CARLSBAD, CA, Oct 07, 2010 (MARKETWIRE via COMTEX) --
Orange 21 Inc. (PINKSHEETS: ORNG), a leading designer, producer and
distributor of sunglasses, prescription eyewear, snow and motocross
goggles, and branded apparel and accessories for the action sports,
motorsports, snowsports and lifestyle markets, announced today that
effective October 5, 2010, its wholly owned subsidiary Orange 21
North America Inc. ("O21NA"), entered into a $1.0 million Promissory
Note with one of Orange 21 Inc.'s shareholders, Costa Brava
Partnership III, L.P. ("Costa Brava"). The Promissory Note is an
enlargement of the $3.0 million Promissory Note entered into with
Costa Brava in March 2010 to $4.0 million and has similar terms and
conditions. The Promissory Note is subordinated to O21NA's Loan and
Security Agreement with BFI Business Finance ("BFI"), pursuant to the
terms of a Debt Subordination Agreement, dated March 23, 2010 and
amended on October 4, 2010, by and between Costa Brava and BFI. The
proceeds from the Promissory Note are expected to be used for working
capital purposes and other corporate expenses.
Interest under the Promissory Note accrues daily at the following
rates from the date of receipt of funds under the Promissory Note at
(i) 9% per annum on the last day of each calendar month and (ii) 3%
per annum payable on the maturity date. In addition, the Promissory
Note requires that O21NA pays a facility fee of .61% of the original
principal amount on December 31, 2010 and the maturity date. The
Promissory Note matures on July 29, 2011. The terms of the Promissory
Note include customary representations and warranties, as well as
reporting and financial covenants, customary for financings of this
Seth Hamot, Orange 21 Inc.'s Chairman of the Board of Directors, is
the President and sole member of Roark, Rearden & Hamot, LLC, which
is the sole general partner of Costa Brava. Mr. Hamot commented, "We
are quite pleased to help our company grow. We believe Orange 21 and
its portfolio of brands have lots of opportunity in front of them,
and we look forward to being a part of that growth for a long time."
About Orange 21 Inc.
Orange 21 designs, develops, markets and
produces premium products for the action sports, motorsports,
snowsports and lifestyle markets under the brands Spy Optic(TM),
O'Neil(TM), Margaritaville(TM) and Melodies by MJB(TM).
Safe Harbor Statement
This press release contains forward-looking
statements. These statements relate to future events or future
financial performance and are subject to risks and uncertainties. In
some cases, you can identify forward-looking statements by
terminology such as "expect," "believe," or other comparable
terminology. These statements are only predictions. Actual events or
results may differ materially. Factors that could cause actual
results to differ from those contained in the forward-looking
statements include, but are not limited to: the general conditions of
the domestic and global economy; failure of the funds borrowed under
the promissory note to contribute to our growth; failure to
successfully benefit from market and business opportunities; the
possible exit of Mr. Hamot from our Board of Directors or Roark,
Rearden & Hamot, LLC; our outstanding indebtedness; our ability to
continue to develop, produce and introduce innovative new products in
a timely manner and other risks identified from time to time in our
filings made with the U.S. Securities and Exchange Commission.
Although, we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future
results. Moreover, we assume no responsibility for the accuracy or
completeness of such forward-looking statements and undertake no
obligation to update any of these forward-looking statements.
Orange 21 Inc.
A. Stone Douglass
Chief Executive Officer
SOURCE: Orange 21 Inc.