UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.DC 20549

FORM 10-K/A10-K

(Amendment No. 1)

(Mark One)

☑

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

For the fiscal year ended December 31, 20182021

OR

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

For the transition period from _________________ to __________________

Commission File No.Number: 000-55181

Twinlab Consolidated Holdings, Inc.

(Exact name of registrant as specified in its charter)

(561) 443-4301

(Registrant’s Telephone Number, Including Area Code)telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

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

Common Stock par value $0.001 per share

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☑

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☑

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)submit such files). Yes ☑ No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

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"large accelerated filer,” “accelerated filer”" "accelerated filer", “smaller"smaller reporting company”,company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262 (b)) by the registered public accounting firm that prepared or issued its audit report.      ☐

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

The aggregate market value of common stock held by non-affiliates of the registrant based on the closing price for the registrant’s common stock onat June 30, 2018 (the last business day of2021 was $8,250,771 (computed by reference to the second quarter of the registrant’s current fiscal year), was $22,058,281.high/low price on such date).

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of April 15, 2019on March 23, 2022 was 255,643,828.259,092,833 shares.

EXPLANATORY NOTEDOCUMENTS INCORPORATED BY REFERENCE

None.

TABLE OF CONTENTS​

This Amendment No. 1 (the "Amendment") to the

FORWARD-LOOKING STATEMENTS

Statements in this Annual Report on Form 10-K/A10-K ("Report" or "10-K") that are not descriptions of historical facts are forward-looking statements that are based on management's current expectations and assumptions and are subject to risks and uncertainties. If such risks or uncertainties materialize or such assumptions prove incorrect, our business, operating results, financial condition and stock price could be materially negatively affected. In some cases, you can identify forward-looking statements by terminology including "anticipates," "believes," "can," "continue," "could," "estimates," "expects," "intends," "may," "plans," "potential," "predicts," "should," "will," "would" or the negative of these terms or other comparable terminology. Factors that could cause actual results to differ materially from those currently anticipated include those set forth in the section titled "Risk Factors" including, without limitation, risks relating to:

We operate in a very competitive and rapidly changing environment and new risks emerge from time to time. As a result, it is being filednot possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. The forward-looking statements included in this Report speak only as of the date hereof, and except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason after the date of this Report to conform these statements to actual results or to changes in our expectations.

General Development of Business

Twinlab Consolidated Holdings, Inc. (references to “we”, “our”, “us”, the “company”, or “TCH”) was incorporated on October 24, 2013 under the laws of the State of Nevada.

In September 2014, TCH became a holding company with the completion of a Plan of Merger (“Merger”) between Twinlab Consolidation Corporation (“TCC”) and a subsidiary of TCH with TCC surviving the Merger as a wholly-owned subsidiary of TCH. Our operational focus redirected to TCC which, through its operating subsidiaries, developed, manufactured, and marketed high-quality, science-based nutritional supplements, as well as through our consolidation strategy of additional acquisitions and integration of acquired companies, as more fully described below under "Business Strategy." As part of such strategy, following the Merger, we focused significantly on successfully obtaining funding for and completing two acquisitions for which TCC had acquired options prior to the Merger, and which, in combination with the TCC operating businesses acquired in the Merger, form the foundation for our consolidation and growth strategy. The first was the acquisition of the customer relationships of Nutricap Labs, LLC ("Nutricap"), a provider of dietary supplement contract manufacturing services, into our subsidiary NutraScience Labs, Inc. ("NutraScience") on February 6, 2015.  The second was the acquisition of 100% of the equity interests of Organic Holdings, LLC ("Organic Holdings"), a market leader in the healthy aging and beauty from within categories and owner of the award-winning Reserveage™ Nutrition brand, on October 5, 2015. With this acquisition, we significantly expanded our brand portfolio through the addition of a market leader for resveratrol and collagen supplements in the expanding healthy aging and beauty from within categories. The addition of innovative new brands and concepts is what ties together the TCC family of brands.

TCC was incorporated on October 1, 2013 in the state of Delaware. TCC was formed to affect a consolidation strategy in the fragmented vitamin, mineral, herbal and other nutritional supplements sectors of the health and wellness industry (the "Company""H&W Industry"). Since TCC's formation, we have executed on this strategy to capitalize on the opportunity for consolidation that we believe exists in the H&W Industry.

In August 2014, TCC acquired Idea Sphere Inc., a Michigan corporation ("Idea Sphere"), and its subsidiaries. Also in August 2014, the name of Idea Sphere was changed to Twinlab Holdings, Inc. (“THI”), which is a holding company that owns and operates Twinlab Corporation, Inc., a marketer of high-quality, science-based nutritional supplements under a number of brand names.

THI was incorporated on April 10, 2001. In November 2005, THI completed the acquisition of Metabolife International, Inc. and its subsidiary Alpine Health Products, LLC. Through this acquisition, THI expanded its presence in the diet and energy category. In September 2006, THI acquired the assets of Cole Water Company, LLC ("Cole Water"), which owned an aquifer with a recharging spring of naturally calcium-enriched water. This transaction included the acquisition of real property at 51 Strawtown Pike, Peru, Indiana that holds the natural aquifer as well as a bottling facility. Cole Water has marketed calcium-enriched water under a number of brand names. In December 2013, THI discontinued operations of its water products line. The facility was later sold in March 2020.

We maintain our principal executive offices at 4800 T-Rex Avenue, Suite 225, Boca Raton, Florida, which we moved in September 2021. TCC's wholly owned subsidiaries are THI, NutraScience, NutraScience Labs IP Corporation, and Organic Holdings. THI's wholly owned subsidiaries are Twinlab Corporation (sometimes referred to herein as "Twinlab"), which markets nutritional supplements under its own brands and for others, and ISI Brands, Inc. ("ISI"), which holds title to the intellectual property used in the marketing activities of Twinlab Corporation. Organic Holdings' wholly owned operating subsidiaries are CocoaWell, LLC, Fembody, LLC, InnoVitamin Organics, LLC, Joie Essance, LLC, Organics Management LLC d/b/a Reserveage Nutrition, Re-Body, LLC, Reserve Life Organics, LLC, ResVitale, LLC, Reserve Life Nutrition, L.L.C., and Innovita Specialty Distribution LLC.  Reserveage Nutrition and ResVitale, LLC, both market nutritional supplements under their own respective brands.  Reserveage Nutrition also markets a line of skincare products.  InnoVitamin Organics, LLC, holds title to the intellectual property used in the marketing activities of Reserveage Nutrition and ResVitale, LLC.

For convenience in this report, the terms "Company," "we" and "us" may be used to refer to Twinlab Consolidated Holdings, Inc. and/or its subsidiaries, except where indicated otherwise, and the term "TCC" may be used to refer to Twinlab Consolidation Corporation and/or its subsidiaries.

Business Overview

General

We are a marketer, distributor, and direct-to-consumer 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.

Through NutraScience Labs we also provide services between private label distributors and contract manufacturers. Our services business involves the facilitation of manufacture of custom products to the specifications of a customer who requires finished products under the customer’s own brand name. We do not market these private label products as our business is to sell the products to the customer, who then markets and sells the products to retailers or end consumers.

Business Strategy

We target consumers searching for high quality nutritional supplements and other natural products. We believe many of these consumers shop in sales channels that offer meaningful education, service, and support to their customers.

The primary channel that offers this type of support to consumers in the United States has been the Specialty and Health and Natural Food channel ("HNF"). Our primary focus and strength has been, and remains on, this channel. This strategy has enabled us to benefit from the growth of the HNF channel. The HNF channel consists of approximately 35,500 retailers, including (i) independent health and natural food stores, (ii) health and natural food stores affiliated with local, regional and national health and natural food chains (including health and natural food store chains, such as Whole Foods Market, and vitamin store chains, such as The Vitamin Shoppe and Vitamin World) and (iii) GNC stores. The HNF channel principally caters to our primary target consumers: those who desire product education, service and high-quality nutritional supplements and other natural products.

We develop, market and distribute our branded products, particularly the Twinlab®, Reserveage™, ResVitale®, Alvita® and Metabolife® brands. We market our branded products through a combination of our own sales force and independent brokers. We continue to seek out partners that have strong customer relationships, reach into our target channels and have acted to realign our independent broker network to gain market share. We believe the key to the strength of our brands and market position is innovation, as we seek to be a market leader in the development of new and innovative products. We believe that we benefit from greater customer and product diversification than many of our competitors due to our research and development, and sales and marketing capabilities.

We also believe that consumers seeking high quality products are also purchasing them through other channels, such as health care practitioners and direct to consumer channels. We continue to seek opportunities to reach our target consumers through these and additional channels.

An integral part of our business strategy has been to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. We believe that the consolidation and integration of these acquired businesses provides ongoing financial and operational synergies through increased scale and market penetration, as well as strengthened customer relationships. Our near-term focus is on harnessing the respective strengths of our existing businesses, while continuing to seek longer-term opportunities that will either strengthen our product offering, and/or expand our distribution and geographic reach.

Industry

We believe that the wellness and beauty market reached its present size due to a number of factors, including (i) interest in immune health due to the pandemic as well as living longer and living well, (ii) the publication of research findings supporting the positive health effects of certain nutritional supplements, and (iii) the growth of the wellness conscious millennial population, combined with the aging of the "Baby Boom" and Gen X generations making a mindful choice to purchase more nutritional supplements and natural foods.

Products

We formulate and market nutritional supplements. Our products include vitamins, minerals, resveratrol, collagen, keratin, skincare and sports nutrition products primarily under the Twinlab®, Reserveage™ and ResVitale® brands. We also market and sell diet and energy products under the Metabolife® brand and a full line of herbal teas under the Alvita® brand. To accommodate consumer preferences, our products come in various formulations and delivery forms, including capsules, tablets, softgels, chewables, stick packs, liquids, and powders.

We currently market our products through a multiple brand strategy to offer more customer choice and to encourage retailers to allocate additional shelf space to our brands. We have worked to enhance the strength of our brands by instituting business strategies that have included (i) consolidating our product assortment to focus on top selling, profitable products, (ii) engaging independent brokers to support sales across the United States, (iii) conducting cost savings initiatives to identify opportunities for improved margin, (iv) reviewing competitive product pricing to make recommendations for market pricing alignment and (v) completing product certifications to increase our competitive position. We believe our current portfolio of products resonates well with target consumers and retailers and provides us with significant competitive differentiation.

Sales, Marketing and Promotion

Our marketing and sales efforts are directed to promote demand for our products by educating retailers, who in turn educate their customers, on the quality and attributes of our natural nutritional supplements and other products. Our branded products are sold globally, and our primary market is the United States where our key sales channel is HNF. We believe that our products are attractive to HNF retailers due to factors such as the strength of our brand names, the breadth of our product offerings, the quality and efficacy of our products and the availability of service, sales support and educational materials. We have developed numerous Internet sites (including www.alvita.com, www.metabolife.com, www.reserveage.com, www.resvitale.com, and www.twinlab.com) that provide information about our branded lines and the various products within each brand. We have included our Internet sites here and elsewhere only as an inactive textual reference. The information contained on our Internet sites are not incorporated by reference into this Report.

Sales

We employ a sales force dedicated to each of the individual sales channels in which we sell our products. The dynamics and buying patterns of the various channels require strategic initiatives and tactics. Our sales strategy includes several models that are applied to best serve the respective channels where our products are sold:

Marketing and Promotion

TCC markets to consumers shopping through numerous sales channels and online e-tailers. Each channel demands a different approach that meets its distinctive needs. The following is a brief overview of the channels in which we market our varied brands:

Marketing Efforts by Brand

Reserveage™ Nutrition

Reserveage™ Nutrition uses consistent messaging to emphasize our use of premium and traceable ingredients that are backed by published clinical studies. The brand takes a 360-degree marketing approach to drive sales to our retail partners. The focus is to grow brand awareness and increase sales directed at both the retail community and our end consumers.

