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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File Number: 000-55181

Twinlab Consolidated Holdings, Inc.

(Exact name of registrant as specified in its charter)

Nevada	46-3951742
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

304 Indian Trace #438
Weston, Florida	33431
(Address of principal executive offices)	(Zip Code)

(561) 443-4301

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of common stock, par value $0.001, outstanding on October 16, 2025 was 259,092,833 shares.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans, objectives of management and expected market growth, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.

The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “target,” “potential,” “contemplate,” “goals,” “will,” “would,” “could,” “should,” “continue,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about our plans and ability to raise additional capital, including through equity offerings, debt financing, collaborations, strategic alliances, sales of assets, other merger and acquisition activities, or licensing arrangements; widespread health concerns; supply chain disruptions; the impact of inflation; consumer preferences; spending and debt levels; and the general economic and credit environment.

These forward-looking statements are only predictions and we may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements. You should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our business, financial condition and operating results. We have included important factors in the cautionary statements included and in “Part I, Item 1A - Risk Factors” included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 19, 2024 that could cause actual future results or events to differ materially from the forward-looking statements that we make.

You should read this Quarterly Report on Form 10-Q and the documents that we have filed as exhibits to this Quarterly Report on Form 10-Q with the understanding that our actual future results may be materially different from what we expect. We do not assume any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law.

Twinlab Consolidated Holdings, Inc.

Form 10-Q

		Page No.
PART I – FINANCIAL INFORMATION

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets (Unaudited)	1

	Condensed Consolidated Statements of Operations (Unaudited)	2

	Condensed Consolidated Statements of Stockholders’ Deficit (Unaudited)	3

	Condensed Consolidated Statements of Cash Flows (Unaudited)	4

	Notes to Condensed Consolidated Financial Statements (Unaudited)	5

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	25

PART II – OTHER INFORMATION		26

Item 1.	Legal Proceedings	26

Item 1A.	Risk Factors	26

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26

Item 3.	Defaults Upon Senior Securities	26

Item 4.	Mine Safety Disclosures	26

Item 5.	Other Information	26

Item 6.	Exhibits	27

	Signatures	28

PART I. – FINANCIAL INFORMATION

Item 1. Financial Statements

Twinlab Consolidated Holdings, Inc.

Condensed Consolidated Balance Sheets (unaudited)

(amounts in thousands, except share and per share data)

	September 30, 2024			December 31, 2023
ASSETS

Current assets:
Cash	$	14		$	19
Accounts receivable, net		1,843			1,911
Inventories, net		2,759			3,402
Prepaid expenses and other current assets		378			194
Current assets of discontinued operations		-			161
Total current assets		4,994			5,687


Property and equipment, net		1			9
Right-of-use assets		1,239			1,889
Intangible assets, net		120			120
Other assets		1,290			1,290

Total assets	$	7,644		$	8,995

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable	$	2,890		$	2,080
Lease liabilities		1,180			946
Accrued expenses and other current liabilities		2,632			2,052
Accrued interest		44,754			39,851
Notes payable and current portion of long-term debt		92,998			93,637
Current liabilities of discontinued operations		7,101			7,257
Total current liabilities		151,555			145,823


Long-term liabilities:
Lease liabilities		1,463			2,197
Total long-term liabilities		1,463			2,197

Total liabilities		153,018			148,020

Stockholders’ deficit:
Preferred stock, $0.001 par value, 500,000,000 shares authorized, no shares issued and outstanding		-			-
Common stock, $0.001 par value, 500,000,000 shares authorized, 393,898,884 and 393,898,884 shares issued, respectively		394			394
Additional paid-in capital		231,249			231,249
Stock subscriptions receivable		(30	)		(30	)
Treasury stock, 134,806,051 shares at cost		(500	)		(500	)
Accumulated deficit		(376,487	)		(370,138	)
Total stockholders’ deficit		(145,374	)		(139,025	)

Total liabilities and stockholders' deficit	$	7,644		$	8,995

The accompanying notes are an integral part of these condensed consolidated financial statements.

Twinlab Consolidated Holdings, Inc.

Condensed Consolidated Statements of Operations (unaudited)

(amounts in thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net sales	$	2,322		$	3,676		$	8,210		$	10,473
Cost of sales		1,680			2,345			5,500			6,475

Gross profit		642			1,331			2,710			3,998

Operating costs and expenses:
Selling expenses		126			342			344			933
General and administrative expenses		1,262			1,191			3,075			3,769

Loss from operations		(746)			(202	)		(709	)		(704	)

Other income (expense):
Interest expense, net		(1,962	)		(2,107	)		(5,923	)		(6,429	)
Other income (expense), net		-			(16	)		8			14

Total other expense, net		(1,962	)		(2,123	)		(5,915	)		(6,415	)

Loss before income taxes		(2,708	)		(2,325	)		(6,624	)		(7,119	)

Provision for income taxes		-			(25	)		(6	)		(32	)

Net loss from continuing operations		(2,708	)		(2,350	)		(6,630	)		(7,151	)
Net income (loss) from discontinued operations, net of income taxes		28			(3,014	)		279			(5,015)
Total net loss	$	(2,680	)	$	(5,364	)	$	(6,351	)	$	(12,166	)

Net loss from continuing operation per share of common stock
Basic earning per share		(0.01	)		(0.01	)		(0.03	)		(0.03	)
Diluted earning per share		(0.01	)		(0.01	)		(0.03	)		(0.03	)
Net loss from discontinued operation per share of common stock
Basic earning per share		0.00			(0.01	)		0.00			(0.01	)
Diluted earning per share		0.00			(0.01	)		0.00			(0.01	)
Weighted average number of common shares outstanding - basic		259,092,833			259,092,833			259,092,833			259,092,833
Net loss per common share - basic	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.05	)

Weighted average number of common shares outstanding - diluted		259,092,833			259,092,833			259,092,833			259,092,833
Net loss per common share - diluted
(See Note 2 - Summary of Significant Accounting Policies)	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.05	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Twinlab Consolidated Holdings, Inc.

Condensed Consolidated Statements of Stockholders’ Deficit (unaudited)

(amounts in thousands, except share and per share data)

	Common Stock				Additional Paid-in		Stock Subscriptions			Treasury Stock					Accumulated
	Shares		Amount		Capital		Receivable			Shares		Amount			Deficit			Total

Balance, December 31, 2022		393,898,884	$	394	$	231,249	$	(30	)		134,806,051	$	(500	)	$	(356,424	)	$	(125,311	)
Net loss		-		-		-		-			-		-			(2,810	)		(2,810	)
Balance, March 31, 2023		393,898,884		394		231,249		(30	)		134,806,051		(500	)		(359,234	)		(128,121	)
Net loss		-		-		-		-			-		-			(3,991	)		(3,991	)
Balance, June 30, 2023		393,898,884	$	394	$	231,249	$	(30	)		134,806,051	$	(500	)	$	(363,225	)	$	(132,112	)
Net loss		-		-		-		-			-		-			(5,364	)		(5,364	)
Balance, September 30, 2023		393,898,884	$	394	$	231,249	$	(30	)		134,806,051	$	(500	)	$	(368,589	)	$	(137,476	)

Balance, December 31, 2023		393,898,884		394		231,249		(30	)		134,806,051		(500	)		(370,138	)		(139,025	)
Net loss		-		-		-		-			-		-			(2,096	)		(2,096	)
Balance, March 31, 2024		393,898,884	$	394	$	231,249	$	(30	)		134,806,051	$	(500	)	$	(372,234	)	$	(141,121	)
Net loss		-		-		-		-			-		-			(1,573	)		(1,573	)
Balance, June 30, 2024		393,898,884	$	394	$	231,249	$	(30	)		134,806,051	$	(500	)	$	(373,807	)	$	(142,694	)
Net loss		-		-		-		-			-		-			(2,680	)		(2,680	)
Balance, September 30, 2024		393,898,884	$	394		231,249	$	(30	)		134,806,051	$	(500	)	$	(376,487	)	$	(145,374	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

Twinlab Consolidated Holdings, Inc.

Condensed Consolidated Statements of Cash Flows (unaudited)

(amounts in thousands)

	Nine Months Ended September 30,
	2024			2023
Cash flows from operating activities:
Net loss	$	(6,351	)	$	(12,166	)
Net (income) loss from discontinued operations		(279)			5,015
Net loss from continuing operations		(6,630	)		(7,151	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization		8			33
Amortization of right-to-use assets		423			600
Provision for obsolete inventories		90			(176)
Provision for losses on accounts receivable		(544	)		(449)
Loss on write down of right-of-use assets		285			-
Other non-cash items		-			(29	)
Changes in operating assets and liabilities:
Accounts receivable		612			764
Inventories		553			2,641
Prepaid expenses and other current assets		100			1,672
Other assets		-			(20	)
Accounts payable		810			(1,221	)
Lease liabilities		(558	)		(569	)
Accrued expenses and other current liabilities		5,485			5,121
Net cash provided by continuing operations		634			1,216
Net cash used in discontinued operations		-			1
Net cash provided by operating activities		634			1,217

Cash flows from financing activities:
Net repayment on revolving credit facility		(639	)		(2,033	)
Net cash used in financing activities		(639	)		(2,033	)

Net increase (decrease) in cash		(5)			(816	)
Cash at the beginning of the period		19			866

Cash at the end of the period	$	14		$	50

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	1,021		$	1,068

SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Acquisition of operating lease		58			-

The accompanying notes are an integral part of these condensed consolidated financial statements.

