a wine excursion train between LA and Santa Barbara. We found people were willing to pay to ride an all day excursion. To our surprise, we kept raising the price from $249 per person to $369 for the day excursion. We sold out every trip. So, we decided this was a business and set out in earnest to make a go of it.
Our model was the operations of the Napa Valley Wine Train, a very successful train excursion on an 18 mile piece of track. They have revenue of $63 million per year. We rode the train and thought we could provide a better experience for wine & train lovers. We did.
We launched the X Wine Railroad service in February of 2017. It was an excursion along the California Coast from Los Angeles to Santa Barbara and then inland to Los Olivos, Southern California's hidden wine country. The service was instantly a hit and we sold out our cars. We one competitor on the route we were running, but they quickly folded shop after we introduced our service.
Then in early 2018, Amtrak's new management discontinued hauling private cars and halted our service. So, we weren't able to run in 2019. Then COVID hit and Amtrak stopped hauling trains altogether. We were out of business in 2020, until now.
Amtrak has started running trains again and we have reconfigured the service to use their equipment to carry our passengers. We are back in business after an 18 month pause. Our first re start run is scheduled for February 13, 2021 and is already sold out.
The X Wine Railroad, as the service is called, will re-introduce travelers to the Wine Country of Southern California via rail. Passengers will board at Union Station in Los Angeles and will travel by train to Santa Barbara. There they will be escorted by luxury tour vehicles to the Los Olivos region of the Santa Ynez Valley, home of some 200 wineries in the region. Travelers will spend several hours on a variety of tour activities such as winery tours and tastings, Old Town Los Olivos wine crawl, or perhaps just taking in the sights of this magnificent wine lovers destination.
With the COVID restrictions still in place in California, we are limited to groups of six together at each winery we visit. So, we have chartered four smaller tour busses with each carrying 12 people. That is compliant. When we get to the winery, we have arranged for two tables of six with appropriate social distance between the tables. All good. On the train, Amtrak already has social distance seating protocol, which we follow for our 50 riders. Again, all compliant. Ironically, having four different busses with 12 riders each allows us to broaden the wine experience as the groups are now small enough to allow us to visit many more smaller boutique wineries in the valley. So the experience is actually better, because of COVID.
Our management team is female dominated. Our President of Passenger Services and GM for the X Wine Railroad is Dianne David. She has extensive experience in the operations of passenger rail excursions, having introduced the X Wine Railroad to Southern California in 2017. She has built rail cars, supervised software booking engine development and sold the tickets on the excursions. She is a "ground up" railroader.
Our other female operations founder is Wanda Witoslawski, our CFO. Wanda has a 10 year career in the development of the X Train service slated for 2021 from LA to Las Vegas. She is the financial brains behind the X Wine Railroad and manages the retail purchases, financial cash flow, and profitability of the company. She works with Dianne David to manage the operations of the service.
With this crew of experienced women in rail, we feel we have a unique management team with a proven track record in passenger rail.
Our cars are the newest on the Pacific Surfliner line and are spacious and comfortable. There is a complimentary nosh box included in the ticket price as well as complimentary wine selections. Our customers are escorted to the upstairs compartment of our Business Class seating, which affords spectacular views of the California Coast on our way to Santa Barbara.
Once in Santa Barbara, our customers are headed out to the Santa Ynez Valley and the wineries of Los Olivos. We take you on a tour of some very special boutique wineries with restricted access that only the X Wine Railroad can procure. Spectacular views and fine wine sampling are in store with this unique wine journey.
The excursion of the X Wine Railroad from Los Angeles to Santa Barbara/Los Olivos is just the first step in our plan to create a network of Rail to Vine excursions in California. California has five wine regions and our Los Olivos journey is one of them. We intend to expand the service to serve all five regions and create the preeminent wine rail excursion network in the country.
Come join us in 2021 as we have scheduled 70 runs to wine country! www.xwinerailroad.com
X Wine Railroad has financial statements ending December 31 2019. Our cash in hand is $25,000, as of October 2020. Over the three months prior, revenues averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $28,000/month.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.
We conduct wine train excursions between LA and Santa Barbara.
In 5 years, we hope to be achieving operating revenues of $50 million annually. These projections are not guaranteed.
Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future, if any.
United Rail (dba X Wine Railroad) was incorporated in the State of Nevada in July 2017.
In March 2019, United Rail Inc, a public company and separate entity from United Rail, acquired the X Wine Railroad project for $500,000 from Las Vegas Xpress Inc.
In December 2019, United Rail, a Nevada private corporation, acquired all rail projects, including the X Wine Railroad project, back from United Rail Inc. The consideration for this acquisition was assuming liabilities associated with the rail projects.
In September 2020, United Rail Inc formally changed its name to Green Vitality Investment Holdings Inc. The company is currently processing the name change and ticker symbol change via various appropriate and relevant authorities.
In November 2020, United Rail formally changed its name to X Wine Railroad. See Appendix E, attachment "X Wine Railroad Certificate of Amendment" for documentation.
X Wine Railroad (former United Rail) is not in any form associated with Green Vitality Investment Holdings Inc. (former United Rail, Inc.)
Since then, we have:
Historical Results of Operations
Our company was organized in July 2017 and has limited operations upon which prospective investors may base an evaluation of its performance.
Liquidity & Capital Resources
To-date, the company has been financed with $120,000 in equity and $79,200 in convertibles.
After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 3 months before we need to raise further capital.
We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.
We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 6 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.
Runway & Short/Mid Term Expenses
X Wine Railroad cash in hand is $25,000, as of October 2020. As of October 2020, we are also owed $349,573 from Maptelligent, Inc in Account Receivables.
Over the last three months, revenues have averaged $0/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $28,000/month, for an average burn rate of $28,000 per month. Our intent is to be profitable in 6 months.
In 2019 Amtrak issued a new policy which halted all haulage agreement and special car movements for private rail cars. Our service used private rail cars, which we leased from third parties. When Amtrak cut off operations, we were out of business along with many other companies across the country in the excursion business - thus, we reported $0 revenue for 2019, despite doing more than $1M in revenue in 2018.
By the beginning of 2020, we had reconfigured the business to its current configuration using existing Amtrak cars and just buying blocks of seats on their trains. We were prepared to reopen in May of 2020, however, the COVID 19 shutdown happened and Amtrak stopped running, so we could not implement our new plan. In September 2020, Amtrak announced it was running trains again and the social distancing protocol was now in place. This allowed us to plan the rail portion of the excursions. But we had missed the wine season at this point, so we decided to reopen in February 2021.
We have sold out our first run for February 13, 2021 and are now selling the 2/28 run and the others for the rest of the year. This capital raise allows us to hire the staff to re-launch the project.
Starting in February 2021, we hope to generate revenues of $40K, and in March and April of 2021, we hope to generate revenues of $160K per month, for a total of $360K by the end of April 2021. We expect expenses to total around $300K over this time period. Expenses consist of Amtrak ticket costs, bus leasing, lunch at the wineries, and personnel, plus a corporate overheard per month.
Going forward from there, we hope to achieve revenues of $160K per month on average (8 runs per month). This is beyond our break-even point, which is $80K per month (4 runs per month).
We need around $250K in funding to cover mobilization costs and the cover of costs during the ramp up period. If we don't reach this through Wefunder, we will raise capital from our private investor community who have already put in some money and may participate in the Wefunder financing. Throughout the Wefunder raise, we will fund operations in the short-term through our current cash on hand as well as self-financing.
If the Pacific Surfliner ceases to run trains, we could lose the business opportunity. This appears unlikely.
Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.
The company is dependent upon its management team. If any one of the three principals were to leave the company, it could have an adverse effect on the business continuing.
External forces such as the recent COVID 19 pandemic, if it was to return, it could cause a shutdown in the Pacific Surfliner service. This would halt our sales and ability to operate the business.
There could be a drop in demand to ride the train due to an imposed lockdown of activity in Southern California which would preclude us from selling tickets.
We could have a pushback on the ticket price causing us to lower our price to attract customers. A dramatic price reduction could cause the train excursion to not be sustainable.
Temporary Rule 201(z(2) provides temporary relief from certain financial information requirements by allowing issuers to omit the financial statements required by Rule 201(t) in the initial Form C filed with the Commission. This offering has commenced in reliance of Temporary Rule 201(z)(2)
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