Marketing strategies for Reserveage™ Nutrition include two main initiatives: 1) introduce new users to our core categories – anti-aging and beauty from within – through innovation and expanded categories, product trial, advertising and promotional programs and 2) increase in-store education through dedicated brand ambassadors in strategic markets.

Marketing and promotional efforts for Reserveage™ Nutrition focus on both trade and consumer tactics:

Public Relations/Influencers – Outreach to media and influencers has resulted in features and reviews in online and print media channels. This channel is especially important in our beauty from within line of products, where online influencers can both positively or negatively affect the success of a product.

Sampling – Many products are immediately experiential either because of their taste or effect. We use samples and retail demo programs to allow for trial and education of our products. These are generally conducted in-store using our own brand ambassadors or third-party representatives.

Retail Activation – Utilizing on-shelf promotional tactics, including coupons and associate engagement tools, to generate awareness and differentiate our brand.

Consumer and Trade Print Ads – Print advertising is coordinated with product introductions.

Digital/Social Activation - Target and retarget prospective consumers through search engine optimization, search engine marketing, and social media campaigns.

ResVitale®

The ResVitale® brand of dietary supplements is marketed and sold to GNC and online. Marketing strategies for the ResVitale® brand include two main initiatives: 1) introduce new users to our core categories – anti-aging and beauty from within – through awareness campaigns and product trial and 2) increase in-store education in strategic markets.

Twinlab® Brand Vitamins

Twinlab® is a heritage brand of vitamins that has been in the market for over 50 years and carries a great deal of brand awareness amongst health and natural food consumers. Twinlab® is predominantly sold in HNF, eTailers and Internationally.

Marketing strategies for Twinlab® include two main initiatives: 1) awareness and trial of key existing products and 2) awareness, trial and education for new products.

Marketing and promotional efforts for Twinlab® focus on both trade and consumer tactics:

Public Relations and Bloggers – Outreach to media and blogger influencers has resulted in features and reviews in online and print media channels.

Retailer Promotions – In-store promotional programs can drive consumer awareness when they are making purchase decisions. 

Consumer and Trade Print Ads – Print advertising is coordinated with product introductions.

Trade Shows – Retailer relations and new product launches are the main areas of focus during trade shows. Display and promotion of products at several industry trade shows annually is a key component of support for Twinlab®.

Alvita® Teas

Started in 1922, Alvita® Teas is an herbal therapeutic tea line with a rich history and loyal customer base. The herb alfalfa, long known for its beneficial nutrients, was packaged in tea bags and sold to an emerging health food market. This product became known as Alvita®. After reaching 100 years, Alvita® has become the oldest herbal tea brand. Today, Alvita® has more than 30 single ingredient high potency teas, each with distinct health benefits. Each tea is committed to third party certifications and offers the purity standards of Organic, Gluten-free, non-GMO, caffeine free and Kosher certifications.

Marketing tactics for Alvita® include retailer promotions, coupons and trade show participation.

NutraScience Labs, Inc.

NutraScience Labs helps dietary supplement companies bring high-quality formulations to the market by delivering best-in-class, turnkey manufacturing, packaging design, and fulfillment services “under one roof”. Marketing activities for NutraScience Labs focuses on promoting the services it offers with a focus on acquiring new customers through digital marketing and trade media and not advertising of products.

Research and Development; Quality Assurance

We have a commitment to research and development (“R&D”) and to amendintroducing innovative products to correspond with consumer trends and scientific research. We believe that product quality and innovation are fundamental to our long-term growth and success. Through our R&D and quality assurance ("QA") efforts, as well as our relationships with select and current Good Manufacturing Practices (“cGMPs”) audited contract manufacturing partners, we seek to (i) test the Annual Reportsafety, purity and potency of products, (ii) develop testing methods for ensuring and verifying the consistency of the dosage of ingredients included in our products, (iii) develop new, more effective product delivery forms and (iv) develop new products either by combining existing ingredients used in dietary supplements or identifying new ingredients that can be used in dietary supplements. Our efforts are designed to lead not only to the development of new and improved products, but also to ensure effective manufacturing quality assurance measures.

We conduct research and formulation aspects of R&D in-house, and also work with contract manufacturers and third-party laboratories to perform testing and other aspects of R&D. We currently employ various professionals in R&D and quality assurance with expertise in, among other things, nutrition, herbal medicine, and chemistry.

Our quality assurance and safety programs seek to ensure the safety and superior quality of our products and that they are manufactured in accordance with cGMPs. We have always had a focus on Form 10-Ksafety, quality, efficacy and compliance with law. We always conduct a comprehensive cGMP audit of to qualify a contract manufacture before conducting business with them.

Significant Customers

Sales to our top three customers aggregated to approximately 26% and 25% of total consolidated sales in 2021 and 2020, respectively. Sales to one of those customers were approximately 11% and 10% of total sales in 2021 and 2020, respectively. Accounts receivable from these customers were approximately 22% and 23% of total accounts receivable as of December 31, 2021 and 2020, respectively. 

Manufacturing

Our products are manufactured by highly qualified third-party providers located primarily in the U.S. These contract manufacturers do business with us under both short- and long-term contracts depending on our needs. We do not manufacture any of the basic materials used in packaging (bottles, boxes, shipping cartons, caps, tamper resistant films, etc.). We believe that increasing manufacturing capabilities through our contract manufacturer partners provides us with competitive advantages.

In 2018, we transitioned out of manufacturing in the Company’s Utah manufacturing facility and leveraged the supply chain of the Company’s successful subsidiary, NutraScience Labs., and third-party logistics providers. This allows us to utilize exclusive technologies and processes that contribute to product innovation, while still providing the high-quality products our customers know us for.

Materials and Suppliers

We employ a supply chain staff that works with marketing, product development, formulations and quality assurance personnel to oversee contract manufacturers and source raw materials for products as well as other items purchased by us. Raw materials are sourced by a variety of domestically and internationally approved suppliers principally from the United States, Europe and China. We believe our relationships with our principal suppliers are good. Our top two suppliers accounted for 46% of our purchases for the year ended December 31, 2018 filed2021. Whenever possible, we have adopted dual sourcing for raw materials to mitigate the impact of raw materials shortages that happen from time to time.

Government Regulation

The formulation, manufacturing, packaging, labeling, advertising, distribution and sale of our products are subject to regulation by a number of federal agencies, including the Food and Drug Administration ("FDA"), the Federal Trade Commission ("FTC"), the Consumer Product Safety Commission ("CPSC"), the United States Department of Agriculture (“USDA”), Department of Labor Occupational Safety and Health Agency (“OSHA”), Department of Homeland Security Customs and Boarder Protection (“CBP”), Department of Transportation (“DOT”), and the Environmental Protection Agency (“EPA”), by various governmental agencies for the states and localities in which our products are sold, and by governmental agencies in countries outside the United States in which our products are sold.

The FDA regulates the formulation, manufacturing, packaging, labeling, distribution and sale of food, including dietary supplements, cosmetics, and over-the-counter ("OTC") drugs. The FTC regulates the advertising of these products. Federal agencies, primarily the FDA and the FTC, have a variety of procedures and enforcement remedies available to them, including initiating investigations, issuing warning letters and cease-and-desist orders, requiring corrective labeling or advertising, requiring consumer redress, seeking injunctive relief or product seizures, imposing civil penalties or commencing criminal prosecution. In addition, certain state agencies have similar authority.

The Dietary Supplement Health and Education Act (“DSHEA”) was enacted in 1994, amending the Federal Food, Drug, and Cosmetic Act (“FDCA”). Dietary ingredients marketed in the United States before October 15, 1994 may be marketed without the submission of a "new dietary ingredient" premarket notification to the FDA. New dietary ingredients, with exception, not marketed in the United States before October 15, 1994, are required to be submitted to the FDA at least seventy-five days before marketing. In addition, dietary ingredients and applicable excipients on the FDA’s GRAS list (Generally Regarded As Safe) may be included in dietary supplement formulations. Among other things, DSHEA prevents the FDA from regulating dietary ingredients in dietary supplements as "food additives" and allows the use of statements of structure function claims on product labels and in labeling, so long as those statements do not constitute disease claims and are truthful and sufficiently substantiated. Some of our products are also regulated as conventional foods under the Nutrition Labeling and Education Act of 1990 (“NLEA”).

The FDA issued a Final Rule on GMPs (Good Manufacturing Practices) for dietary supplements in June 2007. The GMPs cover manufacturers, packagers, labelers, distributors, and holders of finished dietary supplement products, including dietary supplement products manufactured outside the United States that are imported for sale into the United States. Among other things, these GMPs require identity testing on all incoming dietary ingredients, call for a "scientifically valid system" for ensuring finished products meet all specifications, include requirements related to process controls such as statistical sampling of finished batches for testing and requirements for written procedures and require extensive recordkeeping.

The Food Allergen Labeling and Consumer Protection Act of 2004 (FALCPA) addresses, among other issues, the labeling of foods (including dietary supplements) that contain certain food allergens. Under FALCPA, a "major food allergen" is an ingredient that contains protein derived from one of the following: milk, egg, fish, Crustacean shellfish, tree nuts, wheat, peanuts or soybeans.

The Dietary Supplement and Nonprescription Drug Consumer Protection Act went into effect in December 2007. The law requires, among other things, that companies that manufacture or distribute nonprescription drugs or dietary supplements report serious adverse events allegedly associated with their products to the FDA and institute recordkeeping requirements for all adverse events (serious and non-serious).

The Consumer Product Safety Improvement Act of 2008 ("CPSIA") primarily addresses children's product safety but also improves the administrative process of the CPSC. Among other things, the CPSC/CPSIA impact on dietary supplements is principally in requirements for use of child resistant closures, performance validation of such closures, and requirements for packaging and labeling of iron-containing products. The CPSIA also requires testing and certification of certain products and enhances the CPSC's authority to order recalls. 

The FDA Food Safety Modernization Act ("FSMA"), enacted in January 2011, amended the FDCA to significantly enhance the FDA's authority over various aspects of food regulation. The FSMA granted the FDA mandatory recall authority when the FDA determines there is a reasonable probability that a food is adulterated or misbranded and that the use of, or exposure to, the food will cause serious adverse health consequences or death to humans or animals. Other changes include, but are not limited to, the FDA's expanded access to records; the authority to suspend food facility registrations and require high risk imported food to be accompanied by a certification; stronger authority to administratively detain food; the authority to refuse admission of an imported food if it is from a foreign establishment to which a U.S. inspector is refused entry for an inspection; and the requirement that importers verify that the foods they import meet domestic standards.

Although dietary supplement facilities are exempt from preventive controls requirements, dietary ingredient facilities might not qualify for the exemption. FDA's proposed preventative controls regulations would require that facilities develop and implement preventive controls to assure that identified hazards are significantly minimized or prevented, monitor the effectiveness of the preventive controls, and maintain numerous records related to those controls. 

California Proposition 65 (“Prop 65”) is particularly impactful and imposing among state regulations. Its impact on product formulations, testing, and labeling are extensive and significant. Because of national brand distribution, the impact of Prop 65 is far reaching. TCC has several Prop 65 consent agreements that afford compliance protections.