Twinlab Consolidated Holdings, Inc.

Notes to Condensed Consolidated Financial Statements (unaudited)

(amounts in thousands, except share and per share amounts)

Note 1 – Nature of Business

Nature of Business

Twinlab Consolidated Holdings, Inc. (the “Company”, “Twinlab,” “we,” “our” and “us”) was incorporated on October 24, 2013 under the laws of the State of Nevada as Mirror Me, Inc. On August 7, 2014, we amended our articles of incorporation and changed our name to Twinlab Consolidated Holdings, Inc.

We are an integrated marketer, distributor, and retailer of branded nutritional supplements and other natural products sold to and through domestic health and natural food stores, mass market retailers, specialty store retailers, on-line retailers, and websites. Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers.

Our products include vitamins, minerals, specialty supplements and sports nutrition products sold under the Twinlab® brand name, a market leader in the healthy aging and beauty from within categories sold under the Reserveage Nutrition and ResVitale® brand names; and diet and energy products sold under the Metabolife® brand name. To accommodate consumer preferences, our products come in various formulations and delivery forms, including capsules, tablets, softgels, chewables, liquids, sprays and powders. These products are sold primarily through health and natural food stores and on-line retailers, supermarkets, and mass-market retailers.

We also performed services between private label distributors and contract manufacturers under the NutraScience Labs (“NSL”) brand name. NSL facilitated the production of new supplements to market and reformulated existing products to include scientifically backed ingredients. We provided our customers with numerous production services, including manufacturing, testing, label and packaging design, order fulfillment, and regulatory compliance.

NSL facilitated the contract manufacture of a variety of high-quality vitamin and supplement products, including but not limited to, immune support supplements, cognitive support products, prebiotics and probiotics, supplements for weight management, and sports nutrition supplements. Our role in the production of these products was to help our customers manufacture or reformulate dietary supplements for sale and distribution. We did this by working with contract manufacturers to build scientifically backed formulas for resale to our end customers. We also simplified the production process by providing quality control checks, storing inventory on site, labeling and designing finished products, and drop shipping finished products ready for sale to our end customers. We did not market these private label products, but rather sold the products to the customer, who was then responsible for the marketing, distribution, and sale to retailers or to their end customers. The services performed under NSL ceased with the abandonment of operations that began in July 2023.

Going Concern

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. As of September 30, 2024, we had an accumulated deficit of $376,487. Historical losses are primarily attributable to lower than planned sales resulting from low fill rates on demand due to limitations of our working capital, delayed product introductions and postponed marketing activities, merger-related and other restructuring costs as well as the abandonment of operations of NSL, and interest and refinancing charges associated with our debt. Losses have been funded primarily through debt.

Because of our history of operating losses and significant interest expense on our debt, we have a working capital deficiency of $146,561 as of September 30, 2024. We also have $92,998 of debt, presented in current liabilities. These continuing conditions, among others, raise substantial doubt about our ability to continue as a going concern.

Management is addressing operating issues through the following actions: focusing on growing the core business and brands; continuing emphasis on major customers and key products; and continuing to negotiate lower prices from major suppliers. We will need to raise additional capital through debt, equity or the sale of assets during the current year. There can be no assurance that sources of funding will be available when needed on acceptable terms or at all. If we cannot obtain additional funding when required, the Company may sell certain assets, enter into collaborations, strategic alliances, merger and acquisition activities, and licensing agreements, negotiate with its principal lenders, wind-up operations of other subsidiaries, or file for bankruptcy protection.

Note 2 – Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Except as described herein, there have been no changes in the Company’s significant accounting policies as described in Note 2, Summary of Significant Accounting Policies, within the “Notes to Consolidated Financial Statements” accompanying the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial reporting and as required by Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (“SEC”) on March 19, 2024. These interim condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the periods presented. All amounts and disclosures set forth in this Quarterly Report on Form 10-Q reflect adoption of these changes.

Revised Prior Period Financial Statements

During the period close for the three months ended March 31, 2024, the Company discovered certain errors related to its accounting policy for the accounting of discontinued operations. The balance sheet did not segregate assets and liabilities for discontinued operations for a subsidiary of the Company on our December 31, 2023 balance sheets that were previously filed. This lack of segregation on the balance sheet did not impact the statements of operations or stockholders' deficit.

The Company has determined that the impact of this balance sheet reclassification is not material to these previously issued balance sheets and as such no restatement was necessary. Correcting prior year financial statements for immaterial errors would not require previously filed reports to be amended. Such a correction may be made the next time the registrant files the prior year financial statements. Correcting the cumulative error in the current year would also be immaterial to the current year. Accordingly, these misstatements were corrected, and the adjustments are reflected in the related periods as noted below. The reclassifications made to the December 31, 2023 balance sheets are summarized below.

Consolidated Balance Sheets:

	As of December 31, 2023
	Previously Reported		Adjustments			Revised
Accounts receivable	$	2,072	$	(161	)	$	1,911
Current assets of discontinued operations		-		161			161
Accounts payable		6,803		(4,723	)		2,080
Accrued expenses and other current liabilities		4,106		(2,054	)		2,052
Short term lease liabilities		1,426		(480	)		946
Current liabilities of discontinued operations		-		7,257			7,257

Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates. Significant management estimates include those with respect to returns and allowances, allowance for doubtful accounts receivable, allowance for credit losses, reserves for inventory obsolescence, the recoverability of long-lived assets, intangibles and goodwill.

Contract Liabilities

Our contract liabilities consist of customer deposits and contractual guaranteed returns. Net contract liabilities are recorded in accrued expenses and other current liabilities and consisted of the following:

	September 30, 2024		December 31, 2023
Contract Liabilities - Customer Deposits	$	2,568	$	2,022
Contract Liabilities - Guaranteed Returns		118		127
	$	2,686	$	2,149

Fair Value of Financial Instruments

We apply the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

Level 1 – inputs are quoted prices in active markets for identical assets that the reporting entity has the ability to access at the measurement date.

Level 2 – inputs are other than quoted prices included within Level 1 that are observable for the asset, either directly or indirectly.

Level 3 – inputs are unobservable inputs for the asset that are supported by little or no market activity and that are significant to the fair value of the underlying asset or liability.

The Company did not have any financial instruments that are measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023.

Accounts Receivable and Allowances

Our allowance for trade receivables consists of two components: an allowance for customer claims and an allowance for credit losses.

We estimate expected credit losses on our trade receivables in accordance with Accounting Standards Codification ("ASC") 326 - Financial Instruments - Credit Losses. We adopted this accounting standard prospectively on the first day of our 2023 fiscal year.

We measure the allowance for credit losses on trade receivables on a collective (pool) basis when similar risk characteristics exist. We pool our trade receivables by type, wholesalers and retailers. Our historical credit loss experience provides the basis for our estimation of expected credit losses. We use a two-year average of annual loss rates as a starting point for our estimation and make adjustments to the historical loss rates to account for differences in current conditions impacting the collectability of our receivable pools. We generally monitor macroeconomic indicators to assess whether adjustments are necessary to reflect current conditions.

We grant credit to customers and generally do not require collateral or other security. We perform credit evaluations of our customers and provide for expected claims related to promotional items, customer discounts, shipping shortages, damages, and doubtful accounts based upon historical bad debt and claims experience. As of September 30, 2024, total allowances amounted to $318, of which $53 was related to doubtful accounts receivable and $28 was related to expected credit losses. As of December 31, 2023, total allowances amounted to $862, of which $175 was related to doubtful accounts receivable.

Net Income (Loss) per Common Share

Basic net income (loss) per common share (“Basic EPS”) is computed by dividing net income (loss) by the weighted average number of common shares outstanding. Diluted net income (loss) per common share (“Diluted EPS”) is computed by dividing net income (loss) by the sum of the weighted average number of common shares outstanding and the dilutive potential common shares then outstanding. Potential dilutive common share equivalents consist of total shares issuable upon the exercise of outstanding stock options and warrants to acquire common stock using the treasury stock method and the average market price per share during the period.

When calculating diluted income (loss) per share, if the effects are dilutive, companies are required to add back to net income the effects of the change in derivative liabilities related to warrants. Additionally, if the effects of the change in derivative liabilities are added back to net income, companies are required to include the warrants outstanding related to the derivative liability in the calculation of the weighted average dilutive shares.

The common shares used in the computation of our basic and diluted net income (loss) per share are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
		2024			2023			2024			2023
Numerator:
Net loss from continuing operation	$	(2,708	)	$	(2,350	)	$	(6,630	)	$	(7,151	)
Net income (loss) from discontinued operation, net of income taxes		28			(3,014	)	$	279		$	(5,015)
Net loss	$	(2,680	)	$	(5,364	)		(6,351	)		(12,166	)

Denominator:
Weighted-average number of common shares - Basic		259,092,833			259,092,833			259,092,833			259,092,833
Weighted-average number of common shares - Diluted		259,092,833			259,092,833			259,092,833			259,092,833

Net loss per common share:
Basic EPS	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.05	)
Diluted EPS	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.05	)

Significant Concentration of Credit Risk

Sales to our top three customers aggregated to approximately 50% and 43% of total sales for the three months ended September 30, 2024 and 2023, respectively, and 54% and 29% of total sales for the nine months ended September 30, 2024 and 2023, respectively. Sales to one of those customers were approximately 26% and 21% of total sales for the three months ended September 30, 2024 and 2023, respectively, and 26% and 9% of total sales for the nine months ended September 30, 2024 and 2023, respectively. Accounts receivable from these three customers were approximately 35% and 42% of total accounts receivable as of September 30, 2024 and December 31, 2023, respectively.

