Orange 21 Responds to Thesis: No Plans to Sell

In response to the letter issued by Thesis Capital Management late last week, Orange 21 co-chairmen of the board, Mark Simo and John Pound,  sent a pair of letters, one to Thesis and the other to the company's “friends and constituents” saying that the company had no intention of selling, but rather looked to continue going forward with “organic value creation at an independent Orange 21.”

October 1, 2007 
To our friends and constituents: 
 
In recent weeks, there have been several rumors and stories 
suggesting the possibility of a change in direction for Spy 
Optic as a company. You may have heard or read about the 
possibility of a sale, a merger, an acquisition by Spy, and/or 
a change of strategic direction. 
 
We are taking this opportunity to write to you as the joint 
Chairmen of the company – and, as significant, long-term 
investors, who own, together, approximately 25% of Spy’s 
equity. We are writing to affirm our passion for the brand 
and the company, and, our belief that the future for Spy 
Optic is bright, as an independent, growing action sports 
and fashion brand in the optical and accessories arena. As 
we wind up our key summer season, we want to express our 
appreciation to everyone who has supported, and continues 
to support the brand, our customers, employees, dealers, 
athletes, and other friends. We are enthused for what has 
been accomplished in the past year, and equally enthused 
about what lies ahead of us. 
 
In late 2006, as you know, we commenced a turnaround 
initiative and began a new process to re-energize and grow 
Spy Optic. We believe we have made substantial progress 
since that time. We have simplified the business, cut costs, 
focused on core products, eliminated unnecessary and 
distracting diversification strategies, improved production 
efficiencies and lead times, re-focused marketing, rebuilt 
dealer confidence, and re-energized our core company team. 
We now look forward to new initiatives in 2008. We have a 
great renewed product line for next year that we believe is the 
best in the history of the company. We are committed to 
rolling out that product line and seeing Spy through what 
we expect to be an exciting evolution. We will report to you, 
of course, as that process unfolds. 
 
We want you to know that, as significant investors in the 
business, we are both committed to the company’s future, 
and we believe that there is substantial value to be created 
as an independent Spy for all of our constituents. At this 
time, our focus will be on that value creation process. We 
are committed to that path and enthused about the 
opportunities ahead. We look forward to our partnership 
with you as we move ahead to grow Spy in 2008. 
With best wishes, 
  
/s/ Mark Simo 
Mark Simo 
Chief Executive Officer and 
Co-Chairman of the Board of Directors 
/s/ John Pound 
John Pound 
Co-Chairman of the Board of Directors