The sale of our products in countries outside the United States is regulated by the governments of those countries. Our plans to commence or expand sales in those countries may be prevented or delayed or even suspended by such regulations or regulators in those countries. In countries in which we have distributors, compliance with such regulations is generally undertaken by our distributors, but even in these cases we often cooperate by providing information to distributors. In the case of Canada, TCC complies with Health Canada’s Natural Health Products Directorate (“NHPD”) with “site licensing” of the TCC manufacturing plant and registration of products.

Competition

Health and Natural Foods

The Natural Products Market and the Vitamin, Minerals, and Supplements Market (the “VMS Market”) are highly competitive. Our principal competitors in the VMS Market that sell to the health and natural foods channel include a number of large, nationally-known brands (such as Bluebonnet, Country Life, Enzymatic Therapy, Garden of Life, Jarrow Formulas, Natural Factors, Nature's Plus, Nature's Way, Nordic Naturals, Now Foods, New Chapter and Solgar) and many smaller brands, manufacturers and distributors of nutritional supplements. Because both the health and natural foods market and the VMS Market generally have low barriers to entry, additional competitors enter the market regularly.

Private label products of our customers also provide competition to our products. Whole Foods Market, The Vitamin Shoppe, Sprouts Farmers Market, Natural Grocers and many health and natural food stores also sell a portion of their offerings under their own private labels. Private label products are often sold at a discount to branded products.

We believe that stores in the HNF channel are increasingly likely to align themselves with those companies that offer a wide variety of high-quality products, have a loyal consumer base, support their brands with strong marketing and education programs and provide consistently high levels of customer service. We believe that we compete favorably with other nutritional supplement companies because of our comprehensive line of products and brands, premium brand names, commitment to quality, ability to rapidly introduce innovative products, competitive pricing, strong and effective sales force, distribution strategy and sophisticated marketing and promotional support. The wide variety and diversity of the forms, potencies and categories of our products are important points of differentiation between us and many of our competitors.

Mass Market

Metabolife® is our primary focus in the mass market retail channel. It is possible that as an increasing number of companies (or brands) sell nutritional supplement products and other natural products in the mass market channels, such as Pharmavite (Nature Made), KKR & Co. L.P. (Nature's Bounty), Reckitt Benckiser Group (Schiff), Hain Celestial and Church & Dwight, our mass market brands will be negatively impacted. In addition, several major pharmaceutical companies continue to offer nutritional supplement lines in the mass market channel, including Pfizer (Centrum) and Bayer (One-A-Day).

Intellectual Property

We own numerous trademarks that have been registered with the United States Patent and Trademark Office and have filed applications to register additional trademarks. In addition, we claim domestic trademark and service mark rights in numerous additional marks that we use. We own a number of trademark registrations in countries outside the United States. Federally registered trademarks in the United States have a perpetual life, as long as they are maintained and renewed on a timely basis and used properly as trademarks, subject to the rights of third parties to seek cancellation of the trademarks if they claim priority or confusion of usage. Most foreign trademark offices use similar trademark renewal processes. Additionally, we hold several patents that have been registered with the United States Patent and Trademark Office and may file additional applications. We regard our trademarks, patents and other proprietary rights as valuable assets and believe they make a significant positive contribution to the marketing of our products.

We protect our legal rights concerning our intellectual property by appropriate legal action. We rely on common law trademark rights to protect our unregistered trademarks. Common law trademark rights do not provide us with the same level of protection as afforded by a United States federal registration of a trademark. In addition, common law trademark rights are limited to the geographic area in which the trademark is actually used. We have registered and intend to register certain trademarks in certain limited jurisdictions outside the United States where our products are sold, but we may not register all or even some of our trademarks in every country in which we conduct business or intend to conduct business.

We sell many products that include patented ingredients. We purchase these ingredients from parties that we believe are licensed by the patent owner to sell and manufacture goods with the patent ingredients. However, there are a large number of patents that have been granted or applied for in the dietary supplement industry, and there may be an increased possibility that third parties will seek to compel us and our competitors to purchase their "patented ingredients" directly from them under threat that patent ingredient we properly obtain, infringes on their patent rights. We generally obtain indemnification from the patent owner through separate end user licensing agreements to increase our protection from these third parties or “non-practicing entities,” should they try to enforce such claim through litigation. The cost of these patented ingredients is typically higher than the cost of non-patented ingredients.

Employees

As of March 23, 2022, we had approximately 66 full-time employees, of which 4 were independent contractors. None of our employees are represented by a labor union or covered by a collective bargaining agreement. We consider our relationship with our employees to be good.

Our business, financial condition, results of operations, cash flows, prospects, and the prevailing market price and performance of our common stock may be adversely affected by a number of factors, including the matters discussed below. Certain statements and information set forth in this Annual Report on Form 10-K, including without limitation statements regarding our strategic initiatives and expectations for the future performance of our business, as well as other written or oral statements made from time to time by us, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact, including statements that describe our objectives, plans, or goals, are, or may be deemed to be, forward-looking statements. Known and unknown risks, uncertainties, and other factors may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these statements. The risks, uncertainties, and other factors that our stockholders and prospective investors should consider include the following:

Market and Channel Risks

Geopolitical issues, conflicts and other global events could adversely affect our results of operations and financial condition.

Our business is subject to global political issues and conflicts. Such political issues and conflicts could have a material adverse effect on our results of operations and financial condition if they escalate in areas in which we do business or to the extent that they impact the global macroeconomic systems. In addition, changes in and adverse actions by governments in foreign markets in which we do business could have a material adverse effect on our results of operations and financial condition. For example, the recent and continuing conflict arising from the invasion of Russia into Ukraine could adversely impact macroeconomic conditions, give rise to regional instability and result in heightened economic tariffs, sanctions and import-export restrictions from the U.S. and the international community in a manner that adversely affects us, financial condition, results of operations, cash flows and performance.

Adverse economic conditions related to the COVID-19 pandemic may harm our business.

Inflation or other changes in economic conditions, related to the economic impact of the novel coronavirus, or COVID-19 and restrictions/limitations on the types of businesses that may operate and the adoption of  restrictions on public gatherings, including, “shelter-in-place” rules, that affect demand for nutritional supplements could adversely affect our revenue. Uncertainty about current global economic conditions poses a risk as consumers and businesses may postpone spending in response to tighter credit markets, negative financial news and/or declines in income or asset values, each of which could have a material negative effect on the demand for our products. Many experts predict that the outbreak will trigger, or even has already triggered, a period of global economic slowdown or a global recession.

The COVID-19 pandemic could have material and adverse effects on our financial condition, results of operations and cash flows in the near term due to, but not limited to, the following:

The extent to which the COVID-19 pandemic impacts our operations and those of our customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others.

The COVID-19 pandemic, and the future outbreak of other highly infectious or contagious diseases, could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.

Since being reported in December 2019, COVID-19 has spread globally, including to every state in the United States. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19.

The COVID-19 pandemic has had, and another pandemic in the future could have, repercussions across regional and global economies and financial markets. The outbreak of COVID-19 in many countries, including the United States, has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and, as cases of COVID-19 have continued to be identified in additional countries, many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel.

Certain states and cities, including where our principal place of business is located, reacted by instituting quarantines, restrictions on travel, “shelter in place” rules, and/or restrictions on types of business that may continue to operate. While the majority of these restrictions have been lifted or significantly curtailed, the Company cannot predict if future impacts of COVID-19, including the emergence of new variants, will lead to the reinstitution of similar restrictions or the implementation of new restrictions. The COVID-19 pandemic has negatively impacted almost every industry directly or indirectly, including industries in which the Company and our customers and business partners operate. The effects of an ongoing period of remote work, could strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, and impair our ability to manage our business. The COVID-19 pandemic, or a future pandemic, could also have material and adverse effects on our ability to successfully operate and on our financial condition, results of operations and cash flows due to, among other factors:

The extent to which the COVID-19 pandemic impacts our operations and those of our customers will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Additional closures by our customers of their stores could reduce our cash flows.

The rapid development and fluidity of this situation precludes any prediction as to the full adverse impact of the COVID-19 pandemic. Nevertheless, the COVID-19 pandemic presents material uncertainty and risk with respect to our financial condition, results of operations, cash flows and performance.

Our success is linked to the size and growth rate of the vitamin, mineral and supplement market and an adverse change in the size or growth rate of that market could have a material adverse effect on us.

An adverse change in size or growth rate of the vitamin, mineral and supplement market could have a material adverse effect on us. Underlying market conditions are subject to change based on economic conditions, consumer preferences, the impact of COVID-19 and other factors that are beyond our control, including media attention and scientific research, which may be positive or negative.

Because a substantial portion of our sales are to or through health food stores, we are dependent to a large degree upon the success of this channel as well as the success of specific retailers in the channel.

We sell primarily in the United States and, in this market, a significant portion of our sales are through health food stores. Because of this, we are dependent to a large degree upon the success of that channel as well as the success of specific retailers in the channel. There are some large chains of health food stores, such as Whole Foods Market and The Vitamin Shoppe, but many health food stores are individual stores or very small chains. We rely on these health food stores to purchase, market, and sell our products. A fair portion of our success is dependent, to a large degree, on the growth and success of the health and natural foods channel, which is outside our control. There can be no assurance that the health and natural foods channel will be able to grow or prosper as it faces price and service pressure from other channels, including the mass market. There can be no assurance that retailers in the health and natural foods channel, in the aggregate, will respond or continue to respond to our stated loyalty to this channel.

We are highly dependent upon consumers' perception of the safety and quality of our products as well as similar products distributed by other companies in our industry, and adverse publicity and negative public perception regarding particular ingredients or products or our industry in general could limit our ability to increase revenue and grow our business.

Decisions about purchasing made by consumers of our products may be affected by adverse publicity or negative public perception regarding particular ingredients or products or our industry in general. This negative public perception may include publicity regarding the legality or quality of particular ingredients or products in general or of other companies or our products or ingredients specifically. Negative public perception may also arise from regulatory investigations, regardless of whether those investigations involve us. We are highly dependent upon consumers' perception of the safety and quality of our products as well as similar products distributed by other companies. Thus, the mere publication of reports asserting that such products may be harmful could have a material adverse effect on us, regardless of whether these reports are scientifically supported. Publicity related to nutritional supplements may also result in increased regulatory scrutiny of our industry and/or the healthy foods industry. Adverse publicity may have a material adverse effect on our business, financial condition and results of operations. There can be no assurance of future favorable scientific results and media attention or of the absence of unfavorable or inconsistent findings.

We face intense competition from competitors that are larger, more established and that possess greater resources than we do, and if we are unable to compete effectively, we may be unable to maintain sufficient market share to sustain profitability.

Numerous manufacturers and retailers compete actively for consumers. There can be no assurance that we will be able to compete in this intensely competitive environment. In addition, nutritional supplements can be purchased in a wide variety of channels of distribution. These channels include mass market retail stores and the Internet. Because these markets generally have low barriers to entry, additional competitors could enter the market at any time. Private label products of our customers also provide competition to our products. Additional national or international companies may seek in the future to enter or to increase their presence in the healthy foods industry or the vitamin, mineral and supplement market. Increased competition in either or both could have a material adverse effect on us. 

The nutritional supplement industry increasingly relies on intellectual property rights and although we seek to ensure that we do not infringe the intellectual property rights of others, there can be no assurance that third parties will not assert intellectual property infringement claims against us, which claims may result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition and operating results. Our inability to acquire, protect or maintain our intellectual property could harm our ability to compete or grow.