A single customer represents 0% and 3% of total accounts receivable as of September 30, 2024 and December 31, 2023, respectively. This customer is a related party through a director who sits on both the Company’s board of directors and that of the customer.

Revenue Recognition

The Company recognizes revenue based on a five-step model in accordance with ASC 606. For our customer contracts: (i) we identify the contract with a customer; (ii) we identify the performance obligations in the contract; (iii) we determine the transaction price; (iv) we allocate the transaction price to the performance obligation; and (v) we recognize revenue when we satisfy the performance obligation. Our revenues are recorded at a point in time when the performance is fulfilled, which is when the product is shipped to or received by the customer.

Product sales are recorded net of variable considerations, such as provisions for returns, discounts, and allowances.

We account for shipping and handling costs as costs to fulfill a contract and not as performance obligations to our customers. Shipping and handling costs are recorded in cost of sales.

Leases

The Company accounts for leases in accordance with ASC 842. The Company reviews all contracts and determines if the arrangement is or contains a lease, at inception. Operating leases are included in right-of-use (“ROU”) assets, current lease liabilities and long-term lease liabilities on the condensed consolidated balance sheets. The Company does not have any finance leases.

Operating lease ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses its estimated incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The operating lease ROU asset also includes any upfront lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Leases with a term of 12 months or less are not recorded on the balance sheet. The Company’s lease agreements do not contain any residual value guarantees.

Discontinued operations

We report financial results for discontinued operations separately from continuing operations to distinguish the financial impact of disposal transactions from ongoing operations. Discontinued operations reporting occurs only when the disposal meets the criteria for classification as a discontinued operation in accordance with ASC Subtopic 205-20, Discontinued Operations (“ASC 205-20”). In our consolidated statements of cash flows, the cash flow from discontinued operations are separately classified/reported. Unless indicated otherwise, the information in the Notes to the consolidated financial statements relate to continuing operations (See Note 9, Discontinued Operations).

Note 3 – Inventories, net

Inventories, net consisted of the following from continuing operations:

	September 30, 2024			December 31, 2023
Raw materials	$	13		$	119
Finished goods		2,836			3,362
		2,849			3,481
Reserve for obsolete inventory		(90	)		(79	)

Inventories, net	$	2,759		$	3,402

There were no inventories from discontinued operations as of September 30, 2024 and December 31, 2023.

Note 4 – Property and Equipment, Net

Property and equipment, net consisted of the following from continuing operations:

	September 30, 2024				December 31, 2023
Computers and other	$	54		$	54
		54			54
Accumulated depreciation and amortization		(53	)		(45	)

Property and equipment, net	$	1		$	9

Depreciation and amortization expense totaled $2 and $9 for the three months ended September 30, 2024 and 2023, respectively, and totaled $8 and $33 for the nine months ended September 30, 2024 and 2023, respectively.

Note 5 – Intangible Assets

Intangible assets consisted of the following:

	September 30, 2024			December 31, 2023
Trademarks	$	4,739		$	4,739
Indefinite-lived intangible assets		120			120
Customer relationships		6,023			6,023
		10,882			10,882
Accumulated amortization		(10,762	)		(10,762	)

Intangible assets, net	$	120		$	120

Trademarks are amortized over periods ranging from 3 to 30 years and customer relationships are amortized over periods ranging from 15 to 16 years. During the fourth quarter of fiscal 2022 we recorded an aggregate impairment loss of the remaining definitive-lived intangible assets related to NSL customer relationships. Therefore, there was no amortization expense for the nine months ended September 30, 2024.

Note 6 – Debt

Debt consisted of the following:

	September 30,		December 31,
	2024		2023
Related Party Debt:
July 2014 note payable to Little Harbor, LLC	$	3,267	$	3,267
July 2016 note payable to Little Harbor, LLC		4,770		4,770
January 2016 note payable to Great Harbor Capital, LLC		2,500		2,500
March 2016 note payable to Great Harbor Capital, LLC		7,000		7,000
December 2016 note payable to Great Harbor Capital, LLC		2,500		2,500
August 2017 note payable to Great Harbor Capital, LLC		3,000		3,000
February 2018 note payable to Great Harbor Capital, LLC		2,000		2,000
July 2018 note payable to Great Harbor Capital, LLC		5,000		5,000
November 2018 note payable to Great Harbor Capital, LLC		4,000		4,000
February 2020 note payable to Great Harbor Capital, LLC		2,500		2,500
January 2016 note payable to Golisano Holdings LLC		2,500		2,500
March 2016 note payable to Golisano Holdings LLC		7,000		7,000
July 2016 note payable to Golisano Holdings LLC		4,770		4,770
December 2016 note payable to Golisano Holdings LLC		2,500		2,500
March 2017 note payable to Golisano Holdings LLC		3,267		3,267
February 2018 note payable to Golisano Holdings LLC		2,000		2,000
February 2020 note payable to Golisano Holdings LLC		2,500		2,500
November 2014 note payable to Golisano Holdings LLC formerly payable to Penta Mezzanine SBIC Fund I, L.P.		8,000		8,000
January 2015 note payable to Golisano Holdings LLC formerly payable to JL-BBNC Mezz Utah, LLC		5,000		5,000
February 2015 note payable to Golisano Holdings LLC formerly payable to Penta Mezzanine SBIC Fund I, L.P.		1,999		1,999
Macatawa Bank		14,884		14,884
Total related party debt		90,957		90,957

Senior Credit Facility with Midcap		2,041		2,680
Total debt related to continuing operations		92,998		93,637

Total debt		92,998		93,637
Less current portion		92,998		93,637

Long-term debt	$	-	$	-

Little Harbor LLC

Mr. David L. Van Andel, the Chairman of the Company’s Board of Directors, is the owner and principal of Little Harbor LLC. Mr. Mark Bugge, at the time the notes were entered into, was a member of the Company’s Board of Directors and the Secretary of Little Harbor LLC.

July 2014 Note Payable to Little Harbor, LLC

Pursuant to a July 2014 Debt Repayment Agreement with Little Harbor, LLC (“Little Harbor”), an entity owned by certain stockholders of the Company, on February 6, 2018, we entered into an agreement with Little Harbor to convert a debt repayment obligation of $3,267 into an unsecured promissory note (the “Little Harbor Debt Repayment Note”). The note bears interest at an annual rate of 8.5%, with the principal payable at maturity. The Little Harbor Debt Repayment Note was scheduled to mature on July 25, 2020; the maturity was subsequently extended to October 22, 2021.

July 2016 Note Payable to Little Harbor, LLC

On July 21, 2016, we issued an unsecured delayed draw promissory note in favor of Little Harbor (“Little Harbor Delayed Draw Note”), pursuant to which Little Harbor loaned us the full approved amount of $4,770 during the year ended December 31, 2016. This note bears interest at an annual rate of 8.5%, with the principal payable at maturity. We issued a warrant into escrow in connection with this loan (see Little Harbor Escrow Warrant in Note 7). This unsecured note was scheduled to mature on January 28, 2019; the maturity was subsequently extended to June 30, 2019 and October 22, 2021.

Little Harbor delivered a deferment letter pursuant to which Little Harbor agreed to defer all payments due under the aforementioned notes held by Little Harbor through October 22, 2021 and agreed to refrain from declaring a default and/or exercising any remedies under the notes.

Amendments to extend the maturity date and related payment deferrals of the aforementioned notes to Little Harbor have not been executed and these notes to Little Harbor are currently in default. We anticipate extending the maturity dates and related payment deferrals with Little Harbor, but we cannot guarantee that such extensions and payment deferrals will be successfully obtained. To date, Little Harbor has not exercised any of its remedies available upon a default for any of the aforementioned notes.

As of December 30, 2024, all debts held by and interest due of the aforementioned notes to LH were assigned to Akretive, LLC, including one-half of the Macatawa debt. To date, Akretive, LLC has not exercised any of its remedies available upon a default for any of the aforementioned notes.

Great Harbor Capital LLC

Mr. David L. Van Andel, the Chairman of the Company’s Board of Directors, is the owner and principal of Great Harbor Capital LLC. Mr. Mark Bugge, at the time the notes were entered into, was a member of the Company’s Board of Directors and the Secretary of Great Harbor Capital LLC.

January 2016 Note Payable to Great Harbor Capital, LLC

Pursuant to a January 28, 2016 unsecured promissory note (the “January 2016 GH Note”) with Great Harbor Capital, LLC (“GH”), an affiliate of a former member of our Board of Directors, GH lent us $2,500. The January 2016 GH Note bears interest at an annual rate of 8.5%, with the principal payable in 24 monthly installments of $104 which payment was to commence on February 28, 2017 but was deferred to August 31, 2019. We issued a warrant into escrow in connection with this loan (see GH Escrow Warrants in Note 7). The original maturity date of the January 2016 GH Note was January 28, 2019; the maturity was subsequently extended to June 30, 2019 and October 22, 2021.

