Vertical Branding, Inc. (VBI), formerly MFC Development Corp., incorporated on May 18, 1990, is a consumer products branding, marketing and distribution company, with particular focus on the personal care, fitness, beauty and household product categories. The Company operates in four segments: direct to consumer transactional marketing; retail distribution; rental and development of commercial real estate, and other, which comprises corporate overhead and discontinued operations. The Company typically obtains the exclusive worldwide marketing, distribution and manufacturing rights to a particular product from its inventor, manufacturer or other business representative, and VBI develops the product brand through marketing campaigns that it creates and produces. The Company also internally develops its own branded products. As of March 2007, VBI owned the rights to 21 products, of which 12 were being marketed, and it had distribution and licensing rights for 15 products, of which nine were being marketed. Most of these products are beauty and houseware products. In July 2008, the Company announced that it created a new division, Econology Advantage, formed to identify, develop and market eco-friendly consumer products.
In March 2006, the Company sold the Hunter property to Mountaintrail at Hunter, LLC. On August 1, 2006, it purchased certain assets from Adsouth Partners, Inc. (Adsouth) comprising Adsouth’s consumer products division. The Company purchased rights to various consumer products and brands, as well as succession to Adsouth’s wholesale and retail distribution channels and relationships, which VBI refers to as its retail distribution business.
Transactional Marketing
The direct to consumer transactional marketing industry typically utilizes long form (infomercial) video productions, short-form commercials, print, live home shopping channels, Internet marketing, print, direct mail and radio advertising. The Company buys media through a media-buying agency specializing in short-form (two minute) or long-form (30 minutes) infomercials. VBI also purchases media on the Web directly or through agencies and the majority of orders come in directly via online systems. In addition, it maintains its own Websites for each product that is active, which are hosted and maintained by third-party Web services providers. The Company also sells products to domestic downstream business partners, such as HSN, QVC, catalogues and others (such as credit card billing insert marketers). Subsequent to the Company’s acquisition of its retail distribution business, VBI sells its products directly to the retail chains.
Retail Distribution
The Company’s list of products that are included in its retail distribution include the Dermafresh line of skin care product, PEARL Mist, the E70 brand, Hercules Hook, Extreme Beam, Pet Vac & D-Shed, Lip Solution, EZ Foldz and ZorbEEZ. The Dermafresh line of skin care product consists of five skin care products: Wrinkles be Gone, Eye Aid, Collagen Blanket, Roll on Collagen and Glycolic Blanket. PEARL Mist is one of the items in the Starmaker line, which is an anti wrinkle/ moisturizing mist. The E70 brand is a line of products created by Delmar, Inc., which utilize Delmar’s technology utilized in skin care formulations. Hercules Hook is a hook for hanging items on walls, for which in August 2006, VBI obtained an exclusive three year marketing and distribution rights agreement. The Company acquired and marketed Extreme Beam, which consists of two lines of flashlights branded as the Extreme Beam Flashlight and the Clip Light, from Adsouth Partners. Pet Vac & D-Shed are pet grooming products. Lip Solution is a lip-plumping product. EZ Foldz is a folding step stool. ZorbEEZ is a brand of super-absorbent, non-woven, microfiber chamois-like cloths for a variety of household uses.
Real Estate
VBI owns a 49% interest in Gateway Granby, LLC that owns and operates an office building in East Granby, Connecticut. The office building contains approximately 52,000 square feet of rentable space and is located on 7.7 developable acres. The Company has entered into an agreement whereby it has voting and operational control of Gateway Granby, LLC. VBI rents approximately 62% of the available office space to principal tenants under multi-year leases. The remaining 38% of the East Granby Property’s rentable space was vacant as of April 9, 2007. This rentable space has been subdivided into four smaller areas, which as of April 9, 2007, was available for leasing.
VBI competes with Guthy-Renker, Thane International, Inc., Sylmark, Inc., Tristar Products, Inc., The Proctor & Gamble Company, Johnson & Johnson and Revlon, Inc.
