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Troubled drink maker granted $1 million loan

Bankruptcy Judge Mike Nakagawa is expected to sign an order within a few days approving post-bankruptcy financing for Xyience Inc., a Las Vegas-based energy-drink maker.

Nakagawa held a hearing Wednesday and agreed to allow Zyen, a company controlled by the Fertitta family, to make a $1 million emergency loan. Zyen can increase the loan to $2.6 million in the hopes Xyience can be sold within 75 days.

Greg Garman, an attorney for Zyen, said he will prepare an order for the judge to consider signing. Zyen already has $12.5 million in unsecured claims against Xyience and a $5.3 million secured claim against the company.

The energy drink company's product, Xenergy, is a key sponsor for the Ultimate Fighting Championship, a mixed martial arts company owned by brothers Frank and Lorenzo Fertitta.


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  • The energy drink company is sold in 24,000 grocery and convenience stories around the country, president Omer Sattar said in an e-mail. However, Xyience has had difficulty in expanding the stores that carry its products while spending large amounts of money on advertising, Sattar said.

    The company signed a $15 million sponsorship contract with UFC for 2007. Other creditors include MTV Networks, the Travel Channel, MDK Motor Sports and Professional Bull Riders.

    Adam Frank of Las Vegas, who owns 4.45 million shares of Xyience stock, joined the company in June as interim general manager. At the same time, Kirk Sanford was named special adviser to management. Sanford last year resigned as CEO at Global Cash Access, a Las Vegas company that operates automated teller machines in casinos.

    "Employee morale is not good, and Xyience critics have emerged among the UFC community," Sattar said in a Jan. 18 statement filed with bankruptcy court. Several dissident shareholders complained during the bankruptcy court hearing Wednesday.

    Xyience also has been involved in disputes with founder and former CEO Russell Pike, whom Sattar accused of using strong-arm tactics to get payments.

    Pike was among those filing an involuntary bankruptcy case against Xyience early this month before the company filed a voluntary Chapter 11 petition for bankruptcy.

    Under Chapter 11, companies are allowed to reorganize so that they can settle claims from creditors and continue in business.

    Contact reporter John G. Edwards at jedwards@reviewjournal.com or (702) 383-0420.

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    Rich Bergeron wrote on February 05, 2008 07:18 PM: There's a great radio show on fightopinion.com that really takes a hard look at the Xyience situation. Check out the link below to learn more:

    http://www.youtube.com/watch?v=c5KQ7TIT6cw


    james corbet wrote on January 28, 2008 09:43 PM: Here is what should have been written in this article. Under Kirk Sanford’s and Adam Frank's management of Xyience Incorporated, there has not been a stockholder meeting for 19 months, even though Kirk Sanford and Adam Frank had repeatedly promised one. The un-elected board, which Sanford and Frank are members of, is in violation Nevada law.
    In October and November 2007, Kirk Sanford and Adam Frank, in violation of Navada law, three times ignored the request for full disclosure of corporate records by stockholders.
    In the end of May 2007, when Kirk Sanford and Adam Frank took over management and formed their “Xyience team,” May 2007 sales were $3.2 million, the last monthly sales figures for December 2007 were $160,000.00.
    When Kirk Sanford and Adam Frank took over management of Xyience, the May 2007 valuations of the company were from $200 million to $325 million, in Sanford’s and Frank’s January 18, 2008 bankruptcy filing the valuation of Xyience is negative $37 million.
    In May before Kirk Sanford and Adam Frank took over management of Xyience the shares authorized and outstanding were 60 million, now the figure is 200 million. Not one of these newly authorized shares was sold to raise capital for the company. All these shares, options and penny warrants went to Kirk Sanford, Adam Frank, the Fertittas and their “Xyience team."
    In the end of May 2007, when Bill Underhill was forced to resign as CEO by the un-elected board (i.e. Kirk Sanford, Adam Frank, Kathryn Lever and Michael Kurdziel), Underhill had procured equity financing for $25 million. The first act of Sanford and Frank was to preclude this financing, which stopped production, halted delivery to customers, lost most of the company’s major accounts and set the stage for the bankruptcy of Xyience by Sanford, Frank and their patsy Omer Sattar.


    Soup Nazi wrote on January 25, 2008 08:26 PM: All of you: No soup for you!


    Zeus wrote on January 25, 2008 10:59 AM: You young whippersnappers quit arguing or no ice cream before bed.


    DEVIL wrote on January 25, 2008 07:28 AM: God, this why you are losing control. Nobody understands WTF you are talking about.


    GOD wrote on January 25, 2008 05:57 AM: Oh goodie ... more money for them to embezzle or waste!!!