March 2016 Note Payable to Great Harbor Capital, LLC

Pursuant to a March 21, 2016 unsecured promissory note (the “March 2016 GH Note”), GH lent us $7,000. This March 2016 GH Note bears interest at an annual rate of 8.5%, with the principal payable in 24 monthly installments of $292 which payment was to commence on April 21, 2017 but was deferred to August 30, 2019. We issued a warrant into escrow in connection with this loan (see GH Escrow Warrants in Note 7). The note was scheduled to mature on March 21, 2019; the maturity was subsequently extended to June 30, 2019 and October 22, 2021.

December 2016 Note Payable to Great Harbor Capital, LLC

Pursuant to a December 31, 2016 unsecured promissory note (the “December 2016 GH Note”), GH lent us $2,500. The December 2016 GH Note bears interest at an annual rate of 8.5%, with the principal payable at maturity. We issued a warrant into escrow in connection with this loan (see GH Escrow Warrants in Note 7). The note was scheduled to mature on December 31, 2019; the maturity was subsequently extended to October 22, 2021.

August 2017 Note Payable to Great Harbor Capital, LLC

Pursuant to an August 30, 2017 secured promissory note, GH lent us $3,000 (the “August 2017 GH Note”). The August 2017 GH Note bears interest at an annual rate of 8.5%, with the principal payable at maturity. We issued a warrant into escrow in connection with this loan (see GH Escrow Warrants in Note 7). The note was scheduled to mature on August 29, 2020; the maturity was subsequently extended to October 22, 2021.

February 2018 Note Payable to Great Harbor Capital, LLC

Pursuant to a February 6, 2018 secured promissory note, GH lent us $2,000 (the “February 2018 GH Note”). The note bears interest at an annual rate of 8.5%, with the principal payable at maturity. This note is secured by collateral and is subordinate to the indebtedness owed to Midcap Funding X Trust as successor-by-assignment from MidCap Financial Trust (“MidCap”). The note was scheduled to mature on February 6, 2021; the maturity was subsequently extended to October 22, 2021.

As previously reported, on February 6, 2018, the Company issued an amended and restated secured promissory note to GH (the “A&R August 2017 GH Note”) replacing the prior secured promissory note issued on August 30, 2017. The amendment and restatement added a requirement that when the Company consummates any Special Asset Disposition (as defined in the February 2018 GH Note), provided that the Company has a minimum liquidity of $1,000, the Company will use the net cash proceeds from the Special Asset Disposition to pay any accrued and unpaid interest under the A&R August 2017 GH Note and any other note subject to the Intercreditor Agreement (defined below). The interest rate and payment terms remain unchanged from the original secured promissory note issued to GH on August 30, 2017; however, the maturity date was extended to October 22, 2021.

Furthermore, as a result of notes issued on February 6, 2018, by GH and Golisano Holdings LLC (“Golisano LLC”), GH and Golisano LLC entered into an “Intercreditor Agreement” where they agreed that each of the February 2018 GH Note, A&R August 2017 GH Note, and the Golisano LLC February 2018 Note (as defined below) are pari passu as to repayment, security and otherwise and are equally and ratably secured.

July 2018 Note Payable to Great Harbor Capital, LLC

Pursuant to a July 27, 2018 secured promissory note, GH loaned the Company $5,000 (the “July 2018 GH Note”). The July 2018 GH Note bears interest at an annual rate of 8.5%, with the principal payable on maturity. Interest on the outstanding principal accrues at a rate of 8.5% per year and is payable monthly on the first day of each month, beginning September 1, 2018. The principal of the July 2018 GH Note was payable at maturity on January 27, 2020. The July 2018 GH Note is secured by collateral. We issued a warrant to GH in connection with this loan (see GH Warrants in Note 7). In July 2019, the Company and GH amended this note to extend the maturity date to October 22, 2021.

The July 2018 GH Note is subordinate to the indebtedness owed to MidCap. The July 2018 GH Note is senior to the indebtedness owed to Little Harbor and Golisano LLC.

November 2018 Note Payable to Great Harbor Capital, LLC

Pursuant to a November 5, 2018 secured promissory note, GH loaned the Company $4,000 (the “November 2018 GH Note”). The November 2018 GH Note bears interest at an annual rate of 8.5%, with the principal payable on maturity. Interest on the outstanding principal accrues at a rate of 8.5% per year and is payable monthly on the first day of each month, beginning December 1, 2018. The principal of the November 2018 GH Note was payable at maturity on November 5, 2020. The November 2018 GH Note is secured by collateral. We issued a warrant to GH in connection with this loan (see GH Warrants in Note 7). In July 2019, the Company and GH amended this note to extend the maturity to October 22, 2021.

February 2020 Note Payable to Great Harbor Capital, LLC

Pursuant to a February 2020 unsecured promissory note (the “February 2020 GH Note”), an affiliate of a former member of our Board of Directors, GH lent us $2,500. The February 2020 GH Note bears interest at an annual rate of 8%, with the principal payable at the maturity of October 22, 2021. GH delivered a deferment letter pursuant to which GH agreed to defer all payments due under the aforementioned notes held by GH, through October 22, 2021 and agreed to refrain from declaring a default and/or exercising any remedies under the notes.

Amendments to extend the maturity date and related payment deferrals of the aforementioned notes to GH have not been executed and these notes are currently in default. We anticipate extending the maturity dates and related payment deferrals with GH, but we cannot guarantee that such extensions and payment deferrals will be successfully obtained. To date, GH has not exercised any of its remedies available upon a default for any of the aforementioned notes.

As of December 30, 2024, all debts held by and interest due of the aforementioned notes to GH were assigned to Akretive, LLC, including one-half of the Macatawa debt. To date, Akretive, LLC has not exercised any of its remedies available upon a default for any of the aforementioned notes.

Golisano Holdings LLC

Mr. B. Thomas Golisano, a former member of the Company’s Board of Directors, is a principal of Golisano LLC.

November 2014 Note Payable to Golisano Holdings LLC (formerly payable to Penta Mezzanine SBIC Fund I, L.P.)

On November 13, 2014, we raised proceeds of $8,000, less certain fees and expenses, from the issuance of a secured note to Penta Mezzanine SBIC Fund I, L.P. (“Penta”). The managing director of Penta, an institutional investor, was also a former director of our Company. We granted Penta a security interest in our assets and pledged the shares of our subsidiaries as security for the note. On March 8, 2017, Golisano LLC acquired this note payable from Penta (the “First Golisano Penta Note”). Interest on the outstanding principal accrued at a rate of 12% per year from the date of issuance to March 8, 2017, and decreased to 8% per year thereafter, payable monthly. The Company and Golisano LLC amended this note to extend the maturity from November 5, 2020 to October 22, 2021. We issued a warrant to Penta to purchase 4,960,740 shares of the Company’s common stock in connection with this loan.

January 2015 Note Payable to Golisano Holdings LLC (formerly payable to JL-Mezz Utah, LLC-f/k/a JL-BBNC Mezz Utah, LLC)

On January 22, 2015, we raised proceeds of $5,000, less certain fees and expenses, from the sale of a note to JL-Mezz Utah, LLC (f/k/a JL-BBNC Mezz Utah, LLC) (“JL-US”). The proceeds were restricted to pay a portion of the Nutricap Labs, LLC (“Nutricap”) asset acquisition. We granted JL-US a security interest in the Company’s assets, including real estate and pledged the shares of our subsidiaries as security for the note. On March 8, 2017, Golisano LLC acquired this note payable from JL-US. Interest on the outstanding principal accrued at a rate of 12% per year from the date of issuance to March 8, 2017, and decreased to 8% per year thereafter, payable monthly (the “Golisano JL-US Note”). On August 30, 2017, we entered into an amendment with Golisano LLC which extended payment of principal to maturity. We issued a warrant to JL-US to purchase 2,329,400 shares of the Company’s common stock on January 22, 2015 and 434,809 shares of the Company’s common stock on February 4, 2015. The 434,809 warrants expired unexercised on February 13, 2020. The note matured on October 22, 2021.

February 2015 Note Payable to Golisano Holdings LLC (formerly payable to Penta Mezzanine SBIC Fund I, L.P.)

On February 6, 2015, we raised proceeds of $1,999, less certain fees and expenses, from the issuance of a secured note payable to Penta. The proceeds were restricted to pay a portion of the acquisition of the customer relationships of Nutricap. On March 8, 2017, Golisano LLC acquired this note payable from Penta (the “Second Golisano Penta Note”). Interest on the outstanding principal accrued at a rate of 12% per year from the date of issuance to March 8, 2017, and decreased to 8% per year thereafter, payable monthly. On August 30, 2017, we entered into an amendment with Golisano LLC which extended payment of principal to maturity. We issued a warrant to Penta to purchase 869,618 shares of the Company’s common stock in connection with this loan. The note matured on October 22, 2021.

January 2016 Note Payable to Golisano Holdings LLC

Pursuant to a January 28, 2016 unsecured promissory note with Golisano LLC (the “Golisano LLC January 2016 Note”), an affiliate of a former member of our Board of Directors, Golisano LLC lent us $2,500. The note was scheduled to mature on January 28, 2019; the maturity was subsequently extended to June 30, 2019 and October 22, 2021. This note bears interest at an annual rate of 8.5%. We issued a warrant into escrow in connection with this loan (see Golisano Escrow Warrants in Note 7).

