Dethrone Royalty Holdings, Inc. (OTC:DRHC) Propped by a Penny Stocks VIP Pump
Energy drinks look like an enticing market despite the reign of several well-established names. Dethrone Royalty Holdings, Inc. (OTC:DRHC) is making a bid to enter than market. Does the company have what it takes to dethrone the competition, though?
Yesterday Penny Stocks VIP sent a round of promotional emails to subscribers, advertising the stock of DRHC. The pump was executed on a disclosed budget of $55 thousand and touts DRHC‘s undertaking to license for its beverages the Dethrone brand from Dethrone Royalty, Inc. – a separate company manufacturing MMA-oriented apparel, founded in 2009 by Nick Swinmurn of Zappos fame.
Looking at DHRC’s history, the company was known as Exclusive Building Services, Inc. until August 2012. Its wholly-owned subsidiary, TO Sports Innovation, was renamed to Dethrone Beverage, Inc. (DB). In April 2012 DB entered into a licensing agreement with the apparel maker, Dethrone Royalty, Inc., under which DB could use the established Dethrone brand name to produce and sell non-alcoholic drinks.
While it was still named Exclusive Building Services, Inc., the company announced a letter of intent for a merger with Dethrone Royalty, Inc. run by brothers Nick and Dan Swinmurn but that seems to have not gone through and DHRC ended up settling for a brand license deal instead. The deal spans a period of 5 years and can be terminated if DB fails to generate a minimum of $3 million in sales within 2 years.
The latest publicly available financial report from DHRC is dated October 2012 and contains the following numbers:
- $2,234 in cash
- zero revenue since inception
- $145 thousand quarterly net loss
DHRC announced it will be the sponsor of the Texas vs The Nation game in February, paying for that opportunity not in cash, which it simply doesn’t have as of now, but by giving purchase options for restricted common shares at a price of $0.00125 per share. The company also seeks the endorsement of several sports personalities who will be compensated in newly issued restricted shares.
It’s not entirely clear how the company intends to leverage its acquired branding license and generate sufficient sales figures to meet the license contract numbers, considering how short on cash DHRC is.
Penny Stocks VIP pumped other penny stocks and the aftermath of that was not too pretty to look at. Once their promotional coverage of 1st NRG Corp. (PINK:FNRC) was over, the stock kept sliding to a current position that is over 80% down from the time Penny Stocks VIP covered it.
Investors should be extra careful with promoted penny stocks as their price movement is largely speculative, as the very promotional disclaimers state.