Vertical Branding

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Vertical Branding
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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. All statements of fact
  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. There can be no assurance that
  such statements will prove to be accurate and
  actual results and future events could differ
  materially from those anticipated in such
  statements. Events that may arise could prevent
  the implementation of any strategically
  significant plan(s) outlined herein. The Company
  cautions that these forward-looking statements
  are further qualified by other factors including,
  but not limited to, those set forth in the
  Companys Form 10-KSB filing, its registration
  statements and other filings with the United
  States Securities and Exchange Commission
  (available at www.sec.gov) 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
• Further, this presentation contains references to
  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

• Leading Consumer Products Company

• Selling unique, high quality products
• Through multiple distribution channels
• With strong revenue and earnings growth

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Key Strategy

• Sell products through multiple distribution
  channels
• Retail, Internet, QVC/HSN, Catalog, other Direct
  Response
• Firmly establish products in Retail channels
• Wal-Mart, Kohls, Target, Home Depot, Linen N
  Things, K-Mart, CVS, Rite-Aid, Bed Bath Beyond,
  others
• Utilize transactional advertising to
• Brand products
• Drive Retail sell-through

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Our Products

• Unique, high quality
• Value proposition affordable price points
• Resonate with core demographic
• Potential high volume
• Develop own products or obtain exclusive,
  worldwide marketing rights

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Product Overview
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Business Segments/Product Lines
25 Transactional

• Transactional Marketing Continuity Programs
• Hercules Hook
• Zorbeez
• Extreme Beam
• Hot Legs
• Invisilift
• Estimated Q1 2008

• Retail Distribution
• Hercules Hook
• Zorbeez Product Family
• - Zorbeez Retail Pack
• - Zorbeez Auto Shammy
• - Zorbeez Streek Freez
• - Zorbeez Micro Men
• Extreme Beam
• EZ Foldz
• StarMaker Product Line
• - Hollywood Hands
• - MicroPearlAbrasion
• - Pearl Anti-Wrinkle Mist
• DermaFresh Product Line
• - Microdermabrasion
• - Instant Wrinkle Be Gone Roll-OnTM

10 Continuity
65 Retail
Transactional
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Retail Distribution

• Currently in 30,000 traditional retail outlets,
  growing to 40,000 by 2008 due to new product
  categories being introduced
• Wal-Mart, Target, Costco, CVS, Bed, Bath
  Beyond, Linens n Things, GNC, Kohls, Home
  Depot, Rite-Aid
• Americas highest-volume catalog retailers
• Publishers Clearing House, Harriet Carter,Taylor
  Gifts
• Net margin ranges from 30 to 34
• Retail chains are bringing opportunities to VBI

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Transactional Marketing

• Simultaneously generates revenues and builds
  brands
• Transactional media costs a fraction of
  conventional brand/image advertising
• Immediate, lasting return on marketing investment
• Response is measurable
• Creation of a direct, lasting customer
  relationship
• Name brands now doing direct marketing on TV and
  on Internet
• Procter Gamble, GM, Ford, TiVo, Kodak,
  Discover

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Retail/Transactional Marketing

• Retail channel leverages investments in
  Transactional and Continuity Marketing
• Retailers grant more and better display space for
  Transactional products
• Unit sales at retail 3x - 5x better for products
  with Transactional track record

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Continuity Marketing

• Automatic re-orders, razor-razor blade model,
  lifetime supplies, etc.
• Leverages original product introduction and the
  Transactional Marketing investment
• Selling expenses approach zero
• Net margins can exceed 70
• Maximizing Continuity Marketing success is a
  management strategic priority

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Evolution of Business

• In 2006, acquired retail distribution segment
• Introduced one product Hercules Hook, with
  transactional marketing as primary revenue driver
• Reinvested profits from Hercules Hook into
  developing or acquiring other products
• In 2007, have established four top-selling
  branded products in the retail channel (10 other
  retail products)
• Now selling products through multiple channels,
  with emphasis on retail (transactional marketing
  being utilized to drive brand awareness and
  retail sell-through)

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Predictable Revenue Growth
Revenue model allows products in the
higher-expense Transactional phase (orange in the
diagram below) to be supported by high-margin
Continuity products (yellow) and Retail
Distribution products (green)
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Case StudyHercules Hook

• Initial TV launch  June 2006
• Media expenditure,
• June 2006 to January 2007 
• 3.7 million
• Transactional Revenues,
• June 2006 to January 2007 
• 7.6 million
• Retail Revenues generated,
• Q4 2006 to Q3 2007 
• 14.0 million
• Transactional ads generate sales while building
  brand

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Case StudyHercules Hook

• Product return rates are very low -- approx.
  3.6
• Free for life continuity program has over
  50,000 monthly customers
• Good Morning America
• A rating exposure
• Excellent retail penetration
• Potential evergreen product revenues continue
  to ramp up while media spending decreases

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Case StudyDirect to Retail

• Line of exclusive beauty products developed by
  entertainment industry actors and make-up artists
• Shipped 1.2 million in product to CVS, the
  national drugstore chain
• High profile store placements, alongside LOreal,
  Neutragena, Olay, Revlon and others
• Due to CVS success with product, now shipping to
  Rite-Aid
• Major public relations campaign

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Financial Highlights

• Q3 07 revenues up 72 year over year, to 9.1
  million
• TTM-09/30/07 up 196 over TTM-09/30/06
• TTM revenues per employee approx. 1.5 million
• TTM GAAP net income of 642,000 versus
  year-earlier 4.4 million net loss, a swing of
  5.0 million
• TTM EBITDA of 3.9 million from year-earlier
• 3.1 million loss, a swing of 7.0 million
• Q3-2007 Retail revenues up 373 year over year,
  to 5.7 million

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Revenues
Revenues in thousands
4 quarters ended September, 2007 2006
Note Reflecting retailing seasonality, Q4 and Q1
revenues are typically stronger than Q2 and Q3
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EBITDA
Adjusted EBITDA (loss) in thousands
Note Reflecting revenue seasonality, Q4 and Q1
adjusted EBITDA are typically stronger than Q2
and Q3
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Selected Balance Sheet Items
Excludes mortgage associated with commercial
real estate
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New Product Pipeline
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Targeted Milestones

• Expand on established base in retail business
• Successfully introduce 4-6 new products in 2008
• Expand Internet advertising initiative
• Develop international distribution into 40
  additional countries by end of 2008
• Bring call center in-house to reduce per-call
  costs and generate additional revenues and
  profitability
• Continue to build and leverage the experienced
  management team

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Our Management Team

• Nancy Duitch Founder, Chief Executive Officer
  and Director
• Alan H. Gerson President, Chief Operating
  Officer and Director
• Victor Brodsky Chief Financial Officer
• John Cammarano President, Retail Sales
• Chris Lipp Vice President and Corporate Counsel
• Evan Warshawksky Vice President, Strategic
  Development

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Corporate Snapshot
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Investment Highlights

• Strong track record of successfully selecting
  popular products and mass-marketing them through
  multiple sales channels
• Establishing products in Retail channels while
  driving brand awareness and retail sell-through
  with Transactional Marketing
• Improving margins and profitability trends
• P/S of 0.30 is low relative to transactional
  marketing companies NutriSystem, 0.96x Bare
  Escentuals, 4.60x AeroGrow, 2.90x
• Management team has 75 years of combined
  experience

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Vertical Branding