-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RDj/EPGniUx3KvgzNZA2+cZvxEkI3BITKQo8tz4v2EfSLo80M5PuJmsjMq68/z0Q QSSWDeL3WeOcINTRUIHPLw== 0001005477-07-009824.txt : 20071123 0001005477-07-009824.hdr.sgml : 20071122 20071123172852 ACCESSION NUMBER: 0001005477-07-009824 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20071123 DATE AS OF CHANGE: 20071123 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: VERTICAL BRANDING, INC. CENTRAL INDEX KEY: 0001125532 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 133579974 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-81199 FILM NUMBER: 071265115 BUSINESS ADDRESS: STREET 1: 16000 VENTURA BLVD STREET 2: SUITE 301 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 310-575-0955 MAIL ADDRESS: STREET 1: 16000 VENTURA BLVD STREET 2: SUITE 301 CITY: ENCINO STATE: CA ZIP: 91436 FORMER COMPANY: FORMER CONFORMED NAME: MFC DEVELOPMENT CORP DATE OF NAME CHANGE: 20001002 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BFS US SPECIAL OPPORTUNITIES TRUST PLC CENTRAL INDEX KEY: 0001159050 IRS NUMBER: 000000000 STATE OF INCORPORATION: X0 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 8080 N CENTRAL EXPRESSWAY STREET 2: STE 210 LB 59 CITY: DALLAS STATE: TX ZIP: 75206 BUSINESS PHONE: 2148918294 MAIL ADDRESS: STREET 1: 8080 N CENTRAL EXPRESSWAY STREET 2: STE 210 LB 59 CITY: DALLAS STATE: TX ZIP: 75206 SC 13D 1 file001.txt SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Rule 13d-101 Under the Securities Exchange Act of 1934 (Amendment No. __)* Vertical Branding, Inc. - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 92534X109 - -------------------------------------------------------------------------------- (CUSIP Number) Russell Cleveland RENN Capital Group, Inc. 8080 N. Central Expressway, Suite 210, LB-59 Dallas, TX 75206 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) 11/13/2007 - -------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) - -------------------------------------------------------------------------------- If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. |_| NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). Page 1 of 4 Pages CUSIP No. 92534X109 - -------------------------------------------------------------------------------- (1) Names of reporting persons. US Special Opportunities Trust PLC - -------------------------------------------------------------------------------- (2) Check the appropriate box if a member of a group (see instructions) (a)|_| (b)|_| - -------------------------------------------------------------------------------- (3) SEC use only. - -------------------------------------------------------------------------------- (4) Source of funds (see instructions). WC - -------------------------------------------------------------------------------- (5) Check if disclosure of legal proceedings is required pursuant to Items |_| 2(d) or 2(e). - -------------------------------------------------------------------------------- (6) Citizenship or place of organization. England and Wales - -------------------------------------------------------------------------------- Number of shares beneficially owned by each reporting person with: (7) Sole voting power: 0 (8) Shared voting power: 2,500,000 (1) (9) Sole dispositive power: 0 (10) Shared dispositive power: 2,500,000 (2) - -------------------------------------------------------------------------------- (11) Aggregate amount beneficially owned by each reporting person. 2,500,000 (3) - -------------------------------------------------------------------------------- (12) Check if the aggregate amount in Row (11) excludes certain shares |_| (see instructions). - -------------------------------------------------------------------------------- (13) Percent of class represented by amount in Row (11). 8.0% - -------------------------------------------------------------------------------- (14) Type of reporting person (see instructions). OO - -------------------------------------------------------------------------------- - ---------- (1) RENN Capital Group is the investment manager to US Special Opportunity Trust PLC and may vote the shares on behalf of the fund pursuant to an investment advisory agreement. (2) RENN Capital Group is the investment manager to US Special Opportunity Trust PLC and may dispose of the shares on behalf of the fund pursuant to an investment advisory agreement. (3) Consists of 1,250,000 shares of common stock and 1,250,000 shares of common stock issuable upon the exercise of warrants. Page 2 of 4 Pages Item 1. Security and Issuer. This statement relates to the Common Stock ("Common Shares") of Vertical Branding, Inc. (the "Company" or "VBI"). The principal executive offices of the Company are located 16000 Ventura Blvd, Suite 301, Encino, California 91436 Item 2. Identity and Background. (a) US Special Opportunity Trust PLC (the "Fund") (b) 8080 N. Central Expressway, Suite 210, LB-59, Dallas, Texas 75206. (c) The Fund is a closed end fund traded on the London Stock Exchange. (d) N/A (e) N/A (f) England and Wales Item 3. Source and Amount of Funds or Other Consideration. The total amount of funds required by the Fund to acquire the securities reported herein was $750,000. The