March 2016 Note Payable to Golisano Holdings LLC

Pursuant to a March 21, 2016 unsecured promissory note, Golisano LLC lent us $7,000 (the “Golisano LLC March 2016 Note”). The note was scheduled to mature on March 21, 2019; the maturity was subsequently extended to June 30, 2019 and October 22, 2021. This note bears interest at an annual rate of 8.5%. We issued a warrant into escrow in connection with this loan (see Golisano Escrow Warrants in Note 7).

July 2016 Note Payable to Golisano Holdings LLC

On July 21, 2016, we issued an unsecured delayed draw promissory note in favor of Golisano LLC pursuant to which Golisano LLC may, in its sole discretion and pursuant to draw requests made by the Company, loan the Company up to the maximum principal amount of $4,770 (the “Golisano LLC July 2016 Note”). During the year ended December 31, 2016, we requested and Golisano LLC approved, draws totaling $4,770. The Golisano LLC July 2016 Note was scheduled to mature on January 28, 2019; the maturity was subsequently extended to October 22, 2021. Interest on the outstanding principal accrues at a rate of 8.5% per year. The principal of the Golisano LLC July 2016 Note is payable at maturity. We issued a warrant into escrow in connection with this loan (see Golisano Escrow Warrants in Note 7).

December 2016 Note Payable to Golisano Holdings LLC

Pursuant to a December 31, 2016 unsecured promissory note, as amended and restated, Golisano LLC lent us $2,500 (the “Golisano LLC December 2016 Note”). The note bears interest at an annual rate of 8.5%, with the principal payable at maturity. We issued a warrant into escrow in connection with this loan (see Golisano Escrow Warrants in Note 7). The note was scheduled to mature on December 30, 2019; the maturity was subsequently extended to October 22, 2021.

March 2017 Note Payable to Golisano Holdings LLC

Pursuant to a March 14, 2017 unsecured promissory note, as amended and restated, Golisano LLC lent us $3,267 (the “Golisano LLC March 2017 Note”). The note bears interest at an annual rate of 8.5%, with the principal payable at maturity. We issued a warrant into escrow in connection with this loan (see Golisano Escrow Warrants in Note 7). The note was scheduled to mature on December 30, 2019; the maturity was subsequently extended to October 22, 2021.

February 2018 Note Payable to Golisano Holdings LLC

Pursuant to a February 6, 2018 secured promissory note, Golisano LLC lent us $2,000 (the “Golisano LLC February 2018 Note”). The note bears interest at an annual rate of 8.5%, with the principal payable at maturity. This note is secured by collateral and is subordinate to the indebtedness owed to MidCap. The note was scheduled to mature on February 6, 2021; the maturity was subsequently extended to October 22, 2021.

February 2020 Note Payable to Golisano Holdings LLC

Pursuant to a February 2020 unsecured promissory note (the “Golisano LLC February 2020 Note”), an affiliate of a former member of our Board of Directors, Golisano LLC lent us $2,500. The Golisano LLC February 2020 Note bears interest at an annual rate of 8%, with the principal payable at the maturity date of October 22, 2021.

Golisano LLC delivered a deferment letter pursuant to which Golisano LLC agreed to defer all payments due under the aforementioned notes held by Golisano LLC through October 22, 2021 and agreed to refrain from declaring a default and/or exercising any remedies under the notes.

Amendments to extend the maturity date and related payment deferrals of the aforementioned notes to Golisano LLC have not been executed and these notes are currently in default. We anticipate extending the maturity dates and related payment deferrals with the Golisano LLC, but we cannot guarantee that such extensions and payment deferrals will be successfully obtained. To date, Golisano LLC has not exercised any of its remedies available upon a default for any of the aforementioned notes.

As of April 22, 2025, all debts held by and interest due of the aforementioned notes to Golisano LLC were assigned to Akretive, LLC, including one-half of the Macatawa debt. To date, Akretive, LLC has not exercised any of its remedies available upon a default for any of the aforementioned notes.

Macatawa Bank

Mr. Mark Bugge is a former member of the board of directors of Macatawa Bank (“Macatawa”) and was a member of the Company’s board of directors; he was an active member of both boards at the time of the Term Loan (as defined below). A former member of the Company’s Board of Directors, Mr. B. Thomas Golisano, and a member of the Company's Board of Directors, Mr. David L. Van Andel, are the owners and principals of the guarantor, 463IP Partners, LLC (“463IP”). Furthermore, Mr. Van Andel, through his interest in a trust, holds an indirect limited partnership interest in White Bay Capital, LLLP, which has an ownership interest of greater than 10% in Macatawa.

On December 4, 2018, the Company entered into a Term Loan Note and Agreement (the “Term Loan”) in favor of Macatawa. Pursuant to the Term Loan, Macatawa loaned the Company $15,000. The Term Loan was scheduled to mature on November 30, 2020; and was subsequently extended to November 30, 2022. The Term Loan was amended on December 14, 2022 to extend the maturity date to November 30, 2024 and to transition from LIBOR to SOFR. The Term Loan accrues interest at the SOFR rate plus 1.05% per annum with a floor of 2.50%; the rate was outstanding as of September 30, 2024. After the maturity date or upon the occurrence or continuation of an event of default, the unpaid principal balance shall bear interest at the interest rate of the note plus 3.00%. The note is secured by the Limited Guaranty (as defined below) and is subordinate to the indebtedness owed to MidCap.

In connection with the Term Loan, 463IP has entered into a limited guaranty, dated as of December 4, 2018, in favor of Macatawa (the “Limited Guaranty”) pursuant to which it has agreed to guarantee payment under the Term Loan and any and all renewals of the Term Loan and all interest accrued on such indebtedness limited to $15,000 plus any accrued interest. On October 28, 2019, the Term Loan was amended and GH and Golisano LLC replaced 463IP as “Entity Guarantor” as defined in the Term Loan, and provided their guaranties for payment of the Company’s indebtedness and obligations under the Term Loan.

On November 30, 2024, the debt with Macatawa was settled by the surrender of collateral from the Guarantors of the note with the debt reverting back to the Guarantors. The remaining interest in this indebtedness of the Guarantors was assigned to Akretive, LLC.

Senior Credit Facility with Midcap

On January 22, 2015, we entered into a three-year $15,000 revolving credit facility (the “Senior Credit Facility”) pursuant to a credit and security agreement, based on our accounts receivable and inventory, which could be increased to up to $20,000 upon satisfaction of certain conditions, with MidCap. MidCap subsequently assigned the agreement to an affiliate, Midcap Funding X Trust.

On September 2, 2016, we entered into an amendment with Midcap to increase the Senior Credit Facility to $17,000 and extend our facility an additional 12 months. We granted MidCap a first priority security interest in certain of our assets and pledged the shares of our subsidiaries as security for amounts owed under the Senior Credit Facility. We agreed to pay Midcap an unused line fee of 0.50% per annum, a collateral management fee of 1.20% per month, and interest of LIBOR plus 5% per annum. We issued a warrant to Midcap to purchase 500,000 shares of the Company’s common stock (see Midcap Warrant in Note 7).

On January 22, 2019, we entered into Amendment Sixteen to the Credit and Security Agreement (the “MidCap Sixteenth Amendment”). The MidCap Sixteenth Amendment reduced the revolving credit facility amount from a total of $17,000 to a total of $5,000 and extended the expiration date from January 22, 2019 to April 22, 2019.

On February 13, 2019, MidCap informed the Company that MidCap had re-assigned all of its rights, powers, privileges and duties as “Agent” under the Credit and Security Agreement, as well as all of its right, title and interest in and to the revolving loans made under the facility from Midcap Funding X Trust to MidCap IV Funding.

On April 22, 2019, we entered into Amendment Seventeen to the Credit and Security Agreement (the “MidCap Seventeenth Amendment”), which effectively increased the revolving credit facility amount to $12,000 and renewed the Senior Credit Facility for an additional two years expiring on April 22, 2021.

On April 22, 2021, we entered into Amendment Eighteen to the Credit and Security Agreement (the “MidCap Eighteenth Amendment”), which effectively updated the unused line fee to 0.375% per annum, updated the interest rates to 3.75% per annum, and renewed the Senior Credit Facility for an additional three years expiring on April 22, 2024.

On March 15, 2023, we entered into Amendment Nineteen to the Credit and Security Agreement (the “MidCap Nineteenth Amendment”), which effectively isolated the portion on debt attributed to the assets of the discontinued NutraScience Labs subsidiary and removed it from the determination of provisional compliance. A schedule was established to ensure the pay down of the NutraScience Labs specific balance by the maturity date.

On March 28, 2024, we entered into Amendment Twenty to the Credit and Security Agreement (the “MidCap Twentieth Amendment”), which effectively renewed the Senior Credit Facility for an additional six months expiring on October 31, 2024.

We have incurred loan fees totaling $301 relating to the Senior Credit Facility and the subsequent amendments, which is also being amortized into interest expense over the term of the Senior Credit Facility. The balance owed on the Senior Credit Facility was $2,041 as of September 30, 2024.

