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Sunglass Maker Orange 21 Backs Away From Purchase of No Fear

Orange 21 Inc., the maker of Spy Optic sunglasses, said it’s no longer in talks to purchase No Fear Inc.’s retail stores.

Both Carlsbad-based sportswear companies left the door open to a later deal, according to a report from Orange 21.

“The parties agreed that the timing and scope of the discussed transaction, given all the circumstances, was not advisable for either company at the present time,” said Orange 21 in a Sept. 21 report.

In July, Orange 21 disclosed it was in talks with No Fear about buying the latter’s 40 stores that sell clothing and accessories. No other information was disclosed.

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Beyond the obvious connections in product lines, the companies also share a common head honcho in Mark Simo, concurrently co-chairman and chief executive officer for Orange 21 and a founder, principal and stockholder of No Fear.

“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,” Simo said in a news release.

Orange 21 reported a net loss of $7 million on $42 million in revenue in 2006. For the six months of this year, the company reported a net loss of $3.3 million on revenue of $21.3 million.

No Fear is privately held, with annual sales around $9 million and 300 employees, according to manta.com, a financial data site.

Traded on Nasdaq under ORNG, Orange 21 shares closed at $4.46 on Sept. 24, and have ranged from $3.25 to $6.77 in the past 52 weeks.

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Accident Delays Aldila Tender Offer Deadline:

Aldila Inc., a Poway maker of golf shafts, extended a deadline for shareholders to respond to a Dutch auction tender offer to acquire its common stock to Sept. 28 because of a serious accident at its Chinese plant.

The company said the accident occurred Sept. 18 at its manufacturing plant in China.

Aldila said an explosion during routine maintenance caused the death of one employee and injured another. Damage was limited to the ground floor of a seven-story facility in an area that contained a refrigeration/storage unit, the company said.

Aldila said the plant managers have suspended operations until an investigation is completed by local authorities, but should resume in a short time. The incident shouldn’t have a material effect on the firm’s ability to fill orders or on its financial results, the company said.

In the auction for 497,000 shares, or about 9 percent of the total outstanding, Aldila was accepting bids from sellers in a price range from $15.10 to $16.85.

The company would determine the purchase price based on the number of shares tendered and price specified.

After falling from a high earlier this year above $19, Aldila, traded under ALDA on Nasdaq, has been rising and closed Sept. 24 at $16.61. Its prior 52-week range is $14.91 to $19.70.

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AMS And Buyer Still Squabbling:

Ten months after filing for bankruptcy, Advanced Marketing Services Inc. is still arguing about the details of its sale to competitor Baker & Taylor.

In a Delaware bankruptcy court filing Sept. 20 outlining the company’s plan to pay off its unsecured creditors, AMS said Baker & Taylor, a Charlotte, N.C., book wholesaler, still owes it money.

Specifically, AMS said Baker & Taylor owes $6.2 million on its agreed purchase price of $64 million arranged in February. AMS filed for bankruptcy Dec. 29.

The new agreement yet to be approved in court calls for Baker & Taylor to pay $6 million. But first, AMS has to pay $4.25 million that it owes to the business. So the net transaction will end with Baker & Taylor paying AMS $1.8 million.

Meanwhile, the proposed plan for unsecured creditors anticipates a pool of cash projected between $29 million and $36 million after all secured and higher-ranked creditors are paid off. That isn’t going to please unsecured creditors, who have claims of about $160 million against the company.

Main secured creditor Wells Fargo Foothill has already been paid.

AMS was once a thriving public company with sales of more than $800 million and 1,400 employees.

Founded in 1982, it distributed best sellers to large warehouse club stores, including Costco and Sam’s Club.

But in August 2003, agents from the Federal Bureau of Investigation raided the company and hauled away file cabinets of documents.

In subsequent months, the company said it had to restate past financial reports, and stopped filing quarterly financial reports with securities regulators.

Later, three executives pleaded guilty to felony fraud charges in connection with a scheme retaining funds paid by publishers to market books, and applying the money to AMS’ revenues and earnings.

The three female executives pleaded guilty to fraud charges and were sentenced last year.

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InterAmerican Goes Public:

Inter & #173;American Acquisition Group Inc. calls itself “a blank check company,” meaning it acquires or merges with other businesses. In a document announcing its initial public offering last month, InterAmerican said it is focused on identifying a prospective target business in the manufacturing or services sectors in Mexico or other Latin American countries. But it said it could change its mind, look elsewhere or in other industry groups.

InterAmerican generated gross proceeds of $45.1 million in the IPO of 5.7 million shares priced at $8 per share, with Chardan Capital Markets LLC acting as the book running manager, and Maxim Group LLC acting as co-manager.

The company’s chairman and CEO is William Morro, while Richard Sinkin is the chief operating officer.

Shares of the firm, traded under IAQGU.OB, were at $8.20 on Sept. 24, giving it a market cap of $57 million.

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Lone Star Extends Deadline On Accredited:

Lone Star Funds, the Dallas private equity fund that agreed last month to a discounted tender of $11.75 per share for subprime lender Accredited Home Lenders Holding Co., extended the tender offer deadline to Oct. 5.

Lone Star said that as of Sept. 21, it had received tender offers from 19.1 million shares, representing 76 percent of the stock outstanding.

Lone Star and Accredited agreed to the new price Sept. 18, down from the original $15.10 offer in June. The change results in about a $90 million discount on an aggregate basis to $311 million.

Accredited’s stock is still rising and nearing the offer price. As of Sept. 24, it was at $11.68, up from $11.56 on the day after the company agreed to be sold for the reduced price.

Also, the firm’s stock, traded under LEND on Nasdaq, continues to garner action especially from large hedge funds.

According to a recent securities filing, Hedgehog, a fund in Connecticut, holds 1.7 million shares or 6.8 percent of the total shares outstanding.

The company’s largest shareholders, according to Yahoo Finance, are Silver Point Capital, with 10 percent; Stark Offshore Management LLC (an entity controlled by Staro Asset Management), with 8 percent; and Farallon Capital Management, with 7 percent.

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Alphatec Conducts Secondary Stock Offering:

Alphatec Holdings Inc., a Carlsbad maker of products used in spinal surgery, priced its offering of 8.8 million shares of common stock at $3.45 per share. Net proceeds, after commissions and expenses, will be about $28.5 million. The sole underwriter for the issue, Canaccord Adams Inc., exercised its option to buy up an additional 1.2 million shares Sept. 26.

Traded on Nasdaq under ATEC, shares closed Sept. 25 at $3.50, and have ranged from $2.77 to $6.75 in the past 52 weeks.

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Ticker Takes:

Qualcomm Inc. revised its guidance on earnings for its fourth quarter for the year ended Sept. 30 to above the high side to 52 or 53 cents per share because of increased shipments of chip sets. Revenues are expected between $2.15 billion and $2.25 billion for the quarter. Patriot Scientific Corp. named Clifford Flowers its new chief financial officer. SpaceDev Inc. said it entered into a partnership with OHB Technology Group, a German company with 1,100 employees. San Diego Gas & Electric Co., a unit of Sempra Energy, closed a public offering of $250 million in 30-year first mortgage bonds.


Send any news of locally based public companies to Mike Allen via e-mail at

mallen@sdbj.com

. He can be reached at (858) 277-6359.

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