Vertical Branding OTC BB: VBDG

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Vertical BrandingOTC BB VBDG
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Safe Harbor Statements

• Forward-looking statements
• Certain statements in this presentation may
  contain forward-looking information within the
  meaning of Rule 175 under the Securities Act of
  1933 and Rule 3b-6 under the Securities Exchange
  Act of 1934, and are subject to the Safe Harbor
  created by those rules.  Other than statements of
  historical fact, any statements included in this
  presentation, including without limitation
  statements regarding potential future plans and
  objectives of the company, are forward-looking
  statements that involve risks and uncertainties
  that could cause actual results or events to
  differ materially from those anticipated in such
  statements.  Some of these risks, uncertainties
  and other factors are described in the Companys
  periodic filings with the Securities and Exchange
  Commission (available at www.sec.gov), such as
  the companys most recent Form 10-KSB filing and
  registration statement on Form
  S-1.  Forward-looking statements reflect present
  intentions and available information only, and
  many facts, circumstances or events could arise
  in the future that might prevent the achievement
  of any objectives, or the implementation of any
  strategically significant plan(s), outlined
  herein, or that might cause the company to
  reconsider such objectives or plans.  The company
  undertakes no obligation to publicly update or
  revise any statements in this presentation
  whether as a result of new information, future
  events or otherwise.
• Non-GAAP financial measures
• This presentation contains references to adjusted
  EBITDA, a non-GAAP financial measure, which
  management believes provides better insights into
  Company performance than GAAP metrics. Please
  consult the Companys SEC filings and press
  releases for reconciliations of EBITDA with GAAP
  measures.

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Who We Are

• Vertical Branding is a consumer products company
  selling high quality household, beauty and
  personal care products at affordable prices.
• The Company sells directly to consumers through
  television, Internet and print advertising as
  well as wholesale to many of the countrys
  largest retailers and drugstore chains, catalogs,
  home shopping channels and international
  distributors.
• The Companys hottest-selling products and brands
  currently include My Place, Steam Buddy, Hercules
  Hook, Zorbeez, EZ-FoldZ Step Stool and StarMaker
  Cosmetics.

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What youre about to hear
What is Unique Compelling about Vertical
Branding ? All About Our Products ? Our Marketing
Sales Approach ? Financial Information ? Managem
ent
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What is Unique Compelling about VBI

• Our Track Record demonstrated ability to
  develop and/or identify quality, high margin yet
  inexpensive products that appeal to a core
  demographic and high success rate bringing those
  products to market
• Our Products - New product introductions through
  a robust product pipeline, as well as line
  extensions on existing and future products, fuel
  growth while recurring sales from an
  ever-expanding product portfolio provides a
  stable base of revenues
• Our Advertising Strategy - Multi-media (TV,
  Internet, Print, Radio), ROI-based transactional
  advertising strategy that creates brand awareness
  and promotes retail sell-through while
  simultaneously generating revenues through direct
  response sales
• Continually Testing - Metric-driven testing of
  new products and marketing campaigns avoids large
  capital expenditure prior to market validation
• Strong year over year revenue growth
• Experienced, high caliber management.

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Its all about the Products

• Current Products
• ?
• Product Pipeline
• ?
• Product Development and Selection

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Current Product Overview
Vertical Brandings products make life easier
and/or more affordable by answering unique
consumer needs in innovative ways
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VBI Product Pipeline
Vertical Brandings track record of success
makes us attractive to inventors and license
holders as a potential home for their products

• Develop our own proprietary products and brands
• License products from third parties
• Dozens of potential new product opportunities
  reviewed every month submitted by inventors,
  vendors, manufacturers, trade shows, etc.

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Expertise in Product Development Selection

• Unique, top-quality, compelling value proposition
• Affordable price points (9.99 - 29.99)
• Resonate with core demographic (women 28 55)
• Potential to sell gt50 million households
• Each product gets rigorous in-house evaluation
  (financial, operational, quality assurance
  legal)

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Our Marketing and Sales Approach

• Creating and testing the campaign
• Transactional Marketing
• Retail Sales
• Deepening relationship with retailers as
  category captain and reliable source of popular
  products
• Catalog and Home Shopping Sales
• International Distribution
• Future trends and focus

Transactional Marketing Media generates revenues
on the front end while creating Brand Awareness
used to drive Retail Sales
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Creating Testing the Campaign
Transactional Marketing allows continual testing
and refinement of the marketing message and the
value proposition

• Television commercials, Internet marketing, and
  print advertising is created and tested
• Limited amount of media is purchased during
  testing phase
• Results are then analyzed, gauging response and
  profitability prior to national media rollout

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Transactional Marketing Highlights

• Simultaneously generates revenues and builds
  brands
• Transactional media net costs are a fraction of
  conventional brand/image advertising
• Immediate, lasting return on marketing investment
• Response is measurable
• Creation of a direct, lasting customer
  relationship
• Gives management sound basis for marketing
  tactics
• Enables metrics-based marketing and management

Brand advertisers now engaged in direct
marketing on TV and online PG GM Ford
TiVo Kodak Discover
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Retail Distribution Highlights