Subsequently, On October 31, 2024, we entered into Amendment Twenty-One to the Credit and Security Agreement (the “MidCap Twenty-First Amendment”), which renewed the Senior Credit Facility for an additional three months expiring on January 31, 2025. A non-refundable modification fee of $125, with $25 due upon signing and $100 due at the end of the loan period, was included as part of this Amendment.

Subsequently, On January 31, 2025, we entered into Amendment Twenty-Two to the Credit and Security Agreement (the “MidCap Twenty-Second Amendment”), which effectively renewed the Senior Credit Facility for an additional three months expiring on April 30, 2025. On April 22, 2025, the Credit and Security Agreement was paid in full. Security interests were released as part of the closure of the Agreement.

Financial Covenants

Certain of the foregoing debt agreements, as amended, require us to meet certain affirmative and negative covenants, including maintenance of specified ratios. As of September 30, 2024, we were in default for lack of compliance with the EBITDA-related financial covenant of the debt agreement with MidCap. The amount due to MidCap for this revolving credit line is $2,041 as of September 30, 2024.

Note 7 – Warrants and Registration Rights Agreements

The following table presents a summary of the status of our issued warrants as of September 30, 2024, and changes during the nine months then ended:

	Shares Underlying Warrants			Weighted Average Exercise Price
Outstanding, December 31, 2023		4,500,000		$	0.01
Granted		-			-
Canceled / Expired		(2,500,000	)		(0.01	)
Exercised		-			-
Outstanding, September 30, 2024		2,000,000		$	0.01

In periods of a net loss, potentially dilutive securities are not included in the computation of diluted earnings (loss) per share as their inclusion would be antidilutive. The 2,000,000 of warrants were excluded from the diluted earnings (loss) per share calculation because their inclusion would have been antidilutive.

GH Warrants

In connection with the July 2018 GH Note, we issued GH a warrant to purchase an aggregate of 2,500,000 shares of the Company’s common stock at an exercise price of $0.01 per share (the “July 2018 GH Warrant”). The Company had reserved 2,500,000 shares of the Company’s common stock for issuance under the July 2018 GH Warrant. The July 2018 GH Warrant expired on July 27, 2024. The July 2018 GH Warrant was also subject to customary adjustments upon any recapitalization, reorganization, stock split, combination of shares, merger or consolidation. The Company estimated the value of the warrant using the Black-Scholes option pricing model and recorded a debt discount of $1,479, which was amortized over the original term of the July 2018 GH Note.

In connection with the November 2018 GH Note, we issued GH a warrant to purchase an aggregate of 2,000,000 shares of the Company’s common stock at an exercise price of $0.01 per share (the “November 2018 GH Warrant”). The Company has reserved 2,000,000 shares of the Company’s common stock for issuance under the November 2018 GH Warrant. The November 2018 GH Warrant expires on November 5, 2024. The November 2018 GH Warrant is also subject to customary adjustments upon any recapitalization, reorganization, stock split, combination of shares, merger or consolidation. The Company estimated the value of the warrant using the Black-Scholes option pricing model and recorded a debt discount of $1,214 which was amortized over the original term of the November 2018 GH Note.

Warrants Issued into Escrow

At September 30, 2024, there were no outstanding warrants held in escrow (“Escrow Warrants”). In the second quarter of 2024, there were no outstanding warrants held in escrow. These Escrow Warrants were held in escrow and were not exercisable unless the Company defaulted on the related debt. These Warrants expired on February 6, 2024. These Escrow Warrants are as follows:

Golisano Escrow Warrants

In connection with the Golisano LLC March 2017 Note, we issued into escrow in the name of Golisano LLC a warrant to purchase an aggregate of 1,484,847 shares of the Company’s common stock, at an exercise price of $0.01 per share (the “Golisano March 2017 Warrant”). The Golisano March 2017 Warrant will not be released from escrow or be exercisable unless and until we fail to pay Golisano LLC the entire unamortized principal amount of the Golisano LLC March 2017 Note and any accrued and unpaid interest thereon as of December 31, 2019 (which was extended to October 22, 2021 - See Note 6 for further information) or such earlier date as is required pursuant to an Acceleration Notice (as defined in the Golisano LLC March 2017 Note). We had reserved 1,484,847 shares of the Company’s common stock for issuance under the Golisano March 2017 Warrant. The Golisano March 2017 Warrant expired unexercised on March 14, 2023.

In connection with the Golisano LLC February 2018 Note, we issued into escrow in the name of Golisano LLC a warrant to purchase an aggregate of 1,818,182 shares of the Company’s common stock at an exercise price of $0.01 per share (the “Golisano 2018 Warrant”). The Golisano 2018 Warrant will not be released from escrow or be exercisable unless and until the Company fails to pay Golisano LLC the entire unamortized principal amount of the Golisano LLC February 2018 Note and any accrued and unpaid interest thereon as of February 6, 2021, (which was extended to October 22, 2021 - See Note 6 for further information) or such earlier date as is required pursuant to an acceleration notice. The Company had reserved 1,818,182 shares of the Company’s common stock for issuance under the Golisano 2018 Warrant. The Golisano 2018 Warrant expired unexercised on February 6, 2024.

We previously entered into a registration rights agreement with Golisano LLC, dated as of October 5, 2015 (the “Registration Rights Agreement”), granting Golisano LLC certain registration rights for certain shares of the Company’s common stock. The shares of common stock issuable pursuant to the above Golisano LLC warrants are also entitled to the benefits of the Registration Rights Agreement.

GH Escrow Warrants

In connection with the August 2017 GH Note, we issued into escrow in the name of GH a warrant to purchase an aggregate of 1,363,636 shares of the Company’s common stock, at an exercise price of $0.01 per share (the “August 2017 GH Warrant”). The August 2017 GH Warrant will not be released from escrow or be exercisable unless and until we fail to pay GH the entire unamortized principal amount of the August 2017 GH Note and any accrued and unpaid interest thereon as of August 29, 2020 (which was extended to October 22, 2021 - See Note 6 for further information) or such earlier date as is required pursuant to an Acceleration Notice (as defined in the August 2017 GH Note). We have reserved 1,363,636 shares of common stock for issuance under the August 2017 GH Warrant. The August 2017 GH Warrant expired unexercised on August 30, 2023. The August 2017 GH Warrant is also subject to customary adjustments upon any recapitalization, capital reorganization or reclassification, consolidation, merger or transfer of all or substantially all of our assets.

In connection with the February 2018 GH Note, we issued into escrow in the name of GH a warrant to purchase an aggregate of 1,818,182 shares of the Company’s common stock at an exercise price of $0.01 per share (the “February 2018 GH Warrant”). The February 2018 GH Warrant will not be released from escrow or be exercisable unless and until the Company fails to pay GH the entire unamortized principal amount of the note and any accrued and unpaid interest thereon as of February 6, 2021, (which was extended to October 22, 2021 - See Note 6 for further information) or such earlier date as is required pursuant to an acceleration notice. The Company had reserved 1,818,182 shares of the Company’s common stock for issuance under the February 2018 GH Warrant. The February 2018 GH Warrant expired unexercised on February 6, 2024.

Note 8 – Leases

The Company leases office space under non-cancelable operating leases with lease terms ranging from 1 to 7 years. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases also include renewal options at the election of the Company to renew or extend the lease for an additional 2 to 5 years. These optional periods have not been considered in the determination of the right-of-use assets or lease liabilities associated with these leases as the Company did not consider it reasonably certain it would exercise the options. The Company performed evaluations of its contracts and determined each of its identified leases are operating leases.

The sublease agreement to sublease half of the 31,000 square feet of office in St. Petersburg, Florida that commenced on February 1, 2017, expired on June 30, 2022. The lease was re-measured at that time and as a result, the Company recorded an impairment loss of $373 in general and administrative expenses. The lease was re-measured again in 2023 and, as a result, the Company recorded an impairment loss of $488 in general and administrative expenses. As of September 30, 2024, a subtenant still has not been found and one is not anticipated to be found before the lease expires. The Company incurred an impairment loss of $284 in general and administrative expenses.

For the three months ended September 30, 2024 and September 30, 2023, the Company incurred $84 and $171, respectively, of lease expense on the condensed consolidated statements of operations in relation to these operating leases, of which $53 and $49 was variable rent expense associated with capitalized operating leases and not included within the measurement of the Company's operating right-of-use assets and lease liabilities. The variable rent expense consists primarily of the Company's proportionate share of operating expenses, property taxes and insurance, and it is classified as lease expense due to the Company's election to not separate lease and non-lease components.

In September 2024, the Company amended one of its lease agreements to extend the lease for 1,533 square feet of office space in Boca Raton, Florida for an additional 12 calendar months, commencing on November 1, 2024 and expires on October 31, 2025.

The lease agreement for 18,700 square feet of office space in Farmingdale, New York used by NutraScience Labs as its corporate office commenced on June 2, 2017 and was surrendered to the landlord, as part of the abandonment of operations, on May 12, 2023. A loss of $20 was recorded in general and administrative expenses.

The lease agreement for 13,500 square feet of office space in Hauppauge, New York used by NutraScience Labs as its secondary office space and warehouse commenced on May 1, 2021 and was forfeited to the landlord, as part of the abandonment of operations, during the quarter ended March 31, 2024. A loss of $454 was recorded in general and administrative expenses.