source of such funds was the working capital of the Fund. Item 4. Purpose of Transaction. The Fund acquired the Common Shares herein in the ordinary course of business for investment purposes. Robert Pearson, a senior vice president of RENN Capital Group, Inc., the Fund's investment adviser, serves on the Board of Directors of the Company. Persons associated with the Fund may participate in discussions with management or third parties in which they may suggest or take a position with respect to potential changes in the operations, management or capital structure of the Company as a means of enhancing shareholder value. Such suggestions or positions may relate to one or more of the transactions specified in clauses (a) through (j) of Item 4 of this Schedule 13D. Associates of the Fund will continue to assess the Company's business, financial condition, results of operations and prospects, general economic conditions, the securities markets in general and those for the Company's securities in particular, other developments and investment opportunities, as well as the Fund's investment objectives. Depending on such assessments, the Fund may acquire additional securities or may determine to sell or otherwise dispose of some or all of its holding of securities. Other than as described above, the Fund does not have any present plans or proposals which relate to or would result in any transaction, change, or event specified in clauses (a) through (j) of Item 4 of this Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) The Fund holds an aggregate of 2,500,000 shares of the Common Stock of the Company which is 8.0% of the outstanding shares of the Company. (b) The Fund shares voting and dispositive power over 2,500,000 shares of common stock with RENN Capital Group, Inc. ("RENN"), its investment adviser that does business at 8080 N. Central Expressway, Suite 210, LB-59, Dallas, Texas 75206. RENN is a registered investment adviser under the Investment Advisers Act of 1940 (the "Act"). The Securities and Exchange Commission (the "SEC") initiated an administrative proceeding against RENN relating to its advisory contract with a client. In the administrative proceeding, the SEC found that, under the advisory contract, RENN willfully violated Section 205(a) of the Act, which prohibits an investment adviser from entering into an advisory contract with a BDC that provides for performance-based compensation, unless the contract provides for performance-based compensation that does not exceed 20% of the realized capital gains upon the funds of the BDC over a specified period or as of definitive dates. The SEC found that, pursuant to the advisory contract, for the fiscal years 1996 through 2003, RENN received performance-based compensation greater than that permitted under Section 205(B)(3) of the Act. Pursuant to an administrative proceeding, on December 1, 2005, the SEC ordered that, among other things, RENN (i) cease and desist from committing any violations of Section 205(a) of the Act and Sections 34(b) and 20(a) of the Investment Company Act and Rule 20a-1 thereunder; ii) pay disgorgement fees in the amount of $2,851,362 plus prejudgment interest of $924,509; and (iii) within ten days of the final disgorgement payment, pay a civil money penalty in the amount of $100,000. Without admitting or denying the SEC's allegations, RENN consented to the entry of an order instituting administrative and cease-and-desist proceedings, making findings, and imposing remedial sanctions and a cease and desist order imposing the penalties and sanctions set forth therein. (c) None (d) None (e) N/A Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. N/A Item 7. Material to be Filed as Exhibits. N/A Page 3 of 4 Pages After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. US Special Opportunity Trust PLC Date: 11/23/2007 /s/ Russell Cleveland Name: Russell Cleveland Title: President, RENN Capital Group, Inc., Investment Adviser The original statement shall be signed by each person on whose behalf the statement is filed or his authorized representative. If the statement is signed on behalf of a person by his authorized representative (other than an executive officer or general partner of the filing person), evidence of the representative's authority to sign on behalf of such person shall be filed with the statement: Provided, however, That a power of attorney for this purpose which is already on file with the Commission may be incorporated by reference. The name and any title of each person who signs the statement shall be typed or printed beneath his signature. ATTENTION--Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. 1001). (Secs. 13(d), 13(g), 14(d), 23, 48 Stat. 894, 895, 901; sec. 8, 49 Stat. 1379; sec. 203(a), 49 Stat. 704; sec. 10, 78 Stat. 88a; Secs. 2, 3, 82 Stat. 454, 455; secs. 1, 2, 3-5, 84 Stat. 1497; sec. 18, 89 Stat. 155; secs. 202, 203, 91 Stat. 1494, 1498, 1499; 15 U.S.C. 78m(d), 78m(g), 78n(d), 78w) [44 FR 2145, Jan. 9, 1979; 44 FR 11751, Mar. 2, 1979; 44 FR 70340, Dec. 6, 1979; 47 FR 11466, Mar. 16, 1982; 61 FR 49959, Sept. 24, 1996; 62 FR 35340, July 1, 1997; 63 FR 2867, Jan. 16, 1998; 63 FR 15287, Mar. 31, 1998] Page 4 of 4 Pages -----END PRIVACY-ENHANCED MESSAGE-----