• Currently in 30,000 traditional retail outlets,
  growing to 40,000 by 2008
• Wal-Mart, Target, Costco, CVS, Bed, Bath
  Beyond, GNC, Kohls, Home Depot, Rite-Aid, Best
  Buy, Staples
• Net margins range from 30 to 34

As we continue to develop new products, our base
of retailer customers continues to grownew
retail accounts in 2008 include Staples, Office
Depot, Best Buy and Albertsons
My Place units prominently displayed at Bed Bath
Beyond
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Transactional/Retail Synergies

• Retail channel leverages prior investments in
  transactional and continuity marketing
• Retailers grant more and better display space for
  products that generate additional customer
  traffic
• Unit sales at retail are 3x - 5x better for
  products with strong transactional marketing
  track records

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Deepening Relationship with Retailers

• The acceptance of our products and our
  responsiveness has led to deepening relationships
  with many of our retail customers
• We have been named Category Captain by several
  major retail chains which gives us an opportunity
  to greatly expand our distribution to those
  stores with both our own products and third party
  products
• New product opportunities have arisen directly
  from retail buyers

The EZ-FoldZ Step Stool was brought to Vertical
Branding by a Wal-Mart buyer due to the retail
success of Hercules Hook and other products
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Category Captain VBI Partners with its Own
Retailer Customers
As category captain, VBI controls high-traffic
As Seen on TV end-cap shelf sections for
leading retailers, gains direct PoP data and new
product ideas, selects and merchandises its own
products and other manufacturers items

• Currently in 30,000 traditional retail outlets,
  growing to 40,000 in 2008
• Net margins 30 to 34 --
• Retail chains are bringing VBI new product
  opportunities
• New products gain entrée with new retailers
  (e.g., MyPlace made VBI category captain with
  Staples)

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Other Wholesale Channels
Vertical Brandings media exposure creates
tremendous appeal among transactional marketers
having multiple distribution channels helps fuel
our growth
Catalog ? Home Shopping Channels ? International
Distribution
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• Financial Information

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Financial Highlights

• FY 2007 revenues up 57 year over year, to 36.3
  million
• FY 07 adjusted EBITDA swung to 1.8 million from
  FY 06 equivalently calculated loss of (1.2
  million)
• Annual revenue run rate per employee approx.
  1.25 million
• Revenue guidance for 2008 47 million to 50
  million, 29 to 38 Y-o-Y growth

Since acquiring retail division in August 2006,
revenues, margins and profitability have shown
dramatic, sustained improvement
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Financial Highlights, continued
M I L L I O N S
Achieving the mid-point of 2008 revenue guidance
would result in a CAGR since 2005 of 81.6
2005
2006
2007
2008 E (midrange)
Revenues
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Selected Income Statement Data
Year-over-year gross margin decline reflects
2007 strategic shift into retail 2007 figures
include other charges of 1.1 million stemming
from Q2-Q3 non-performance by third-party
order fulfillment vendor may result in
restitution to VBI by bankruptcy court in
2008-2009
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Selected Balance Sheet Items
November, 2007 RENN Capital made a 4 million
equity investment in Vertical Branding, allowing
favorable restructuring of long-term debt
Excludes legacy commercial real estate
operations
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Corporate Snapshot
One possible thumbnail description of Vertical
Branding A mini- Procter Gamble
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Peer Company Comparisons
Vertical Branding is trading at
approximatelyone-third of its sales per share, a
significant discount to peer companies

• Vertical Brandings price-to-sales ratio is 0.34
  (4/25/08),
• low relative to other transactional marketing
  companies
• NutriSystem (NTRI) 0.83x
• More limited consumer base than Vertical
  Branding
• (specializes in diet products)
• Bare Escentuals (BARE) 4.03x
• Specializes exclusively in beauty products,
• less diversified than Vertical in distribution
  channels
• AeroGrow (AERO) 1.18x
• Highly specialized in indoor gardening
  products/supplies
• only two years of operations

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Management Team
The Companys management team has over 75 years
of combined experience, cumulative lifetime track
record of billions of dollars in sales

• Nancy Duitch Founder, Chief Executive Officer
  and Director
• Dan McCleerey Chief Financial Officer
• John Cammarano President, Retail Sales
• Chris Lipp Vice President and Corporate Counsel
• Evan Warshawsky Vice President, Strategic
  Development

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Investment Highlights
Vertical Branding has a rare combination of
track record, sustainable and scalable business
model and deep management expertise

• Strong track record of successfully selecting
  popular products and mass-marketing them through
  multiple sales channels
• Transactional marketing strategy road-tests
  products, builds brands, optimizes retail channel
  sell-through
• Margins and profitability trends improving
• Scalable business model leverages profits from
  successful mature products to support robust new
  product pipeline

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Vertical BrandingOTC BB VBDG
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Appendix GAAP Reconciliation
EBITDA is a non-GAAP financial measure which
management believes provides better insights into
Company performance than GAAP metrics. Please
consult the Companys SEC filings and press
releases for further discussion of Company
results as reflected by both EBITDA and GAAP
measures.