EX-99.1 2 vert_ex991.htm PRESS RELEASE EXHIBIT 99

EXHIBIT 99.1

Vertical Branding, Inc. Provides Corporate Update

LOS ANGELES – October 13, 2009 — Vertical Branding, Inc. (VBDG.PK) provided a general corporate update today as well as an update to its May 11, 2009, announcement of an exclusive licensing agreement with P2F Holdings and related restructuring of company operations.  The company’s restructuring efforts have failed to achieve expectations or intended results and the company lacks sufficient cash flow to maintain normal operations and meet its current financial obligations.  The company’s Board is presently reviewing the company’s options for reorganization, recapitalization or other methods of deriving value from the company’s assets to satisfy the company’s liabilities.  Because of its working capital shortage, the company has substantially reduced operating expenses by laying off all but three employees and by suspending various operations.  

Vertical Branding’s update also included announcement of the resignation of Nancy Duitch as the Company’s Chief Executive Officer.  Ms. Duitch remains a member of the Board.

The company’s update further included summary unaudited financial results for the period ended June 30, 2009.

Information Regarding Forward-Looking Statements

The information in this news release includes forecasts and predictions about future results and events, or “forward-looking statements,” often identifiable by use of words like "anticipate", "believe", "estimate", "expect", "future", "intend", "plan" and similar expressions.  Such statements reflect the current view of Vertical Branding with respect to the matters discussed and are subject to and qualified by various risks, uncertainties, assumptions and other factors that could cause actual results or events to differ materially from those forecasted or predicted.    

(financial tables follow)





VERTICAL BRANDING, INC. AND SUBSIDIARIES

CONSOLIDATED UNAUDITED STATEMENTS OF OPERATIONS

(In thousands, except per share data)


 

 

For the Three Months Ended
June 30,

 

For the Six Months Ended
June 30,

 

 

 

2009

 

2008

 

2009

 

2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

     

 

 

     

 

 

     

 

 

     

 

 

 

Consumer products

 

$

1,290

 

$

9,404

 

$

5,301

 

$

17,525

 

Real estate activities

 

 

178

 

 

179

 

 

334

 

 

326

 

Total revenues

 

 

1,468

 

 

9,583

 

 

5,635

 

 

17,851

 

Cost of sales

 

 

1,304

 

 

5,030

 

 

3,962

 

 

8,440

 

Gross profit

 

 

164

 

 

4,553

 

 

1,673

 

 

9,411

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling

 

 

308

 

 

2,699

 

 

1,333

 

 

6,624

 

General and administrative

 

 

1,018

 

 

1,699

 

 

2,425

 

 

3,709

 

Depreciation and amortization

 

 

173

 

 

315

 

 

545

 

 

634

 

Total operating expenses

 

 

1,499

 

 

4,713

 

 

4,303

 

 

10,967

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(1,335

)

 

(160

)

 

(2,630

)

 

(1,556

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on sale of business

 

 

(1,673

)

 

—

 

 

(1,673

)

 

—

 

Interest expense, net

 

 

(244

)

 

(245

)

 

(506

)

 

(469

)

Loss from operations before provision for
income taxes and noncontrolling interest

 

 

(3,252

)

 

(405

)

 

(4,809

)

 

(2,025

)

Provision for income taxes

 

 

3

 

 

4

 

 

4

 

 

9

 

Loss before noncontrolling interest

 

 

(3,255

)

 

(409

)

 

(4,813

)

 

(2,034

)

Net loss attributable to noncontrolling interest

 

 

(21

)

 

(37

)

 

(62

)

 

(90

)

Net loss

 

 

(3,234

)

 

(372

)

 

(4,751

)

 

(1,944

)

Preferred stock dividends

 

 

44

 

 

46

 

 

88

 

 

91

 

Net loss applicable to common stockholders

 

$

(3,278

)

$

(418

)

$

(4,839

)

$

(2,035

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per common share

 

$

(0.11

)

$

(0.01

)

$

(0.16

)

$

(0.07

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares used in computation of
basic and diluted loss per common share

 

 

30,093

 

 

29,378

 

 

30,102

 

 

30,112

 







VERTICAL BRANDING, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED UNAUDITED BALANCE SHEETS

(In thousands)


 

 

June 30,
2009

 

December 31,
2008

 

Assets

     

 

                    

     

 

                    

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

95

 

$

221

 

Accounts receivable, net

 

 

743

 

 

4,141

 

Inventories

 

 

307

 

 

1,497

 

Other current assets

 

 

250

 

 

574

 

Total current assets

 

 

1,395

 

 

6,433

 

Office building, net

 

 

2,724

 

 

2,800

 

Intangible assets, net

 

 

—

 

 

1,519

 

Goodwill

 

 

1,231

 

 

1,842

 

Other assets

 

 

387

 

 

738

 

Total assets

 

$

5,737

 

$

13,332

 

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Deficiency

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Line of credit

 

$

194

 

$

3,981

 

Current portion of long-term debt

 

 

3,160

 

 

3,886

 

Accounts payable and accrued expenses

 

 

3,211

 

 

3,956

 

Deferred income

 

 

1,234

 

 

—

 

Total current liabilities

 

 

7,799

 

 

11,823

 

Long-term debt

 

 

2,764

 

 

1,700

 

Total liabilities

 

 

10,563

 

 

13,523

 

Shareholders' deficiency

 

 

(4,826

)

 

(191

)

Total liabilities and shareholders' deficiency

 

$

5,737

 

$

13,332

 









Contact:

Vertical Branding, Inc.

 

Investor Relations

 

818-926-4900

 

irelations@verticalbranding.com