Vertical Branding

OTC BB: VBDG

VBDG.OB

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 Company’s periodic filings with the Securities and Exchange Commission (available at www.sec.gov), such as the company’s 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 Company’s SEC filings and press releases for reconciliations of EBITDA with GAAP measures.

VBDG.OB

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 country’s largest retailers and drugstore chains, catalogs, home shopping channels and international distributors.

The Company’s hottest-selling products and brands currently include My Place, Steam Buddy, Hercules Hook, Zorbeez, EZ-FoldZ Step Stool and StarMaker Cosmetics.

VBDG.OB

What you’re about to hear…

What is Unique & Compelling about Vertical Branding

All About Our Products

Our Marketing & Sales Approach

Financial Information

Management

VBDG.OB

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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Current Products

Product Pipeline

Product Development and Selection

It’s all about the Products…

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My PlaceTM Steam BuddyTM

Current Product Overview

Vertical

Branding’s

products make

life easier

and/or more

affordable by

answering

unique

consumer

needs in

innovative

ways

VBDG.OB

VBI Product Pipeline

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.

Vertical

Branding’s

track record

of success

makes us

attractive to

inventors and

license holders

as a potential

home for their

products

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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 >50 million households

Each product gets rigorous in-house evaluation (financial, operational, quality assurance & legal)

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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

Our Marketing and Sales Approach

Transactional

Marketing

Media

generates

revenues on

the “front end”

while creating

Brand

Awareness

used to drive

Retail Sales

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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

Creating & Testing the Campaign

Transactional

Marketing

allows

continual

testing and

refinement of

the marketing

message and

the value

proposition

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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

Transactional Marketing Highlights

“Brand”

advertisers

now engaged

in direct

marketing on

TV and online:

P&G

GM

Ford

TiVo

Kodak

Discover

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Currently in 30,000 traditional retail outlets, growing to 40,000 by 2008

Wal-Mart, Target, Costco, CVS, Bed, Bath & Beyond, GNC, Kohl’s, Home Depot, Rite-Aid, Best Buy, Staples

Net margins range from 30% to 34%

Retail Distribution Highlights

As we continue to develop new products, our base of retailer customers continues to grow…new 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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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

Transactional/Retail Synergies

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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

Deepening Relationship with Retailers

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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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)

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

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Catalog

Home Shopping Channels

International Distribution

Other Wholesale Channels

Vertical

Branding’s

media exposure

creates

tremendous

appeal among

transactional

marketers…

having multiple

distribution

channels helps

fuel our growth

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Financial Information

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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

Financial Highlights

Since acquiring

retail division in

August 2006,

revenues,

margins and

profitability

have shown

dramatic,

sustained

improvement

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Financial Highlights, continued

Achieving the

mid-point of

2008 revenue

guidance

would result

in a CAGR

since 2005 of

81.6%

8.1

23.1

36.4

48.5 E

0

10

20

30

40

50

60

$

MILLIONS

2005 2006 2007 2008 E(midrange)

112% CAGR

81.6% CAGR

Revenues

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Selected Income Statement Data

Twelve months ended December 31,

2006 2007 Change

Revenues $23.1 million $36.3 million +57%

Gross profit $13.4 million $19.8 million +47.9%

Gross margin * 58% 54.6%

Net income (loss) ** ($2.8 million) ($3.4 million) + $690 K

GAAP operating loss ** ($2.6 million) ($3.6 million) + $1.0 mm

Adjusted EBITDA ($1.1 million) $1.8 million + $3.0 mm

* 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

* Excludes legacy commercial real estate operations

November, 2007:

RENN Capital

made a $4

million equity

investment in

Vertical

Branding,

allowing

favorable

restructuring

of long-term

debt

(Dollars in thousands) Dec. 31, 2006 Dec. 31, 2007

Cash & Equivalents

$105

$30

Current Assets

$7,926

$8,089

Total Assets *

$17,737

$17,147

Current Liabilities

$7,291

$7,845

Long-term debt

$6,550

$4,451

Minority Voting Interest in Subs.

$580

$528

Shareholders’ Equity

$2,804

$4,323

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Corporate Snapshot

Corporate HQ Los Angeles, CA

Ticker Symbol VBDG

Exchange Traded OTC BB

Industry Consumer Products

No. of Employees 29

52-Week High/Low (as of 4/25/08) $0.85/$0.27

Shares Outstanding, Basic 30.0 million

Shares Outstanding, Fully Diluted 50.7 million

Market Capitalization $12.6 million

FY ‘07 Revenues $36.3 million

FY ‘07 Adjusted EBITDA $1.8 million

One possible

thumbnail

description of

Vertical

Branding:

A mini-

Procter &

Gamble …

VBDG.OB

Vertical Branding’s price-to-sales ratio is 0.34 (4/25/08),low relative to other transactional marketing companies:

NutriSystem (NTRI): 0.83xMore 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): 1.18xHighly specialized in indoor gardening products/supplies;only two years of operations

Peer Company Comparisons

Vertical

Branding

is trading at

approximately

one-third of

its sales per

share, a

significant

discount to

peer

companies …

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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

Management Team

The

Company’s

management

team has

over 75 years

of combined

experience,

cumulative

lifetime track

record of

billions of

dollars in

sales

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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

Investment Highlights

Vertical

Branding

has a rare

combination of

track record,

sustainable

and scalable

business

model and

deep

management

expertise

VBDG.OB

Vertical Branding

OTC BB: VBDG

VBDG.OB

Appendix – GAAP Reconciliation

(Dollars in thousands) Three months ended Twelve months ended December 31, December 31, 2007 2006 2007 2006

Net income (loss) for the period $ (3,781) $ 307 $ (3,447) $ (2,757) Interest expense, net 251 328 1,228 614 Provision for income taxes 1,021 46 1,047 53 Depreciation and amortization 314 240 1,240 561 Other charges 875 - 1,052 - Non-cash stock based compensation 136 96 570 218 Legal settlement 120 - 120 - Loss from discontinued operations - - 28 141

Adjusted EBITDA $ (1,064) $ 1,017 $ 1,838 $ (1,170)

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