Recently it has become more and more common for suppliers and competitors to apply for patents or develop proprietary technologies and processes. We seek to ensure that we do not infringe the intellectual property rights of others, but there can be no assurance that third parties will not assert intellectual property infringement claims against us. These developments could prevent us from offering or supplying competitive products or ingredients in the marketplace. They could also result in litigation or threatened litigation against us related to alleged or actual infringement of third-party rights. If an infringement claim is asserted or litigation is pursued, we may be required to obtain a license of rights, pay royalties on a retrospective or prospective basis or terminate our manufacturing and marketing of our products that are alleged to have infringed. Litigation with respect to such matters could result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition and results of operations. We have numerous United States and foreign trademarks and service marks. There can be no assurance that the protection afforded by these trademarks and service marks will provide us with a competitive advantage or that we will be able to assert our intellectual property rights in infringement actions.

We may be affected adversely by future increases to utility and fuel costs.

Future increases in fuel costs may affect our results of operations adversely in that consumer traffic to health and natural food stores may be reduced and the costs of our sales may increase as we incur higher fuel costs in connection with our manufacturing operations and the transportation of goods from our warehouse and distribution facilities to health and natural food stores. Also, increases in oil costs can affect the cost of our raw materials and components and the competitive environment in which we operate may limit our ability to recover higher costs resulting from future increases in fuel prices.

Business Strategy and Operational Risks

If we are unable to retain key personnel, our ability to manage our business effectively and continue our growth could be negatively impacted.

Key management employees of the company and its subsidiaries include Daniel DiPofi as the Chief Executive Officer, Kyle Casey as the Chief Financial Officer, and Vincent Tricarico as the Executive Vice President. These key management employees are primarily responsible for our day-to-day operations, and we believe our success depends in part on our ability to retain them and to continue to attract additional qualified individuals to our management team. The loss or limitation of the services of any of our key management employees or the inability to attract additional qualified management personnel could have a material adverse effect on our business, financial condition and results of operations.

As a part of our business strategy, we have made and may make acquisitions in the future that could disrupt our operations and harm our operating results.

An element of our strategy includes expanding our product offerings, gaining shelf-space and gaining access to new skills and other resources through strategic acquisitions when attractive opportunities arise. Acquiring additional businesses and the implementation of other elements of our business strategy are subject to various risks and uncertainties. Some of these factors are within our control and some are outside our control. These risks and uncertainties include, but are not limited to, the following:

There can be no assurance that attractive acquisition opportunities will be available to us, that we will be able to obtain financing (on acceptable terms or at all) for or otherwise consummate any future acquisitions, including those described above, or that any acquisitions which are consummated will prove to be successful. There can be no assurance that we can successfully execute all aspects of our business strategy.

Because we depend on outside suppliers with whom we may not have long-term agreements for raw materials, we may be unable to obtain adequate supplies of raw materials for our products at favorable prices or at all, which could result in product shortages and back orders for our products, with a resulting loss of net sales and profitability.

We acquire all our raw materials for the manufacture of our products from third-party suppliers. Currently, we rely on third-party co-packers for our products; our reliance on them has increased as the result of winding down our Utah manufacturing facility in 2018. We have selective agreements for the continued supply of materials and products. Several of our products contain one or more ingredients that may only be available from a single source or supplier. Any of our suppliers could discontinue selling to us at any time. In certain situations, we may be required to alter our products or substitute different materials from different alternative sources. Our suppliers or government regulators may interpret new regulations (including cGMP regulations) in such a way as to cause a disruption in our supply chain as these parties undertake increased scrutiny of raw materials and components of raw materials and products, causing certain suppliers or us to discontinue, change or suspend the sale of certain ingredients or components. Although we believe that we could establish alternate sources for most of these materials, any delay in locating and establishing relationships with other sources could result in product shortages and back orders for the products, with a resulting loss of net sales and profitability. We are also subject to delays associated with raw materials. These can be caused by conditions not within our control, including:

These factors could result in a delay in or disruption of the supply of certain raw materials. Any significant delay in or disruption of the supply of raw materials could have a material adverse effect upon us.

We rely on our information systems to conduct our business, and any failure to protect these systems against security breaches or failure of these systems themselves could adversely affect our business, results of operations and liquidity and could result in litigation and penalties. If these systems fail or become unavailable for any significant period of time, our business could be harmed. Additionally, the inappropriate use of social media vehicles could harm our reputation and adversely impact our business.

The efficient operation of our business is dependent on computer hardware and software systems. Among other things, these systems collect and store certain personal information from customers, vendors and employees and process customer payment information. Our information systems and those maintained by our third-party vendors and the sensitive data they are designed to protect are vulnerable to security breaches by computer hackers, cyber terrorists and other cyber attackers. We rely on industry accepted security measures and technology to securely maintain confidential and proprietary information maintained on our information systems, and we rely on our third-party vendors to take appropriate measures to protect the confidentiality of the information on those information systems. However, these measures and technology may not adequately prevent security breaches. Our information systems may become unavailable or fail to perform as anticipated for any reason, including viruses, loss of power or human error. Any significant interruption or failure of our information systems or those maintained by our third-party vendors or any significant breach of security could adversely affect our reputation with our customers, vendors and employees and could adversely affect our business, results of operations and liquidity and could result in litigation against us or the imposition of penalties. A significant interruption, failure or breach of the security of our information systems or those of our third-party vendors could also require us to expend significant resources to upgrade the security measures and technology that guard sensitive data against computer hackers, cyber terrorists and other cyber attackers.

Additionally, we rely on search engine marketing and social media platforms to attract and retain customers as part of our marketing efforts. A variety of risks are associated with the use of social media, including the improper disclosure of proprietary information, negative comments about our company and our products, exposure of personally identifiable information, fraud, or outdated information. The inappropriate use of social media vehicles by our customers or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation.

To the extent that we currently rely on third-party manufactures, now and in the future, we are dependent upon the uninterrupted and efficient operation of those third-party facilities, which may experience power failures, the breakdown, failure or substandard performance of equipment, the improper installation or operation of equipment, natural disasters, pandemic outbreaks or other disasters and the need to comply with the requirements or directives of government agencies, including the FDA.

We are dependent upon the uninterrupted and efficient operation of our third-party manufacturing partners. Those operations may experience power failures, the breakdown, failure or substandard performance of equipment, the improper installation or operation of equipment, natural disasters, pandemic outbreaks or other disasters and the need to comply with the requirements or directives of government agencies, including the FDA. There can be no assurance that the occurrence of these or any other operational problems at our facility would not have a material adverse effect on our business, financial condition and results of operations.

We may become a party to lawsuits that arise in the ordinary course of business in the future.

We may become a party to lawsuits that arise in the ordinary course of business in the future. The possibility of such litigation, and its timing, is in large part outside our control. It is possible that future litigation could arise that could have material adverse effects on us.

If our goodwill or intangible assets become impaired, we may be required to record a significant charge to earnings.

Under generally accepted accounting principles, we review our amortizable intangible assets for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Goodwill and indefinite-lived intangible assets are tested for impairment at least annually. Factors that may indicate that the carrying value of our goodwill or intangible assets may not be recoverable include a decline in stock price and market capitalization, reduced future cash flow estimates and slower growth rates in our industry. During the fourth quarter of fiscal 2021, we completed our annual impairment test of goodwill and intangible assets and recognized impairment charges, see Note 5 in the Notes to Consolidated Financial Statements included in this report.

We may need additional capital in the future to finance our operations and to execute our business strategy, which we may not be able to raise, or it may only be available on terms unfavorable to us and or our stockholders. This may result in our inability to fund our working capital requirements and harm our operational results.

Our current cash on hand is insufficient to fund our operations beyond the next twelve months. We believe that cash flows from operations and other committed sources of additional liquidity will be sufficient to fund our operations in the ordinary course of business. However, if we experience extraordinary expenses or other events beyond our control, we will need to raise additional funds to continue our operations.

Additional financing might not be available on terms favorable to us, or at all. The economic impact of COVID-19 could make it more difficult or challenging to obtain additional financing or adversely affect the favorability of the terms of any available financing. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop, or enhance our business or otherwise respond to competitive pressures would be significantly limited.

Changes in accounting standards, especially those that relate to management estimates and assumptions, are unpredictable and may materially impact how we report and record our financial condition.

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. Some of these policies require use of estimates and assumptions that may affect the value of our assets or liabilities and financial results and are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain. From time to time the Financial Accounting Standards Board ("FASB") and the Securities and Exchange Commission (the "SEC") change the financial accounting and reporting standards that govern the preparation of our financial statements. In addition, accounting standard setters and those who interpret the accounting standards (such as the FASB, the SEC, banking regulators and our outside auditors) may change or even reverse their previous interpretations or positions on how these standards should be applied. These changes can be hard to predict and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements.

We were an "emerging growth company" under the JOBS Act of 2012 through December 31, 2019 and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies made our common stock less attractive to investors.

We were an "emerging growth company," as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act") through December 31, 2019, and we took advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We had elected to adopt these reduced disclosure requirements. We cannot predict if investors found our common stock less attractive because we relied on these exemptions. If some investors found our common stock less attractive as a result, there may have been a less active trading market for our common stock and our stock price may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We chose to take advantage of the extended transition period for complying with new or revised accounting standards. 

Our status as an emerging growth company ceased as of January 1, 2020, but we qualify as a smaller reporting company that can also take advantage of certain exemptions or scaled down disclosure compared to large public companies. We cannot predict if investors will find our common stock to be less attractive because we are a smaller reporting company and we rely on these applicable exemptions and scaled-down disclosure.

Because of our history of accumulated deficits, recurring losses and negative cash flows from operating activities, we must improve profitability and may be required to obtain additional funding if we are to continue as a "going concern."

Despite attaining positive cash flows from operating activities, we still had recurring net operating losses in fiscal year 2021.  We had negative working capital at the end of fiscal year 2021 and 2020. As of December 31, 2021, and 2020, our accumulated deficit was $348.2 million and $333.3 million, respectively. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements included with this report do not include any adjustments that might result from the outcome of this uncertainty. In order for us to remove substantial doubt about our ability to continue as a going concern, we must achieve profitability, generate positive cash flows from operating activities and obtain necessary debt or equity funding.  

Our 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. Our independent registered public accounting firm has issued its report dated March 28, 2022, which includes an explanatory paragraph stating that our recurring losses, among other things, raise substantial doubt about our ability to continue as a going concern. It has been necessary to rely upon debt and the sale of our equity securities to sustain operations. Our management anticipates that we may require additional capital over the next 12 months to fund ongoing operations. There can be no guarantee that we will be able to obtain such funds, or obtain them on satisfactory terms, and that such funds would be sufficient.   

Regulatory, Product Liability and Insurance Risks

Our products are subject to government regulation, both in the United States and abroad, which could increase our costs significantly and limit or prevent the sale of our products.

The manufacture, packaging, labeling, advertising, promotion, distribution and sale of our products are subject to regulation by numerous national and local governmental agencies in the United States and other countries. The primary regulatory bodies in the United States are the FDA and FTC, and we are also subject to similar regulatory bodies in all the countries in which we do business. Failure to comply with regulatory requirements may result in various types of penalties or fines. These include injunctions, product withdrawals, recalls, product seizures, fines and criminal prosecutions. Individual U.S. states also regulate nutritional supplements. A state may seek to interpret claims or products presumptively valid under federal law as illegal under that state's regulations. For example, in February 2015, the New York Attorney General issued cease and desist letters to several national retailers regarding certain herbal supplements and since that time both the New York Attorney General and other states Attorneys General have engaged in inquiries regarding the manufacture and sale of various supplements, and pursuant to such inquiries could seek to take actions against industry participants or amend applicable regulations in their State. In markets outside the United States, we are usually required to obtain approvals, licenses, or certifications from a country's ministry of health or comparable agency, as well as labeling and packaging regulations, all of which vary from country to country. Approvals or licensing may be conditioned on reformulation of products or may be unavailable with respect to certain products or product ingredients. Any of these government agencies, as well as legislative bodies, can change existing regulations, or impose new ones, or could take aggressive measures, causing or contributing to a variety of negative consequences, including:

Any or all of these requirements could have a material adverse effect on us. There can be no assurance that the regulatory environment in which we operate will not change or that such regulatory environment, or any specific action taken against us, will not result in a material adverse effect on us.