As of September 30, 2024, the maturities of the Company’s lease liabilities were as follows:

2024 (excluding the nine months ended September 30, 2024)	$	441
2025		1,191
2026		952
2027		306
Total lease payments		2,890
Less: imputed interest		(247	)
Present value of lease liabilities	$	2,643

Included below is other information regarding leases for the periods noted below.

		Three Months Ended September 30, 2024			Nine Months Ended September 30, 2024
Sublease income	$	167		$	501
Cash paid for operating leases	$	149		$	730
Weighted average remaining lease term (years) - operating leases		2.0			2.0
Weighted average discount rate – operating leases		8.25	%		8.25	%

Note 9 – Discontinued Operations

Throughout the third quarter of 2023, the Company took steps to cease the operations of its fully owned subsidiary, NSL. By September 30, 2023, the aggregation of these efforts resulted in the abandonment of the remaining assets associated with the subsidiary. The Company no longer retains access to the facilities and warehousing locations previously associated with NSL operations. The loss recognized related to the disposal was $1,220 and is included in loss from discontinued operations, net of tax.

The major classes of assets and liabilities of our discontinued operations as reported on the Balance Sheet are as follows:

		September 30, 2024		December 31, 2023
Carrying amounts of assets associated with NutraScience Labs included as part of discontinued operations:
Accounts receivable, net	$	-	$	161
Current assets of discontinued operations	$	-	$	161

Carrying amounts of liabilities associated with NutraScience Labs included as part of discontinued operations:
Accounts payable	$	4,321	$	4,722
Accrued expenses and other current liabilities		2,300		2,055
Short-term operating lease liabilities		480		480
Current liabilities of discontinued operations	$	7,101	$	7,257

The operating results of our discontinued operations are as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
		2024		2023			2024		2023
Net sales	$	-	$	1		$	-	$	7,106
Cost of sales		-		(9	)		-		(6,796	)
Operating costs and expense		28		(3,006	)		279		(5,325	)
Income (loss) from discontinued operations before Provision for income taxes		28		(3,014	)		279		(5,015	)
Provision expense for income taxes		-		-			-		-
Income (loss) from discontinued operations, net of tax	$	28	$	(3,014	)	$	279	$	(5,015	)

Note 10 – Stockholders’ Deficit

Preferred Stock

The Company has authorized 500,000,000 shares of preferred stock with a par value of $0.001 per share. No shares of the preferred stock have been issued.

Twinlab Consolidation Corporation 2013 Stock Incentive Plan

The Twinlab Consolidation Corporation 2013 Stock Incentive Plan (the “TCC Plan”) was originally established with a pool of 20,000,000 shares of common stock for issuance as incentive awards to employees for the purposes of attracting and retaining qualified employees. The Company estimated the grant date fair market value per share of the restricted stock units and amortized the total estimated grant date value over the vesting periods. The restricted stock unit awards vested 25% annually on various dates through 2019. There were no outstanding or unvested restricted stock units at December 31, 2023 or September 30, 2024. As of September 30, 2024, 0 shares remain available for use in the TCC Plan.

Stock Subscription Receivable and Loss on Stock Price Guarantee

As of September 30, 2024, the stock subscription receivable dated August 1, 2014 for the purchase of 1,528,384 shares of the Company’s common stock had a principal balance of $30 and bears interest at an annual rate of 5%.

Note 11 – Recent Accounting Pronouncements

Accounting Pronouncements Issued Not Yet Adopted

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which enhances reporting requirements under Topic 280. The enhanced disclosure requirements include: title and position of the Chief Operating Decision Maker (CODM), significant segment expenses provided to the CODM, extending certain annual disclosures to interim periods, clarifying single reportable segment entities must apply ASC 280 in its entirety, and permitting more than one measure of segment profit or loss to be reported under certain circumstances. This change is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. This change will apply retrospectively to all periods presented. Management is currently assessing the impact of the adoption of this ASU on the financial statements of the Company.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2023, which was filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2024. This discussion and analysis and other parts of this Quarterly Report contain forward-looking statements based upon current beliefs, plans and expectations that involve risks, uncertainties and assumptions. Any statements contained herein that are not statements of historical fact, including statements regarding guidance, industry prospects or future results of operations or financial position made in this report are forward-looking. We often use words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “predicts,” “hopes,” “should,” “plans,” “will” and similar expressions to identify forward-looking statements. These statements are based on management’s current expectations and accordingly are subject to uncertainty and changes in circumstances. Actual results may vary materially from the expectations contained herein due to various important factors, including (but not limited to): widespread health concerns; supply chain disruptions; the impact of inflation; consumer preferences, spending and debt levels; the general economic and credit environment; interest rates; variations in consumer purchasing activities; competitive pressures on sales; the loss of a significant customer or material reduction of business with a significant customer; pricing and gross sales margins; the associated fees or estimated cost savings from contract renegotiations; and our ability to establish and maintain acceptable commercial terms with contract manufacturers. We undertake no obligation to publicly update or revise any forward-looking statements except as required by law.

Overview

We are an integrated formulator, marketer, distributor, and retailer of branded nutritional supplements and other natural products sold to and through domestic health and natural food stores, mass market retailers, specialty retailers, on-line retailers, and websites. Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers.

Our products include vitamins, minerals, specialty supplements, and sports nutrition products primarily under the Twinlab®, Reserveage and ResVitale® brands. We also formulate, market and sell diet and energy products under the Metabolife® brand. To accommodate consumer preferences, our products come in various formulations and delivery forms, including capsules, tablets, softgels, chewables, liquids, sprays, and powders. These products are sold primarily through health and natural food stores and on-line retailers, supermarkets, and mass-market retailers.

We distribute one of the broadest branded product lines in the industry with approximately 70 stock keeping units, or SKUs. We believe that as a result of our emphasis on innovation, quality, loyalty, education and customer service, our brands are widely recognized in health and natural food stores and among their customers. In most periods since our formation, we have generated losses from operations.

Going Concern Uncertainty

The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which assumes continuity of operations and realization of assets and liabilities in the ordinary course of business. In most periods since our formation, we have generated losses from operations. At September 30, 2024, we had an accumulated deficit of $376.5 million. Historical losses are primarily attributable to lower than planned sales resulting from low fill rates on demand due to limitations of our working capital, delayed product introductions and postponed marketing activities, merger-related and other restructuring costs, interest and refinancing charges associated with our debt refinancing, and impairment of goodwill and intangible assets. Losses have been funded primarily through issuance of common stock and third-party or related party debt.

Because of our history of operating losses and significant interest expense on our debt, we have a working capital deficiency of $146.6 million at September 30, 2024. We also have $93.0 million of debt, presented in current liabilities. These continuing conditions, among others, raise substantial doubt about our ability to continue as a going concern.

Management is addressing operating issues through the following actions: focusing on growing the core business and brands; continuing emphasis on major customers and key products; reducing manufacturing and operating costs and continuing to negotiate lower prices from major suppliers. We believe that we will need additional capital to execute our business plan. There can be no assurance that sources of funding will be available when needed on acceptable terms or at all.

The condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Results of Operations

Comparison of the Three and Nine Month Periods Ended September 30, 2024 and 2023 (amounts in thousands, except share and per share amounts)

The following table summarizes our financial results for the three and nine month periods ended September 30, 2024 and 2023:

	Three Months Ended September 30,						Increase			%			Nine Months Ended September 30,						Increase			%
	2024			2023			(Decrease)			Change				2024			2023		(Decrease)			Change
Net sales	$	2,322		$	3,676		$	(1,354	)		(37	)	$	8,210		$	10,473		$	(2,263	)		(22	)
Cost of sales		1,680			2,345			(665	)		(28	)		5,500			6,475			(975	)		(15	)
Gross profit		642			1,331			(689	)		(52	)		2,710			3,998			(1,288	)		(32	)
Operating costs and expenses:
Selling expenses		126			342			(216	)		(63	)		344			933			(589	)		(63	)
General and administrative expenses		1,262			1,191			71			6			3,075			3,769			(694	)		(18	)
Loss from operations		(746)			(202	)		(544)			269			(709	)		(704	)		(5)			1

Other income (expense):
Interest expense, net		(1,962	)		(2,107	)		(145	)		(7	)		(5,923	)		(6,429	)		(506	)		(8	)
Other income, net		-			(16	)		(16	)		(100	)		8			14			(6	)		(43	)
Total other expense, net		(1,962	)		(2,123	)		(161	)		(8	)		(5,915	)		(6,415	)		(500	)		(8	)

Loss before income taxes		(2,708	)		(2,325	)		(383)			(16)			(6,624	)		(7,119	)		495			(7	)

Provision for income taxes		-			(25	)		25			100			(6	)		(32	)		26			(600	)

Net loss from continuing operation		(2,708	)		(2,350	)		(358)			(15)			(6,630	)		(7,151	)		521			(7	)
Net income (loss) from discontinued operation, net of income taxes		28			(3,014	)		3,042			101			279			(5,015)			5,294			(106	)
Total net loss	$	(2,680	)	$	(5,364	)	$	2,684			50		$	(6,351	)	$	(12,166	)	$	5,815			(48)

Net Sales

The decrease in our net sales of 37% and decrease of 22% for the three and nine month period ended September 30, 2024, respectively, compared to the same period in 2023 was primarily due to supply chain issues on our top-selling, high-margin products.

