Mercato Partners announces first investment in skullcandy

SALT LAKE CITY, UT – December 21, 2007 – Mercato Partners, a growth equity investment
fund, announced its inaugural investment in Skullcandy, a lifestyle-driven consumer electronics
company. Mercato Partners is now Skullcandy’s largest institutional investor.  Individual
investors close to Skullcandy joined with Mercato in the $2 million Series B round financing.

“We are proud to participate and contribute to Skullcandy’s explosive growth. Skullcandy’s
quality line of headphones and progressive brand is quickly attracting both national and
international attention,” said Greg Warnock, one of Mercato’s Managing Directors. The capital
will be deployed to further develop sales channels and distribution networks, an area of expertise for Mercato and its list of exclusive partners. Alan Hall, one of Mercato’s Managing Directors, offers Skullcandy his unique expertise in expanding sales channels for technology and consumer
electronics companies.

Skullcandy CEO Rick Alden commented, “Money is important but what we are getting with
Mercato is the mindshare of Alan Hall and his experience taking products to market and Greg
Warnock’s corporate finance and board governance experience.”
Skullcandy is aggressively reaching out to customers through big box retailers, Best Buy, Circuit
City, Target, Zumiez and a growing list of specialty skate, surf and snowboard shops.  Under the
direction of CEO Rick Alden, Skullcandy has surpassed growth projections and is quickly
becoming one of the hottest consumer electronics brands in the marketplace.

ABOUT SKULLCANDY
Skullcandy was founded in 2003 by industry veteran Rick Alden, co-founder of National
Snowboard Inc. and organizer of some of snowboarding’s earliest promotional events. The
company has quickly cornered the market and today offers over 35 different products and 12
styles of headphones.  Skullcandy offers a wide variety of headphones, from ear bud models
(Smokin Buds) to full blown bass boosters (the Skullcrushers).  In addition, they supply a list of
companies with their Link system, integrating music and cell phone connections into helmets,
backpacks, and jackets. For more information about Skullcandy or its products visit
www.skullcandy.com.