If we experience regulatory investigations or product recalls, we may incur significant and unexpected costs, and our business reputation could be adversely affected.

We may be exposed to regulatory investigations or product recalls and adverse public relations if our products are alleged to cause injury or illness, or if we are alleged to have violated governmental regulations. A regulatory investigation or product recall could result in substantial and unexpected expenditures, which would reduce operating profit and cash flow. In addition, a regulatory investigation or product recall may require significant management attention. Regulatory investigations and product recalls may hurt the value of our brands and lead to decreased demand for our products. Regulatory investigations or product recalls also may lead to increased scrutiny by federal, state or international regulatory agencies of our operations and increased litigation and could have a material adverse effect on our business, results of operations, financial condition and cash flows. Regulatory investigations or product recalls could also result in our incurring substantial costs, losing revenues and implementing a change in the design, manufacturing process or the indications for which our products may be used, each of which could harm our business.

We may experience product liability claims and litigation to prosecute such claims, and although we maintain product liability insurance, which we believe to be adequate for our needs, there can be no assurance that our insurance coverage will be adequate or that we will be able to obtain adequate insurance coverage in the future. In addition, we may be subject to consumer fraud claims, including consumer class action claims regarding product labeling and advertising, and litigation to prosecute such claims; these claims are generally not covered by insurance.

As a distributor of products for human consumption, we experience from time to time product liability claims and litigation to prosecute such claims. Additionally, the sale and distribution of these products involves the risk of injury to consumers as a result of tampering by unauthorized third parties or product contamination. We carry insurance coverage in the types and amounts that we consider reasonably adequate to cover the risks we face from product liability claims. If insurance coverage is inadequate or unavailable or premium costs continue to rise, we may face additional claims not covered by insurance, and claims that exceed coverage limits or that are not covered could have a material adverse effect on us. Moreover, liability claims arising from a serious adverse event may in addition to increasing our costs through higher insurance premiums and deductibles, may make it more difficult to secure adequate insurance coverage in the future. In addition, consumer fraud claims, including consumer class action claims regarding product labeling and advertising, are increasingly common as to food and dietary supplement products. Because insurance is generally hard to obtain for such claims, these could have a material adverse effect on us. A product liability claim, regardless of its merit or ultimate outcome, could result in:

We may be required to indemnify our contract manufacturing and/or retailer customers, the payment of which could have a material adverse effect on our business, financial condition and operating results.

We provide certain rights of indemnification to our contract manufacturing customers. In the past we have had a claim tendered to us to defend approximately forty putative class actions alleging primarily that two products failed to contain sufficient active ingredients to meet label claims. We accepted such tender subject to a reservation of various rights and vigorously defend these cases. The matter culminated in a confidential settlement with the plaintiffs, which did not have a material adverse effect on our financial condition/results of operations or cash flows or liquidity at that time; however, any litigation involves risk and is inherently unpredictable. If any plaintiff is successful in certifying a class and thereafter prevailing on the merits of their complaint, such an adverse result could have a material adverse effect on us. In addition, due to the nature and scope of the indemnity and defense we will likely need to provide, the legal fees associated with such indemnification could be significant enough to have a material adverse effect on our cash flows until such matters are fully and finally resolved.

We may experience Lanham Act claims by competitors and litigation to prosecute such claims.

The Lanham Act empowers competitors to file suit regarding any promotional statements that the competitor believes to be false or misleading. If a competitor prevails, it could obtain monetary damages (including potentially treble damages and attorneys' fees). A court can also order corrective advertising, or even a product recall if the offending claims are found on the product's packaging and labeling. If we experience a Lanham Act claim filed against us, this could have a material adverse effect on us and on our products' reputation.

Risks Relating to Our Common Stock

Our common stock currently has very limited trading volume and holders of our securities may not be able to sell quickly any significant number of shares.

Our common stock is quoted on the OTCPK. There has been very limited trading volume of our common stock. Because of this, holders of our securities may not be able to sell quickly any significant number of such shares, and any attempted sale of a large number of our shares will likely have a material adverse impact on the price of our common stock. The price per share of our common stock is subject to volatility and may be subject to rapid price swings in the future.

Because the trading price of our common stock is below $5.00 per share it is deemed a low-priced "Penny" stock and an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a penny stock, as defined in Rule 3a51-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), it will be more difficult for investors to liquidate their investment even if and when a market develops for the common stock. Since the trading price of the common stock is below $5.00 per share, trading in the common stock will be subject to the penny stock rules of the Exchange. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

We have the ability to issue additional shares of our common stock and shares of preferred stock without asking for stockholder approval, which could cause your investment to be diluted.

Our Articles of Incorporation authorize the Board of Directors to issue up to 5,000,000,000 shares of common stock and 500,000,000 shares of preferred stock. The power of the Board of Directors to issue shares of common stock, preferred stock or warrants or options to purchase shares of common stock or preferred stock is generally not subject to stockholder approval. Shares of preferred stock could be given voting rights, dividend rights, liquidation rights or other similar rights superior to those of our shares of common stock. Additionally, any additional issuance of our common stock, or preferred stock that may be convertible into common stock, may have the effect of diluting your investment.

FINRA sales practice requirements may also limit a stockholder's ability to buy and sell our stock.

In addition to the "penny stock" rules described above, FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer's financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low-priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Our controls and procedures may not timely institute proper controls, or compensating controls when necessary or our controls may fail, which may result in a material adverse effect on our business, financial condition and results of operations.

During the fourth quarter of 2019, management identified material weaknesses in the selection and testing of our third-party logistics and fulfillment provider ("3PL"), whom the Company engaged to replace the prior 3PL. The Company has determined that the 3PL does not issue reports pursuant to the Statement on Standards for Attestation Engagement No. 18 attestation standards ("SSAE18"). The Company should have designed and implemented the necessary internal controls to address the potential risks of using a 3PL who does not issue SSAE18 reports. The Company should have taken steps to design and implement controls around the receipt of inventory at the 3PL to ensure the quantities and description of inventory movements related to the 3PL. Additionally, the Company should take steps to obtain and review the appropriate SSAE 18 reports issued by the software company which the 3PL uses as its inventory management software. Management also identified a material weakness related to 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 execute the Sarbanes Oxley documentation requirements. Prior normal staffing turnover along with technical accounting issues and the Company's change to a 3PL impacted the Company's ability to react to technical accounting matters encountered.

During the first quarter of 2020, management identified material weaknesses related to our financial reporting procedures which resulted in the Company not properly recording a reserve for accounts receivable related to a significant customer that had recently entered bankruptcy proceedings. This material weakness caused the Company to have to amend its 2020 first quarter 10-Q on August 17, 2020 to properly state our financial position. Management believes that this control failure has been resolved with staffing changes and system improvements.

On May 14, 2021, the Company announced that an internal investigation had discovered that a recently terminated employee in the Company’s accounting department had been embezzling Company funds. The investigation indicated losses of approximately $500,000 occurring between 2016 and 2021. As a result of the findings of the investigation, the terminated employee returned the majority of the embezzled funds to the Company. The employee had taken advantage of a complex consolidation process between multiple ERP systems, a lack of segregation of duties, weak internal controls, and a lack of managerial oversight. In the first quarter of 2021, the Company transitioned into a single ERP system which allows for establishment of increased segregation of duties and improvements of internal controls within the ERP system itself. Additionally, remediation of internal control weaknesses includes additional focus on managerial oversight and staffing changes within the accounting department.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f) and 15d-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements. 

Concurrent with year-end reporting, under the supervision and with the participation of our management, including our chief executive officer and our chief financial officer, we conducted an evaluation of the effectiveness of the overall design of our system of internal control over financial reporting based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission 2013 (COSO). Under standards established by the Public Company Accounting Oversight Board of the United States, a material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Management and our audit committee will continue to monitor the effectiveness of our internal controls and procedures. Other than as described above, there were no changes in our internal controls over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

An excess of a majority of our outstanding voting securities are beneficially owned by two individuals, and these two individuals can elect all directors (except for one director that may be appointed by a lender pursuant to a loan agreement) who in turn elect all officers, without the votes of any other stockholders.

The Chairman of our Board of Directors and one other stockholder beneficially own over 80% of our outstanding voting securities and, accordingly, have effective control of us and may have effective control of us for the near- and long-term future. Votes of other stockholders can have little effect when we are managed by our Board of Directors and operated through our officers, all of whom can be elected by two individuals.

We do not expect to pay dividends in the near future.

We do not expect to declare or pay any dividends on our common stock in the foreseeable future. The declaration and payment in the future of any cash or stock dividends on the common stock will be at the discretion of our Board of Directors and will depend upon a variety of factors, including our ability to service our outstanding indebtedness, if any, and to pay dividends on securities ranking senior to the common stock, our future earnings, if any, capital requirements, financial condition and such other factors as our Board of Directors may consider to be relevant from time to time. Our earnings, if any, are expected to be retained for use in expanding our business.

Not Applicable.

We occupy approximately 1,500 rentable square feet on the 2nd floor of an office building in Boca Raton, Florida under a lease that expires October 2023. We lease approximately 13,000 rentable square feet on the 3rd floor of office space within the same building of our current office in Boca Raton, Florida under a lease agreement that expires February 2026. On October 1, 2021, we entered into a sublease agreement for the 3rd floor space. We occupy certain space at NutraScience's offices in Farmingdale, New York under a lease agreement that expires May 2026. We also occupy additional space at NutraScience's facilities in Hauppauge, New York under a lease agreement that expires July 2026. We had possession of approximately 30,600 rentable square feet of office space, evenly split between the 5th and 6th floor of an office building in St. Petersburg, Florida under a lease that expires April 30, 2027. On December 1, 2016, we entered into a sublease for the 5th floor space and on December 1, 2019, we entered into a sublease for the 6th floor space. We believe that our facilities are sufficient to meet our current needs and that suitable additional space will be available as and when needed.

TCH Properties

The Company is, from time to time, a party to legal proceedings that arise in the ordinary course of business. We do not believe that the outcome of these matters will have a material adverse effect on the Company.

Not Applicable.

Market Information

Our common stock is traded in the OTC Markets PK (OTCPK), under the symbol "TLCC". We have been eligible to participate in the OTCPK since June 25, 2014 and from that time until the date of this Report our common stock has had only minimal trading. Over-the-counter market quotations of our common stock reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Holders of Common Stock

As of March 23, 2022, there were approximately 375 stockholders of record of our common stock. This number does not include shares held by brokerage clearing houses, depositories or others in unregistered form.

Dividends

We have not declared or paid any cash dividends on our common stock during our two most recent fiscal years. Any decisions regarding dividends will be made by our Board of Directors. We currently intend to retain and use any future earnings for the development and expansion of our business and do not anticipate paying any cash dividends in the foreseeable future. Our Board of Directors has complete discretion on whether to pay dividends. Even if our Board of Directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the Board of Directors may deem relevant.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes appearing elsewhere in this Annual Report on Form 10-K. Some of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the ‘‘Risk Factors’’ section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by these forward-looking statements. 

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 and a full line of herbal teas under the Alvita® brand. To accommodate consumer preferences, our products come in various formulations and delivery forms, including capsules, tablets, softgels, chewables, liquids, sprays, powders and whole herbs. 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 260 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.

