Xyience Inc., the currently-bankrupt sponsors of Ultimate Fighting Championship and makers of Xenergy energy drink, will be able to continue operations after a Nevada judge approved the company’s request for a $1.6 million loan.
The Las Vegas Review-Journal reported that the loan will fund Xyience’s licensing and marketing agreement with UFC that allows them to use the UFC logo on Xenergy cans.
The Review-Journal said the fresh transfusion of cash will come from Zyen, a separate company owned by Xyience stakeholders and UFC co-owners Lorenzo and Frank Fertitta, and will allow the company to continue running until it can be sold for the benefit of its creditors.
The Review-Journal said Xyience attorney Laurel Davis expressed cautious optimism at the time of the decision, noting that one potential buyer for the company sat in the audience during the proceedings. Davis did not name the potential buyer.
Without the marketing agreement, Davis said, Xyience would be forced to discard $8 million of product already labeled with the UFC logo. Davis called the marketing agreement as a do or die matter for Xyience, the Review-Journal reported.
Some of the company’s creditors and stockholders opposed the agreement because they would unfairly benefit the Fertittas. The Fertittas control Zyen and Zuffa Marketing, the company that signed Xyience as a sponsor for UFC fights, the Review-Journal reported, but the judge saw no alternative that didn’t include shutting down the company.
Xyience suddenly fired a large portion of its approximately 70-member sales staff in November, and filed chapter 11 bankruptcy last month.