Sports drink company, BioSteel which is endorsed by NFL star QB Patrick Mahomes has recently filed for bankruptcy protection 14 years after its launch. As per CBC News, BioSteel is heading towards a period of “hibernation” after Ontario-based Canopy Growth ceased funding BioSteel Sports Nutrition Inc. which is burning $15,000,000 every month in operations.
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The company has also splurged a lot of money on its marketing as they have partnered with a wide range of athletes from the NBA, NHL, NFL, and other sports. Including Patrick Mahomes other NFL stars that partnered with BioSteel are Ezekiel Elliott, Jalen Ramsey, and DeAndre Hopkins. As part of its asset protection process, the company is also laying off 181 of its total staff of 190 employees.
Patrick Mahomes Endorsed BioSteel Files for Bankruptcy Protection
Patrick Mahomes has been a part of their team since 2020. The then-young gun of the NFL had signed a multiyear deal with the sports drink company after he won the first Super Bowl of his career. Fast forward three years and the company is seeking creditor protection after commencing proceedings under the Companies Creditors Arrangement Act (CCAA).
As per CBC News, the CCAA filing was undertaken because the company “no longer has access to funding for the brand, which continued to generate negative operating cash flow,” BioSteel said.
The company elaborated: “BioSteel made the decision to conserve cash and put the business into hibernation to preserve its assets. BioSteel sought creditor protection under the CCAA to conduct a court-supervised sale process for its business and property for the benefit of its stakeholders.”
The company is planning to reduce its effective strength from 190 to just a skeleton staff of nine operators, by laying off 181 employees. The company which boasts a starring team of multiple star athletes is now shrinking to the point they find a new buyer of the company.
BioSteel Is Burning $15,000,000 a Month
The company was founded by entrepreneur John Celenza and NFL player Mike Cammalleri in 2009 in Toronto, Canada. It witnessed a stark rise in popularity through bold marketing campaigns with big sporting leagues like the NBA, NFL, and NHL. 10 years after its launch BioSteel was taken over by Canopy Growth.
Canopy Growth since 2019 had spent a whopping sum of $366 million on BioSteel. The company uses around $15,000,000 in its operations every month. And despite booking $24 million in sales in the first quarter of 2023, BioSteel was reported to be responsible for 60 percent of financial losses this fiscal year.
The company still owes $12 million in sponsorship deals from October 2023 to March 2024. Subsequently, to protect the company from its creditors, BioSteel seeks protection under CCAA until they find another buyer.
