Orange 21 Inc. filed a Form 8-K with the SEC declaring the entrance into a Separation Agreement with Grant Guenther, VP of marketing. Under the terms of the agreement, the company and Mr. Guenther have agreed to continue Mr. Guenther’s employment to February 15, 2006, at which time Mr. Guenther’s employment will be terminated.

In return for executing a release of liability, he will receive three months of severance pay in the amount of $37,803 and may be offered a three-month consulting agreement with the company pursuant to which he would be paid at the rate of $13,601 per month. If the company elects not to enter into a consulting agreement at that time, Mr. Guenther will receive six months of severance pay in the amount of $78,606 in lieu of the $37,803 severance payment.