Gross Profit

The overall gross profit decrease of 52% and decrease of 32% for the three and nine month period ended September 30, 2024, respectively, compared to the same period in 2023 was primarily due to supply chain issues on our top-selling, high-margin products and a decreased demand in the first three months of 2024 from major retailers on our high-margin products.

Selling Expenses

Our selling expenses decreased by 63% and 63% for the three and nine month period ended September 30, 2024, respectively, compared to the same period in 2023, primarily due to the decrease of certain advertising costs including reduction to our digital advertising and general marketing costs.

General and Administrative Expenses

For the three month period ended September 30, 2024, our general and administrative expenses increased by 6% 2023 primarily due to a lease impairment. The decrease by 18% in our general and administrative expenses for the nine months ended September 30, 2024 compared to the same period in 2023 was primarily due to decreases in salary and wages, as well as right-sizing of other operational expenses.

Interest Expense, Net

Our interest expense, net decreased by 7% and 8% for the three and nine month period ended September 30, 2024 compared to the same period in 2023, respectively, which was primarily due to a decrease in the cost of lending and associated interest fees.

Other Income

The decrease of other income of $16 thousand for the three months ended September 30, 2024 compared to the same period in 2023 was due to repayments in 2023 from a vendor for work never completed. The decrease in other income of $6 thousand for the nine months ended September 30, 2024 compared to the same period in 2023 was related to reimbursements in 2023 of certain rental expenses associated with our Tampa sublease for prior year charges and a smaller 2024 reimbursement of charges for workers compensation insurance.

Liquidity and Capital Resources

At September 30, 2024, we had an accumulated deficit of $376.5 million primarily because of our history of operating losses.We had a working capital deficiency of $146.6 million at September 30, 2024. Losses have been funded primarily through the issuance of common stock and warrants, borrowings from our stockholders, and third-party debt. As of September 30, 2024, we had cash of $0.0 million. Cash provided by operating activities was $0.63 million for the nine months ended September 30, 2024. During the nine months ended September 30, 2024, we had repayments to our revolving credit facility of $0.6 million.

Our total liabilities increased by $5.0 million to $153.0 million at September 30, 2024 from $148.0 million at December 31, 2023 primarily due to an increase of $4.9 million in accrued interest; partially offset by a decreaseof $0.6 million in notes payable and current portion of long-term debt.

Cash Flows from Operating, Investing and Financing Activities

Net cash provided by operating activities was $0.63 million for the nine months ended September 30, 2024 as a result of our net loss of $6.4 million,and an increase in net operating assets and liabilities of $7.0 million. By comparison, for the nine months ended September 30, 2023, net cash provided by operating activities was $1.2 million as a result of our net loss of $12.2 million and an increase in net operating assets and liabilities of $9.4million, and other non-cash expenses totaling $0.4 million net.

Net cash used in financing activities was $0.6 million for the nine months ended September 30, 2024, consisting of net repayments of $0.6 million to our revolving credit facility. Net cash used in financing activities was $2.0 million for the nine months ended September 30, 2023, consisting of net repayments of $2.0 million under our revolving credit facility.

Ongoing Funding Requirements

We will need additional funding from our revolving credit facility to continue supporting our operations during the next twelve months. However, we cannot predict whether future borrowings will be available to us under our credit facility and future developments associated with the current economic environment will materially affect our long-term liquidity position.

To protect our liquidity and cash position, we have taken a number of steps. In August of 2020, we obtained deferment letters from each of Great Harbor Capital, LLC, Little Harbor, LLC, and Golisano Holdings LLC, pursuant to which each lender agreed to defer all payments due under outstanding notes held by each lender through October 22, 2021 and agreed to refrain from declaring a default and/or exercising any remedies under the outstanding notes. Amendments to extend the maturity date and related payment deferrals of the aforementioned notes have not been executed and these notes are currently in default. We continue to anticipate extending the maturity dates and related payment deferrals with the lenders, but we cannot guarantee that such extensions and payment deferrals will be successfully obtained.

Until such time, if ever, as we can generate substantial product revenues, we intend to finance our cash needs through a combination of equity offerings, debt financing, collaborations, strategic alliances, and licensing arrangements. There can be no assurance that any of those sources of funding will be available when needed on acceptable terms or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of existing stockholders. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we raise funds through collaborations, strategic alliances, sales of assets, or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds through equity or debt financing or relationships with third parties when needed or on acceptable terms, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts; or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves. We currently have reduced the number of stock keep units and marketing efforts due to a lack of resources.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

This item is not applicable as we are currently considered a smaller reporting company.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our interim chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2024 pursuant to Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. On the basis of this review, our management, including our interim chief executive officer and chief financial officer, has concluded that as of the end of the period covered by this report, our disclosure controls and procedures were not effective to give reasonable assurance that the information required to be disclosed in our reports filed with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed in the reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, in a manner that allows timely decisions regarding required disclosure.

The Company has a lack of appropriate staffing in our accounting and information technology departments to address the Company’s ability to continue to close the books both timely and accurately and to meet internal control processes. The Company’s ability to address this material weakness is limited due to the lack of financing.

Although the Company is working to remediate this material weakness, it currently has not been resolved. Any failure to maintain or implement required new or improved controls, or any difficulties that may be encountered in their implementation, could result in additional material weaknesses, cause us to fail to meet our periodic or annual reporting obligations or result in material misstatements in our financial statements. Any such failure could also adversely affect the results of periodic management evaluations regarding the effectiveness of our internal control over financial reporting required under Section 404 of the Sarbanes Oxley Act of 2002 and the rules promulgated thereunder. The existence of material weaknesses could result in errors in our financial statements that could result in a restatement of those financial statements.

Limitations on Effectiveness of Controls and Procedures

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the exercise of judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial reporting, including ours, no matter how well designed and operated, can only provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and upgrade our internal controls as necessary or appropriate for our business, but we cannot assure you that such improvements will be sufficient to provide us with effective internal control over financial reporting.

Remediation in Internal Control over Financial Reporting

To address the material weakness related to appropriate staffing, the Company made efforts to hire, train and retain appropriate staff in the accounting, finance and information technology departments including technical accountants to support and alleviate the workload on the current team. The additional staff should help to proactively identify and account for transactions of a complex or non-routine nature, identify and reduce inefficiencies, and better identify weaknesses in internal controls. Furthermore, the additional staffing should be responsible for managing the day-to-day responsibilities of Sarbanes Oxley Act of 2002 compliance, including enhanced documentation of process and general controls. However, the Company has not yet been able to complete all of the training and additional staffing may still be required.

Changes in Internal Control over Financial Reporting

Except as discussed above, there were no changes in our internal controls over financial reporting during the quarter ended September 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

PART II. – OTHER INFORMATION

Item 1.

Legal Proceedings

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. As of the date of this Quarterly Report on Form 10-Q, the Company is not aware of any legal proceedings that could have a material impact on the Company’s financial condition, results of operations, or cash flows.

Item 1A.

Risk Factors

Risks and uncertainties that, if they were to occur, could materially adversely affect our business or cause our actual results to differ materially from the results contemplated by the forward-looking statements contained in this report and other public statements were set forth in the “Item 1A Risk Factors” section of our Annual Report on Form 10-K filed with the SEC on March 19, 2024.

Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial conditions and/or operating results.

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.

	None.

Item 3.

Defaults Upon Senior Securities.

As of September 30, 2024, we were in default for lack of compliance with the EBITDA-related financial covenant of the debt agreement with MidCap Financial Trust ("MidCap"). The amount due to MidCap for this revolving credit line is $0 as of September 30, 2024.

To date, we are in default of the promissory notes payable to Little Harbor, Great Harbor Capital, LLC and Golisano Holdings LLC which matured on October 22, 2021 (see Note 6 for further information). As of September 30, 2024, we had $8,037, $28,500 and $39,536 of indebtedness outstanding to Little Harbor, Great Harbor Capital, LLC and Golisano Holdings LLC, respectively.

Item 4.	Mine Safety Disclosures.

	Not applicable.

Item 5.	Other Information.

	None.

Item 6.

Exhibits.

The exhibits filed or furnished as part of this Quarterly Report on Form 10-Q are set forth below.

	Exhibit Number	Exhibit Description

	31.1*	Rule 13a-14(a)/15d-14(a) Certification.

	32.1**	Certification Pursuant to 18 U.S.C. Section 1350.

	101.INS	Inline XBRL Instance.

	101.SCH	Inline XBRL Taxonomy Extension Schema.

	101.CA	Inline XBRL Taxonomy Extension Calculation.

	101.DEF	Inline XBRL Taxonomy Extension Definition.

	101.LAB	Inline XBRL Taxonomy Extension Label.

	101.PRE	Inline XBRL Taxonomy Extension Presentation.

	104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

	* Filed herewith.
	** Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TWINLAB CONSOLIDATED HOLDINGS, INC.

Date: October 16, 2025	By:	/s/ Kyle Casey
		Kyle Casey
		Interim Chief Executive Officer and Chief Financial Officer (Interim Principal Executive Officer and Principal Financial Officer)

TABLE OF CONTENTS

TWINLAB CONSOLIDATED HOLDINGS, INC. 10-Q