We also perform services between private label distributors and contract manufacturers under the NutraScience Labs ("NSL") brand name. NSL facilitates the production of new supplements to market and reformulates existing products to include scientifically-backed ingredients. We provide our customers with numerous production services, including manufacturing, testing, label and packaging design, order fulfillment, and regulatory compliance.

NSL facilitates 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 is to help our customers manufacture or reformulate dietary supplements for sale and distribution. We do this by working with contract manufacturers to build scientifically backed formulas for resale to our end customers. We also simplify 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 do not market these private label products, but rather sell the products to the customer, who is then responsible for the marketing, distribution, and sale to retailers or to their end customers.

Going Concern Uncertainty

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, 2021, we had an accumulated deficit of $348.2 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 $119.4 million at December 31, 2021. We also have $97.4 million of debt, net of discount, presented in current liabilities. These continuing conditions, among others, raise substantial doubt about our ability to continue as a going concern.

Management has addressed 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 may 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.

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

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of our consolidated financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these consolidated financial statements requires us to make judgments and estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events, and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. On an ongoing basis, we evaluate our judgments and estimates in light of changes in circumstances, facts and experience. The effects of material revisions in estimates, if any, will be reflected in the financial statements prospectively from the date of change in estimates.

While our significant accounting policies are described in more detail in the notes to our consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K, we believe the following accounting policies used in the preparation of our consolidated financial statements require the most significant judgments and estimates.

Revenue Recognition

Revenue from product and service sales and the related cost of sales are recognized when the performance obligations are satisfied. The performance obligations are typically satisfied upon shipment of physical goods or as the services are performed over time. In addition to the satisfaction of the performance obligations, the following conditions are required for revenue recognition: an arrangement exists, there is a fixed price, and collectability is reasonably assured. Discounts, returns and allowances related to sales, including an estimated reserve for the returns and allowances, are recorded as reduction of revenue.

Shipping and handling activities fees are not recorded in sales.

Accounts Receivable and Allowances

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 and damages; and doubtful accounts based upon historical bad debt and claims experience.

Inventories

Inventories are stated at the lower of cost or net realizable value and are reduced by an estimated reserve for obsolete inventory.

Intangible Assets

Intangible assets consist primarily of trademarks and customer relationships, which are amortized on a straight-line basis over their estimated useful lives ranging from 3 to 30 years. The valuation and classification of these assets and the assignment of amortizable lives involve significant judgment and the use of estimates.

We believe that our long-term growth strategy supports our fair value conclusions. For intangible assets, the recoverability of these amounts is dependent upon achievement of our projections and the execution of key initiatives related to revenue growth and improved profitability.

Goodwill

Goodwill is not subject to amortization, but is reviewed for impairment annually, or more frequently whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. An impairment charge is recorded to the extent the carrying value of goodwill exceeds its estimated fair value. The testing of goodwill under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.

Impairment of Long-Lived Assets

Long-lived assets, including intangible assets subject to amortization, are reviewed for impairment when changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If the carrying amount of the asset exceeds the expected undiscounted cash flows of the asset, an impairment charge is recognized equal to the amount by which the carrying amount exceeds fair value. The testing of these intangibles under established guidelines for impairment requires significant use of judgment and assumptions. Changes in forecasted operations and other assumptions could materially affect the estimated fair values. Changes in business conditions could potentially require adjustments to these asset valuations.

Indefinite-Lived Intangible Assets

Indefinite-lived intangible assets relating to the asset acquisition of Organic Holdings are determined to have an indefinite useful economic life and as such are not amortized. Indefinite-lived intangible assets are tested for impairment annually which consists of a comparison of the fair value of the asset with its carrying value.

Value of Warrants Issued with Debt

We estimate the grant date value of certain warrants issued with debt using a valuation method, such as the Black-Scholes option pricing model, or, if the terms are more complex, using an outside professional valuation firm, which uses the Monte Carlo option lattice model. We record the amounts as interest expense or debt discount, depending on the terms of the agreement. These estimates involve multiple inputs and assumptions, including the market price of the Company’s common stock, stock price volatility and other assumptions to project earnings before interest, taxes, depreciation and amortization (“EBITDA”) and other reset events. These inputs and assumptions are subject to management’s judgment and can vary materially from period to period.

Share-Based Compensation

We record share-based compensation, including grants of restricted stock units, based on their grant date fair values and record compensation expense over the vesting period of the restricted stock awards.

Income Taxes

We account for income taxes using an asset and liability approach. Deferred income taxes are determined by applying currently enacted tax laws and rates to the cumulative temporary differences between the carrying values of assets and liabilities for financial statement and income tax purposes. Valuation allowances against deferred income tax assets are recorded when we are unable to conclude that it is more likely than not that such deferred income tax assets will be realized.

Results of Operations

The following table summarizes our results of operations for the years ended December 31, 2021 and December 31, 2020 (in thousands):

Net Sales

The increase in our net sales by 9% and for the year ended December 31, 2021 compared to 2020, is primarily due to an increase in demand within our contract manufacturing facilitation business, as well as COVID-19 pandemic business recovery.

Gross Profit

Our overall gross profit increase of 52% for the year ended December 31, 2021 compared to 2020, is primarily due to recognition of obsolete inventory costs in 2020 which impacted 2020 gross profit.

Selling Expenses

Our selling expenses increased by 102% for the year ended December 31, 2021 compared to 2020, primarily due to improved cash flows being reinvested into advertising and marketing campaigns.

General and Administrative Expenses

Our general and administrative expenses decreased by 33% for the year ended December 31, 2021 compared to 2020, due to reassignment of externally contracted efforts in-house and improved cost analysis of accrued expenses.

Impairment of Goodwill and Intangible Assets

During the fourth quarter of fiscal 2021, we completed our annual impairment test of goodwill and intangible assets and determined recognized impairment of $11.1million as of December 31, 2021.We determined and recognized impairment charges of $8.8 million for goodwill related to NutraScience Labs, Inc. and an aggregate impairment loss of intangible assets of $2.3 million. During the fourth quarter of fiscal 2020, we completed our annual impairment test of goodwill and intangible assets and determined that there was no impairment as of December 31, 2020.

Interest Expense, Net

Our interest expense decreased by $0.3 million or 4% for the year ended December 31, 2021 compared to 2020. The decrease is primarily due to reduced lending costs and the associated interest, as well as fully amortizing our debt discount.

Gain on Change in Derivative Liabilities

We have recorded the estimated fair value of the warrants as of the date of issuance and at each balance sheet reporting date thereafter.  As of December 31, 2021, none of the warrants that resulted in the recording of the related derivative liabilities were outstanding, therefore the value of the derivative liabilities was zero. During the year ended December 31, 2020, we reported an immaterial gain on change in derivative liabilities.

Liquidity and Capital Resources

At December 31, 2021, we had an accumulated deficit of $348.2 million primarily because of our history of operating losses and our recording of derivative liabilities and loss on stock purchase guarantee. We have a working capital deficiency of $119.4 million at December 31, 2021. Losses have been funded primarily through the issuance of common stock and warrants, borrowings from our stockholders and third-party debt and proceeds from the exercise of warrants. As of December 31, 2021, we had cash of $3.6 million. On an ongoing basis, we also seek to improve operating cash through trade receivables and payables management as well as inventory stocking levels. Net cash provided by operating activities for the year ended December 31, 2021 was $2.7 million. During the year ended December 31, 2021, we had proceeds from the issuance of debt of $1.3 million, and repayment of debt of $0.6 million.

Our total liabilities increased by $4.9 million to $142.0 million at December 31, 2021 from $137.1 million at December 31, 2020. This increase in our total liabilities was primarily due to the increase of $6.5 million in accrued interest and $1.3 in accounts payable, partially offset by a decrease of $4.0 million in accrued expenses and other current liabilities.

Cash Flows from Operating, Investing and Financing Activities

Net cash provided by operating activities was $2.7 million for the year ended December 31, 2021 as a result of our net loss of $14.9 million, forgiveness of PPP loan of $1.3 million, a non-cash impairment of goodwill and intangible assets of $11.1 million, other non-cash expenses totaling $0.5 million net, and an increase in net operating assets and liabilities of $7.3 million. By comparison, for the year ended December 31, 2020, net cash used in operating activities was $5.1 million as a result of our net loss of $14.4 million, a recovery for losses on accounts receivable of $3.8 million, a non-cash gain on change in derivative liabilities of $0.04 million, other non-cash expenses totaling $3.4 million, net and an increase in net operating assets and liabilities of $9.7 million.

Net cash provided by financing activities was $0.7 million for the year ended December 31, 2021, consisting of proceeds from the issuance of debt of $1.3 million and repayment of debt of $0.6 million. Net cash provided by financing activities was $5.2 million for the year ended December 31, 2020, consisting of net borrowings of $0.9 million under our revolving credit facility, proceeds from the issuance of debt of $6.7 million, and repayment of debt of $2.3 million.

Ongoing Funding Requirements

As set forth above, we obtained additional debt financing in the year ended December 31, 2021 to support operations. It is possible that we may need additional funding to enable us to fund our operating expenses and capital expenditure requirements.

In response to COVID-19 and 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 (defined below), Little Harbor (defined below) and Golisano Holdings (defined below) 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 have not been executed and these notes are currently in default. We anticipate extending the maturity dates and related payment deferrals with the lending parties in the second quarter of 2022. On May 7, 2020, TCC, the operating subsidiary of the Company, received the proceeds of a loan from Fifth Third Bank, National Association in the amount of $1.7 million obtained under the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted March 27, 2020 (the "PPP Loan”). The PPP Loan, evidenced by a promissory note dated May 5, 2020 (the “Note”), has a two-year term and bears interest at a rate of 1.0% per annum, with the monthly principal and interest payments due beginning December 1, 2020. The Company submitted its application for 100% forgiveness for this loan in November 2021. Subsequent to fiscal 2021, the full amount of the PPP loan was forgiven by the Small Business Administration ("SBA"). TCC used the proceeds of the PPP Loan for payroll, office rent, and utilities. On January 25, 2021, TCC applied for another PPP Loan with Fifth Third Bank in the amount of $1.3million (the "Second PPP Loan”). The Second PPP Loan, evidenced by a promissory note dated February 5, 2021 (the "Second PPP Note”), has a two-year term and bears interest at a rate of 1.0% per annum, with expected monthly principal and interest payments that were due to begin September 1, 2021. TCC used the proceeds of the Second PPP Loan for payroll, which allowed the Company to seek forgiveness for this loan. The Company submitted its application for 100% forgiveness for this loan in November 2021. In December 2021, the full amount of the Second PPP loan was forgiven by the SBA.

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 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 financings 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; abandon our business strategy of growth through acquisitions; or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016-13, Financial Instruments- Credit losses (Topic 326): Measurement of Credit losses on Financial Instruments. ASU 2016-13 requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. Our status as a smaller reporting company allows us to defer adoption until the annual period, including interim periods within the annual period, beginning January 1, 2023. Management is currently evaluating the requirements of this guidance and has not yet determined the impact of the adoption on the Company's financial position or results from operations.

Although there are several other new accounting pronouncements issued or proposed by the FASB, which we have adopted or will adopt, as applicable, we do not believe any of these accounting pronouncements have had or will have a material impact on our consolidated financial position or results of operations.

Material Contractual Obligations

As of December 31, 2021, we have total debt of $97.4 million, of which $91.1 million is considered to be related-party debt. For discussion of our debt financing, see Notes 6 and 7 in the Notes to Consolidated Financial Statements included in this report.

