DETHRONE ROYALTY HOL (OTC:DRHC) Freshen Up
Sports celebrities are a modern day version of the Roman gladiators. Well, okay, there might be a few differences, but a lot of people are willing to accept this metaphor. That’s why huge companies pay sporting heroes millions of dollars so that they can appear on your TV screen for a few seconds saying that a certain product is great. DETHRONE ROYALTY HOL (OTC:DRHC) also know how much a football or a hockey star could contribute to brand awareness, but the crucial difference is that they this won’t affect DRHC‘s budget in any way.
That’s right, DRHC will be launching their new magical hybrid between an energy drink and a sports beverage in a few days’ time and there will be some big names in the field of sports that will come along and pose for the cameras. And they will do it for free. Well… almost.
About a year ago DRHC, who back then were dealing with professional cleaning of business buildings, signed a contract with Dethrone Royalty, Inc, a producer of MMA equipment, through which they acquired the license to use the name “Dethroned” for their energy drinks. The license is for a total of five years, but there is one condition – they must start generating quite a lot of revenue in quite a short period of time. The contract says that if they don’t reach the $3 million mark by March 2014, the agreement will be terminated. As you might have guessed by now, that’s quite a tall order considering the fact that the beverages aren’t even available on the market yet. That’s why, now that they are finally launching them, DRHC need all the public awareness they can get. This is where the football and hockey stars come in. But, as always, there’s a hitch – DRHC have no money to pay the sportspeople for their endorsement. Here’s a recap of the most important financials as found in their latest quarterly report that covers the three months ending in October 2012:
- total assets: $2,234
- total liabilities: $212 thousand
- no revenue since inception
- quarterly net loss: $145 thousand
So why would the celebrities be bothered to come along for the ceremony? Well, DRHC apparently convinced them that the beverage will be a big hit in the future. So big, in fact, that if the athletes have some DRHC shares, they will be able to make some decent money. The sportspeople were up for it apparently, and they received DRHC shares by the millions just so they can have their name associated with the Dethrone energy drink. The stock is restricted for the time being, but that doesn’t mean that there’s no dilution. With only $2 thousand worth of cash on hand, we expect that the crushing investors will become DRHC‘s favorite sport.
That will, no doubt, put off a lot of potential investors and if DRHC want to have some more credibility with them, they better change their corporate office since the one right now is a residential house somewhere in Arizona as seen from the picture. Then again, if they do change it, they will probably need to issue some more shares.
Staying clear of further paid promotions will also help them raise some trustworthiness. The latest pump that they were featured in took place in January. As you can see from the DRHC‘s chart, after gaining some ground, they crashed hard losing a whopping 66% of their value in just a couple of days.
Now that they are featured in a second promotion, this could happen once again very soon despite the fact that DRHC are finally ready with their amazing soft drink. That’s why we would advise investors to weigh the risks carefully before jumping in on the hype created by newsletters and celebrities.