Gatorz Inc.
TSX VENTURE : GTZ

Gatorz Inc.

September 23, 2009 14:28 ET

Gatorz Inc. Announces Details of Stage One of Business Combination with No Fear Retail Stores, Inc.

OAKVILLE, ONTARIO--(Marketwire - Sept. 23, 2009) - Gatorz Inc. ("Gatorz" or "Company") (TSX VENTURE:GTZ) is pleased to announce further particulars regarding its previously announced proposed business combination with No Fear Retail Stores, Inc. ("No Fear Retail"). On July 31, 2009, Gatorz and No Fear Retail executed a term sheet for a two stage business combination (the "Term Sheet"). The Term Sheet called for the parties to enter into agreements for the integration of certain operations and for the reciprocal exchange of stock, and the details of those agreements are summarized herein.

Details of Share Exchange Agreement

On August 25, 2009, Gatorz and No Fear Retail entered into a Share Exchange Agreement (the "Exchange Agreement") by which the Company is to acquire 2.25% of the issued and outstanding common shares of No Fear Retail and No Fear Retail is to acquire 17.5% of the issued and outstanding common shares of Gatorz. The Exchange Agreement provides that Gatorz will receive 900,000 shares of No Fear Retail at a deemed price of USD $2.08 per share and that No Fear Retail will receive 7,500,000 common shares of Gatorz at a deemed price of USD $0.25 per share. The Company anticipates that, subject to TSXV approval of the Exchange Agreement, the closing of the share exchange will occur on or about September 30, 2009. After the completion of the share exchange, and after the private placement previously announced on August 31, 2009, there will be 44,843,880 common shares of Gatorz issued and outstanding, of which current shareholders of Gatorz will own 37,343,880 (83.27%) and No Fear Retail shareholders will own 7,500,000 (16.72%).

The Exchange Agreement also provides for the election of a new director, designated by No Fear Retail, to the Company's board of directors and for the election of a new director, designated by the Company, to the board of directors of No Fear Retail. Until such time as the election is approved, the proposed directors shall have observer and advisory status on the elected board. It is anticipated that No Fear Retail will designate Boris Said to serve as a director of Gatorz and that Gatorz will designate Michael Dianna to serve as a director of No Fear Retail.

In the event, for whatever reason, the proposed business combination is not completed, Gatorz and No Fear Retail will transfer to the other party for no additional consideration half (50.0%) of the shares acquired under the Exchange Agreement.

Details of Shared Services Agreement

Also on August 25, 2009, the Company and No Fear Retail entered into a Shared Services Agreement (the "Services Agreement") under which No Fear Retail agreed to share its office and warehouse facilities with the Company and provide the Company with certain utilities and business services. The integration of the Company's physical operations into No Fear Retail, as provided in the Term Sheet and the Services Agreement, was completed September 8, 2009. Under the Services Agreement, the Company is to reimburse No Fear Retail, beginning January 1, 2010, for certain of the actual or allocable costs incurred by No Fear Retail in furnishing the agreed-upon utilities and business services. These cost reimbursements are less than the current costs for the same utilities and business services incurred by the Company prior to September 8. Except for these reimbursements, Gatorz is to pay no compensation to No Fear for these utilities and business services.

Gatorz anticipates that it will lower its overall operating costs as a result of its operational integration with No Fear Retail. While the Company anticipates savings will begin immediately, certain of the cost savings will not be reflected until the first quarter of 2010 because of existing obligations with Gatorz. The Services Agreement expires December 31, 2010, unless the parties agree to extend it.

About No Fear Retail

No Fear Retail Stores, Inc. (www.nofear.com) is a retailer of action sports and casual lifestyle apparel and accessories targeting young adults and teens. No Fear Retail sells a broad range of apparel and accessories, primarily under the No Fear and So Cal brands, including t-shirts, jackets, sweatshirts, jeans, walk shorts, board shorts, bags and watches. In addition to these proprietary brands, the company sells apparel and accessories consistent with its lifestyle focus from leading brands including FMF, Metal Mulisha, Spy Optic and SRH. No Fear Retail currently operates 53 retail stores in six states predominately in the south western United States, with a majority of stores in California. No Fear Retail, which is a privately-held California corporation, generated revenues of USD $40.2 million in its fiscal year ending August 2008. Mark Simo, CEO of No Fear Retail, founded and led the early growth of Orange 21, a NASDAQ listed company that designs, manufactures and distributes Spy Optic sunglasses. Mark possesses over 15 years of experience in the optical market and, in addition, was instrumental in establishing numerous iconic brands including, in addition to Spy Optic and No Fear, Bad Boy Club and Life's A Beach.

About Gatorz

Gatorz Inc. www.gatorz.com designs, manufactures, and distributes performance eyewear, including sunglasses crafted from 7075 billet aluminum and from acetate. Gatorz precision built aluminum eyewear is proudly made in the USA, offering superior craftsmanship, performance and durability. Gatorz proprietary technologies include the ability to customize the frame to the wearer's specific facial features. In addition, the Company's lens technology, TruRay Optics, offers a comprehensive assortment of ballistic impact-proof lenses which are 100% UV blocking, optically correct and distortion free. Gatorz distribution markets include motorcycling and other motorsports, skydiving, military, off-road, action sports, hunting & fishing, and others.

Gatorz products are proudly worn by premier athletes, such as race car drivers Marco and Michael Andretti, Kurt Busch and Sam Hornish Jr., top U.S bike builders and the famous Golden Knights parachute team.

Completion of the transaction is subject to a number of conditions, including but not limited to, TSXV acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon.

This document may contain forward-looking statements, relating to Gatorz's operations or to the environment in which it operates, which are based on its operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict and/or are beyond Gatorz's control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. Factors that may cause such differences include, but are not limited to, Gatorz's lack of operating profits, its dependence on key personnel, general economic conditions and other external events that may impact on consumer spending, competition from other companies. Consequently, readers should not place any undue reliance on such forward-looking statements. Gatorz disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The closing of the proposed transaction could be delayed if Gatorz is not able to obtain the necessary regulatory approvals on the timelines it has planned. The proposed transaction will not be completed at all if these approvals are not obtained or some other condition to the closings is not satisfied. Accordingly, there is a risk the proposed transaction will not be completed within the anticipated time or at all. Additional information identifying risks and uncertainties is contained in the Corporation's filings with the Canadian securities regulators, which filings are available at www.sedar.com.

This is not an offer for sale, or solicitation of an offer to buy, in the United States or to any U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended) of any equity shares or any other securities of the Corporation or Gatorz.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

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