Note 1 - Nature of Business

Organization

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.

Nature of Operations

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; diet and energy products sold under the Metabolife® brand name; and a full line of herbal teas sold under the Alvita® 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.

Going Concern

The accompanying 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 December 31, 2024, we had an accumulated deficit of $379,637. 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, and interest and refinancing charges associated with our debt refinancing, and impairment of our goodwill and intangible assets. Losses have been funded primarily through issuance of common stock and third-party or related party debt.

The Company is currently a defendant in litigation described in Note 13. The plaintiff seeks damages of $963,363, which significantly exceeds the Company’s available liquidity. The potential exposure from the litigation, if resolved unfavorably, could materially exceed the Company’s available financial resources.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date these financial statements are issued.  Management is evaluating various strategic alternatives, including settlement negotiations, additional capital raising, refinancing arrangements, and other restructuring options. There can be no assurance that these efforts will be successful.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Management is addressing operating issues through the following actions: focusing on growing the highest grossing products and brands,  reducing remaining operating costs, exploring bankruptcy options, and continuing to negotiate lower prices from major suppliers.  We believe that we will need additional capital to execute our business plan. If additional funding is required, there can be no assurance that sources of funding will be available when needed on acceptable terms or at all.

Wind-Down Activities and Asset Abandonments

In response to ongoing liquidity constraints, recurring operating losses, and the Company’s inability to access sufficient capital to support historical operating levels, management has undertaken actions to wind down certain operations and reduce the Company’s cost structure. These actions have included the cessation of operations of NutraScience Labs, Inc. (“NSL”), the abandonment or forfeiture of leased facilities, workforce reductions, and the elimination of certain operating activities that were no longer economically viable.

During 2023, the Company ceased operations associated with NSL. As part of this cessation, assets associated with NSL were determined to have minimal or no remaining economic value to the Company and were disposed of through abandonment. The operating results of NSL have been presented as discontinued operations in the accompanying consolidated financial statements. Assets and liabilities associated with discontinued operations are separately classified on the consolidated balance sheets as of December 31, 2024 and 2023.

In addition, during 2024 and subsequent to year‑end, the Company surrendered or forfeited multiple leased office facilities as it no longer had the ability or intent to continue occupying those locations. As a result, the Company recorded charges related to the impairment of right‑of‑use assets and continues to reflect remaining lease liabilities on the consolidated balance sheets. Certain of these lease obligations are in default, and the Company is subject to claims by landlords for unpaid rent and related costs, as further described in Note 13.

The carrying amounts of assets subject to abandonment or impairment were evaluated based on their estimated recoverability, taking into consideration the Company’s decision to cease or significantly curtail related operations, the absence of alternative uses, and the Company’s current financial condition. No amounts have been capitalized in anticipation of future operating recoveries or restructuring outcomes.

These wind‑down actions reflect management’s efforts to reduce ongoing cash outflows and preserve liquidity; however, the Company continues to have significant obligations, including lease liabilities, accrued interest, and debt obligations that are classified as current due to existing defaults. The Company’s ability to satisfy these obligations is subject to significant uncertainty. These conditions, together with the matters described above and elsewhere in these financial statements, raise substantial doubt about the Company’s ability to continue as a going concern.