Orange 21 Inc. confirmed that an independent special committee of its board of directors and No Fear Inc. have mutually agreed to terminate discussions regarding a potential strategic transaction involving the acquisition of No Fear Retail Stores, Inc., a subsidiary of No Fear. Orange 21 had issued a press release on Thursday, July 19, 2007 confirming the existence of such preliminary discussions. The parties agreed that the timing and scope of the discussed transaction was not advisable for either company at the present time.
Mark Simo, the Co-Chairman of the Board and Chief Executive Officer of Orange 21, and a founder, principal and stockholder of No Fear, commented on the termination of the discussions as follows: “Although we explored several potential transaction structures, we ultimately concluded that it is not an ideal time for Orange 21 to pursue a strategic transaction, and that at present, our stockholders would be better served by us continuing to focus on our turn-around efforts. Accordingly, we terminated discussions and we are concentrating our efforts on internal improvements designed to continue to reinvigorate the brand, rejuvenating our revenue growth initiatives and working towards returning to profitability as soon as possible. I am excited about the opportunities that I believe are available for Orange 21, and I look forward to leading the efforts to make those opportunities a reality for our stockholders.”
John Pound, the Co-Chairman of the Board and the Chairman of the Special Committee, commented: “On behalf of the Board and the Special Committee, we are grateful to No Fear for engaging in the discussions about a potential strategic transaction and whole-heartedly agree that a transaction does not make sense at this time. I also want to add that although we did not identify a transaction to move forward with at this time, we believe that the process was beneficial to us in several respects – it has helped us identify our short-term goals of focusing on organic growth and has led to a stronger and deeper relationship between our Board and Mark as our Chief Executive Officer. We are very excited about Mark's commitment to growing the brand as our Chief Executive Officer and look forward to working with him on our turn-around efforts.”
