Orange 21 Inc. has established an independent special committee of its board of directors to conduct preliminary discussions with No Fear Inc. regarding a possible strategic transaction involving the acquisition of No Fear Retail Stores, Inc., a subsidiary of No Fear, and certain limited related intellectual property rights. NFRS currently operates 40 stores in five states that sell apparel and accessories for the action sports and youth lifestyle markets primarily under the No Fear brand and leading third party brands including Spy Optic.
There is no binding agreement or any other binding obligation between Orange 21 and No Fear with respect to any potential transaction other than a customary non-disclosure agreement, and Orange 21 and No Fear have no obligation to continue to negotiate or to negotiate in good faith with respect to any such transaction. Any binding agreement will be set forth in one or more separate definitive agreements signed by the parties. The discussions are at a stage where there can be no assurance that any such agreement will ever be reached.
Mark Simo, chairman and CEO of Orange 21, is also the founder, a director and a stockholder of No Fear. Mr. Simo is not representing Orange 21 in any discussions regarding the transaction and is not a member of the Special Committee. As a result of Mr. Simo's position, the board of directors of Orange 21 established the Special Committee comprised entirely of independent directors to evaluate and recommend a course of action with respect to the possible strategic transaction.
Orange 21 expects to seek the approval of its stockholders for any transaction with No Fear, should the Special Committee and No Fear agree to such a transaction. The Special Committee has engaged W.R. Hambrecht + Co to assist it in evaluating the potential transaction. No Fear has engaged Thomas Weisel Partners LLC to assist it in evaluating the potential transaction.