Effective April 7, 2015, we entered into an operating lease agreement for approximately 31,000 square feet of office space in St. Petersburg, Florida. The agreement expires in April 2027 and has a monthly base rent of $59 thousand for year 1 to $76 thousand for year 12.

On November 30, 2016, we entered into a sublease agreement to sublease half of the 31,000 square feet of office space in St. Petersburg, Florida. The sublease term commenced on February 1, 2017 and expires on June 30, 2022.

On December 15, 2016, we entered into an operating lease agreement for approximately 13,000 square feet of office space in Boca Raton, Florida. The agreement expires in February 2026 and has a monthly base rent of $17 thousand in year 1 to $21 thousand in year 8. The commencement date was August 2017.

On June 2, 2017, we entered into an operating lease agreement for approximately 18,700 square feet of office space in Farmingdale, New York. The agreement expires in May 2026 and has a monthly base rent of $22 thousand in year 1 to $20 thousand in year 9. The commencement date was June 2017.

On July 12, 2019, we entered into a sublease agreement to sublease the other half of the 31,000 square feet of office space in St. Petersburg, Florida. The sublease term commenced on December 1, 2019 and expires on April 16,30, 2027.

On April 22, 2021, we entered into an operating lease agreement for approximately 13,500 square feet of office space in Hauppauge, New York.The agreement expires in July 2026 and has a monthly base rent of $15 thousand in year 1 to $17 thousand in year 5. The commencement date was May 2021.

On August 26, 2021, we entered into an operating lease agreement for an additional 1,500 square feet approximately of office space in Boca Raton, Florida. The agreement expires in October 2023 and has a monthly base rent of $5 thousand. The commencement date was September 2021, date on which we moved our main executive offices from 4800 T-Rex Avenue, Suite 305, Boca Raton, Florida 33431 to 4800 T-Rex Avenue, Suite 225, Boca Raton, Florida 33431.

On September 12, 2021, we entered into sublease agreement to sublease the approximately 13,000 square feet of office space in Boca Raton, Florida. The sublease term commenced on October 1, 2021 and expires on February 26, 2023.

Manufacturing and Distribution Licensing Agreement

On April 24, 2019, (the "Original Form 10-K"the Company entered into a manufacturing and distribution licensing agreement with Amherst Industries, Inc. (“Amherst”) to manufacture and distribute the Alvita Tea brand of products worldwide. On October 20, 2021,  the Company ended the licensing agreement with Amherst and will begin production and distribution of Alvita in 2022.

Off-Balance Sheet Arrangements

None.

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

The financial statements required to be filed pursuant to Item 8 are appended to this report. An index of those financial statements is found in Item 15.

None.

Internal Control Over Financial Reporting

Background

We previously reported a material weakness in internal control over financial reporting for the year ended December 31, 2020 related to the following:

As disclosed herein, for the year ended December 31, 2021, management has concluded that we still have these identified material weaknesses.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2021 pursuant to Rule 13a-15(e) and 15d-15(e) under the Exchange Act. 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 chief executive officer and our 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 by Part III, Items 10-14 of Form 10-K. Pursuant toin 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, Part IV, Item 15 has also been amendedand to containensure that the currently dated certifications frominformation required to be disclosed in the Company’s principalreports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our chief executive officer and principalour chief financial officer, in a manner that allows timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined by Rule 13a-15(f) and 15d-15(f) under the Exchange Act). In assessing the effectiveness of our internal control over financial reporting as of December 31, 2021, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

During the fourth quarter of 2018 (and continuing into 2019, management identified material weaknesses in the selection and testing of our third-party logistics and fulfillment provider, whom the Company engaged to replace the Company's Utah manufacturing facility. The Company has determined that the 3PL does not issue reports pursuant to Section 302the Statement on Standards for Attestation Engagement No. 18 attestation standards. Management also identified a material weakness related to 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 documentation requirements. Prior normal staffing turnover along with technical accounting issues and the Company's change to a 3PL impacted the Company's ability to react to technical accounting matters encountered.

During the first quarter of 2020, management identified material weaknesses related to our financial reporting procedures which resulted in the Company not properly recording a reserve for accounts receivable related to a significant customer that had recently entered bankruptcy proceedings. This material weakness caused the Company to have to amend its 2020 first quarter 10-Q on August 17, 2020 to properly state our financial position. Management believes that this control failure has been resolved with staffing changes and system improvements.

On May 14, 2021, the Company announced that an internal investigation had discovered that a recently terminated employee in the Company’s accounting department had been embezzling Company funds. The investigation indicated losses of approximately $500,000 occurring between 2016 and 2021. As a result of the Sarbanes-Oxleyfindings of the investigation, the terminated employee returned the majority of the embezzled funds to the Company. The employee had taken advantage of a complex consolidation process between multiple ERP systems, a lack of segregation of duties, weak internal controls, and a lack of managerial oversight. In the first quarter of 2021, the Company transitioned into a single ERP system which allows for establishment of increased segregation of duties and improvements of internal controls within the ERP system itself. Additionally, remediation of internal control weaknesses includes additional focus on managerial oversight and staffing changes within the accounting department.

Although we have implemented certain measures that we believe will remediate these material weaknesses, we can provide no assurance that our remediation efforts will be effective or that additional material weaknesses in our internal control over financial reporting will not be identified in the future. 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 attached as Exhibits 31.1 and 31.2. Because nothe rules promulgated thereunder. The existence of material weaknesses could result in errors in our financial statements have been includedthat could result in this Amendmenta restatement of those financial statements.

Inherent Limitation on the Effectiveness of Internal Control

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 this Amendment doesevaluating 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 containabsolute 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 amend any disclosure with respect to Items 307 and 308that the degree of Regulation S-K, paragraphs 3, 4 and 5 of the certifications have been omitted. Except as stated herein, this Amendment does not reflect events occurring after the filing of the Original Form 10-Kcompliance with the SEC on April 16, 2019policies or procedures may deteriorate. We intend to continue to monitor and no attempt has been madeupgrade 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.

Changes in this Amendment to modify or update other disclosures as presented inInternal Control over Financial Reporting

To remediate the Original Form 10-K. Accordingly, this Amendment should be read in conjunction with the Original Form 10-K and with our filings with the SEC subsequentmaterial weaknesses described above, management implemented several initiatives, including but not limited to the Original Form 10-K.following:

Other than as described above, there were no changes in our internal controls over financial reporting during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

None.

Not Applicable.

TABLE OF CONTENTS

Item 10.

Directors, Executive Officers and Corporate Governance.

PART III

ITEM 10.     DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

(a)     Identification of Directors

The current members of the Board of Directors are as follows:

The principal occupations and business experience, for at least the past five years, of each Director are as follows:

Effective July 17, 2018, Mr. Zolezzi became the Company's Chief Executive Officer and President, filling the vacancy created by the resignation of the Company's former CEO, Naomi Whittel.  Mr. ZolezziVan Andel was appointed to the Board on May 8, 2018. PriorFebruary 23, 2015 and elected Chairman on February 26, 2016. He is Chairman and CEO of the Van Andel Institute for Education and Medical Research. He currently serves on the Board of Directors of Amway Corporation and serves on its Executive, Governance and Audit Committees and prior to joiningleading the Company as Chief Executive OfficerVan Andel Institute held various positions at Amway since 1977. He was a shareholder and President, Mr. Zolezzi spentmember of the last 5 years serving as an Operating Partner at Pegasus Capital Advisors,Board of Directors of Twinlab Holdings, Inc. ("THI") from January 1, 2013 through August 7, 2014 when THI was acquired by and became a private alternative asset management firm, where he is also Co-Chairsubsidiary of its Wellness Committee. In the past, Mr. Zolezzi has been the Chief Executive OfficerTwinlab Consolidated Corporation ("TCC"). He co-founded IdeaSphere Inc., a predecessor of several successful, health and wellness companies including Wild Oats Marketplace, Code Blue Innovations, Natural Pet Nutrition, The New Organics Company and Pacific Basin Foods. Mr. Zolezzi has also served as an advisor for New Chapter Whole Foods Supplements, Wild Oats Private Label Supplements, Waste Management, Nestle and Whole Foods on several health, wellness and sustainability programs and projects. Mr. Zolezzi has hisTHI. He holds a Bachelor of Science degreeArt in BiologyBusiness Administration from Loyola Marymount University, Los Angeles, California.Hope College. Mr. Van Andel has an extensive history as a director and stockholder of certain of the Company’s predecessors. In addition, he has extensive experience as a corporate executive and investor in numerous industries. The Board believes this healthpublic company and wellnesslegacy experience qualifies him to serve as a director.

Mr. Ellis was appointed to the Board on February 23, 2015. Mr. Ellis founded Penta Mezzanine FundAssurance Capital in 2012 and has been Managing Principal since inception.2016. Prior to founding Penta Mezzanine Fund,Assurance Capital, he was a  Principal and Co-Founder of theboth Penta Mezzanine Fund and Florida Mezzanine Fund, a mezzanine fund based in Orlando, Florida.Fund. He is the former CEO of Digital Infrared Imaging, Inc.where he secured venture capital and managed the company’s expansion from three to more than 50 employees during a period of 12 different acquisitions. He also led the company’s merger with ICx Technologies, Inc. and assisted the company with its initial public offering. Mr. Ellis co-founded and engineered the public sale of Florida Regional Emergency Services, athe largest hospital-based ambulance management company.company in the United States at the time of sale. Mr. Ellis began his career as an auditor and senior manager with Ernst & Young and KPMG. He is a CPA and received a BacehlorBachelor of Science in Accounting from the University of Florida. Mr. Ellis has extensive experience as a CPA and as the head of an investment fund. The Board believes this experience in accounting and finance qualifies him to serve as a director.

Mr. Golisano was appointed to the Board on April 15, 2016. Mr. Golisano founded the B. Thomas Golisano Foundation in 1985. He also founded Paychex Inc. in 1971 and served as its President and Chief Executive Officer from 1971 to October 2004. He has been the Chairman of Paychex, Inc. since October 1, 2004 and also a Director since 1979. Mr. Golisano serves as the Chairman of Bluetie, Inc. He served as Chairman of Store To Door LLC. He served as the Chairman of Mykonos Software, Inc. Mr. Golisano served as the Chairman of Greater Rochester Fights Back, a coalition to combat illegal drugs and alcohol abuse. Mr. Golisano served as the Chairman of Safesite Records Management Corporation until its acquisition by Iron Mountain Incorporated in June 1997. He served as a Director of Ultra-Scan Corporation. He served as an Independent Director of Iron Mountain Incorporated from June 1997 to May 24, 2006. He served as a Director of SmartCare Clinics Inc. He serves as a Trustee of the Rochester Institute of Technology and the Rochester Chamber of Commerce. The Board believes this executive and public company experience qualifies him to serve as a director.

Mr. StillZolezzi was appointed to the Board on May 8, 2018. He served as the Company's Chief Executive Officer and President from July 2018 to August 2019 Prior to joining the Company as Chief Executive Officer and President, Mr. Zolezzi spent the last 5 years serving as an Operating Partner at Pegasus Capital Advisors, a private alternative asset management firm, where he is also Co-Chair of its Wellness Committee. In the past, Mr. Zolezzi has been a Directorthe Chief Executive Officer of Twinlab Consolidated Holdings, Inc. since April 15, 2016.several successful, health and wellness companies including Wild Oats Marketplace, Code Blue Innovations, Natural Pet Nutrition, The New Organics Company and Pacific Basin Foods. Mr. Still has served as a Director of Bak USA LLC since 2015, as a Trustee for WXXI Public Broadcasting Corporation since 2013 and as a Trustee and the Current Chairman of the Rochester Area Community Foundation since 2011. Mr. Still began his career in banking with Barclays Bank andZolezzi has also served as Senior Managing Director of Fishers Assetan advisor for New Chapter Whole Foods Supplements, Wild Oats Private Label Supplements, Waste Management, from 1998 to 2017, as Chief Executive Officer of Networx Corporation Inc. from 2014 to 2016Nestle and held various positions with Chase Manhattan BankWhole Foods on several health, wellness and Dunfries Corporation, a subsidiary of Chase Manhattan Bank, from 1991 to 1998, including most recently as Vice Presidentsustainability programs and Portfolio Manager of Real Estate Lending.projects. Mr. Still holds aZolezzi has his Bachelor of ArtsScience degree in Philosophy and a Master of Business Administration, bothBiology from theLoyola Marymount University, of Pittsburgh.Los Angeles, California. The Board believes this executivehealth and bankingwellness experience qualifies him to serve as a director.

Mr. Van AndelDiPofi was appointed to the Board on February 23, 2015 and elected ChairmanJanuary 1, 2021. He joined the Company as Chief Executive Officer on February 26, 2016.January 13, 2020. Mr. DiPofi has served as a private equity manager for Fishers Asset Management since July 1, 2019. He is Chairman and CEOpreviously served as executive vice president of the Buffalo Sabres of the National Hockey League from 1994 to 1998, when he left to become chief financial officer of Hoffend & Sons Inc., a custom engineering and design firm. In 2003, Mr. DiPofi returned to the Buffalo Sabres and served as chief operating officer until 2012. Mr. DiPofi was retired from 2012 until 2020. He has over 20 years’ experience serving in senior executive positions within the sports and entertainment industry. Mr. DiPofi holds a degree in accounting from Niagara University. The Board believes this experience in accounting and finance qualifies him to serve as a director.

Mr. Fabel was appointed to the Board on September 30, 2021. Mr. Fabel was proposed by David Van Andel Institute for Education and Medical Research. He currently serves onwas recommended by the Nominating/Corporate Governance Committee to be appointed to the Board pursuant to certain provisions of Directorsthe Voting Agreement, dated as of Amway CorporationOctober 5, 2015, among the Company, Great Harbor Capital, LLC ("Great Harbor”) and serves on its Executive, GovernanceGolisano Holdings LLC, Thomas A. Tolworthy, Little Harbor, LLC ("Little Harbor”), and Audit Committees and prior to leading the David L. Van Andel Institute held various positions at Amway since 1977. He wasTrust U/A dated November 30, 1993 (the "Voting Agreement”). Since 2012, he has served as managing partner of Silverback Companies, LLC, an investment consulting firm providing advisory services to early-stage technology companies. From 2019 to the present, Mr. Fabel has served as Chief Executive Officer of eTail Partners, a shareholderSilverback company, which provides Amazon marketing services for global consumer brands. Elected in May 2021, Mr. Fabel is currently a member of the board of directors of Veritas Farms, Inc., a vertically-integrated agribusiness focused on producing, marketing, and distributing full spectrum hemp oils and extracts. From 2018 to 2019, Mr. Fabel served as President and a member of the Board of Directors of Twinlab Holdings, Inc. ("THI") from January 1, 2013 through August 7, 2014 when THI was acquired byGreen Roads World, a formulator and became a subsidiarymanufacturer of Twinlab Consolidated Corporation ("TCC"). He co-founded IdeaSphere Inc., a predecessor of THI. Hehigh-quality CBD products. Mr. Fabel holds a Bachelor of ArtScience degree in Business Administrationmarketing from Hope College. Mr. Van Andel has an extensive history as a director and stockholder of certain of the Company’s predecessors. In addition, he has extensive experience as a corporate executive and investor in numerous industries.Florida State University. The Board believes this public companyhealth and legacywellness experience qualifies him to serve as a director.

We believe that all of our current Board members possess the professional and personal qualifications necessary for Board service and have highlighted particularly noteworthy attributes for each Board member in the individual biographies above.

(b)    Identification of Executive Officers

The following table identifies our current executive officers:

Anthony Zolezzi — Please refer toDaniel DiPofi – Mr. DiPofi joined the biographical information forCompany as Chief Executive Officer on January 13, 2020. Mr. Zolezzi listed above under identification of "Directors."

Carla Goffstein – Ms. GoffsteinDiPofi has served as oura private equity manager for Fishers Asset Management since July 1, 2019. He previously served as executive vice president of the Buffalo Sabres of the National Hockey League from 1994 to 1998, when he left to become chief financial officer of Hoffend & Sons Inc., a custom engineering and design firm. In 2003, Mr. DiPofi returned to the Buffalo Sabres and served as chief operating officer until 2012. Mr. DiPofi was retired from 2012 until 2020. He has over 20 years’ experience serving in senior executive positions within the sports and entertainment industry. Mr. DiPofi holds a degree in accounting from Niagara University.

Kyle Casey – Mr. Casey joined the Company in April 2019 and served as the Company’s Controller prior to his appointment as interim Chief Financial Officer since April 2019,of the Company, effective October 8, 2019. He was previously Interimthen appointed Chief Financial Officer and Senior Vice President, Finance since August 2018 and was previously Vice President, Finance fromas of January 2018 when she joined the Company until August 2018. Prior to13, 2020. Before joining the Company, Ms. GoffsteinMr. Casey was an independent consultant inwith Gulfstream Park Racetrack and Casino from December 2015 through November 2018, most recently serving as the finance area with a focus on shared services processes, IT finance, cost savings and analysis, consumer brand strategy, portfolio analysis, logistics and distribution financial analysis, and overall general financial modeling and analysis from July 2015 until January 2018.Vice President of Finance. Prior to that, Ms. Goffstein worked at Procter & Gamblehis employment with Gulfstream Park Racetrack and Casino, Mr. Casey served as Chief Auditing Officer for the Florida Department of Business and Professional Regulation from March 1998 until June 2015 in increasing positions of responsibility, serving most recently as the Associate Director of Finance for IT Solutions for Procter & Gamble’s Global Business Services unit, from August 2012 until June2014 through December 2015. Ms. GoffsteinMr. Casey holds a Bachelor of Science in Accounting and Finance, from Miami University in Oxford, Ohio.

Shari Gottesman – Ms. Gottesman has served as our General Counsel since November 2017 and Corporate Secretary since May 2018. From April 2012 until joining the Company in November 2017, Ms. Gottesman served firstwell as Senior Counsel at EVINE Live, Inc. (formerly ShopNBC and ShopHQ) from 2012 to 2014 then as Assistant General Counsel through November 2017 in the Minneapolis, Minnesota area. Ms. Gottesman is duly licensed and a member in good standing of the bars of New York, Maryland, Minnesota and is an Authorized In-House Counsel in the state of Florida. Ms. Gottesman holds a Bachelor of Arts from the University of Hartford and Juris Doctorate from Touro College Jacob D. Fuchsberg Law Center.

Gregory Thomas Grochoski — Mr. Grochoski has served as our Executive Vice President and Chief Science Officer since September 2014. Prior thereto, he served as Chief Science Officer for THI and its predecessor company commencing in 2004. Mr. Grochoski holds a BachelorMaster of Science in Economics andTaxation, from Florida State University. Mr. Casey is a Bachelor of Science in Chemistry from Grand Valley State University.licensed Certified Public Accountant.

(c)    Identification of Certain Significant Employees

Not applicable.

(d)    Family Relationships

There are no family relationships among our executive officers and directors.

(e)    Business Experience

The business experience of each of our current directors and executive officers is set forth in Part III, Item 10(a), “Identification of Directors” and Part III, Item 10(b), “Identification of Executive Officers,” respectively, of this Annual Report on Form 10-K/A.respectively.

The directorships currently held, and held during the past five years, by each of our directors in any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended, or subject to Section 15 of such Act or any company registered as an investment company under the Investment Company Act of 1940, as amended, are set forth in Part III, Item 10(a), “Identification of Directors” of this Annual Report on Form 10-K/A.Directors.”

(f)    Involvement in Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers that served during the year ended December 31, 20182021 ("Fiscal 2018"2021") or currently has been involved during the past ten years in any legal proceedings required to be disclosed pursuant to Item 401(f) of Regulation S-K.

(g)    Promoters and Control Persons

Not applicable.

(h) and (i) Audit Committee and Audit Committee Financial Expert

The members of the standing Audit Committee are David A. Still and Seth Ellis, both of whom arean independent directorsdirector as determined by the Nasdaq Rules. The responsibilities and duties of the Audit Committee consist of, but are not limited to:

Our Board has determined that Seth Ellis qualifies as an “Audit Committee financial expert” within the meaning of applicable regulations of the Securities and Exchange Commission, promulgated pursuant to the Sarbanes-Oxley Act of 2002. Our board of directors has adopted a written charter for the Audit Committee which the Audit Committee reviews and reassesses for adequacy on an annual basis. A copy of the Audit Committee’s charter is located on our website at www.tchhome.com.www.tchhome.com.

(j)    Procedures for Stockholder Nominations to the Board of Directors

No material changes to the procedures for nominating directors by our stockholders were made during Fiscal 2018.2021.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act requires our executive officers and directors, and persons who own more than 10% of our common stock, to file reports regarding ownership of, and transactions in, our securities with the Securities and Exchange Commission and to provide us with copies of those filings. To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during the year ended December 31, 2018, all such filing requirements applicable to the Company’s directors, executive officers and greater than 10% beneficial owners were complied with except Anthony Zolezzi who inadvertently has not yet filed one (1) late report regarding his initial statement of beneficial ownership reflecting that he did not own any shares.

Code of Conduct and Ethics

The Company has adopted a Code of Ethics and Business Conduct that applies to all of its directors, officers (including its Chief Executive Officer, Chief Financial Officer Controller and any person performing similar functions) and employees. The Company has made this Code of Ethics and Business Conduct available on its website at www.tchhome.com/code-of- ethics. The Company intends to satisfy the disclosure requirements under applicable SEC rules relating to amendments to the Code of Ethics or waivers from any provisions thereof applicable to the Company's principal executive officer, principal financial officer and principal accounting officer by posting such information on the Company's website pursuant to SEC rules.

ITEM 11.     EXECUTIVE COMPENSATION

Item 11.

Executive Compensation

This section discusses the material components of the executive compensation program for our executive officers who are named in the "2018"2021 Summary Compensation Table" below. In 2018,2021, our "named executive officers" consisted of the following:

Anthony Zolezzi,Daniel DiPofi, Chief Executive Officer;Officer

Kyle Casey, Chief Financial Officer

Carla Goffstein, Chief Financial Officer and Senior Vice President, Finance

Gregory Thomas Grochoski, Executive Vice President and Chief Science Officer

Naomi Whittel, Former Chief Executive Officer;

Alan S. Gever, Former Chief Financial Officer and Chief Operating Officer.

We are an "emerging growth company" under applicable federal securities laws and therefore permitted to take advantage of certain reduced public company reporting requirements. As an emerging growth company, we provide in this Form 10-K/A the scaled disclosure permitted under the Jumpstart Our Business Startups Act of 2012, including the executive compensation disclosures required of a "smaller reporting company." In addition, as an emerging growth company, we are not required to conduct votes seeking approval, on an advisory basis, of the compensation of our named executive officers or the frequency with which votes must be conducted.

20182021 Summary Compensation Table

The following table sets forth information concerning the compensation of our named executive officers for the years ended December 31, 20182021 and December 31, 2017.2020.

1 Mr. DiPofi was appointed as Chief Executive Officer of the Company effective January 13, 2020.

2 Mr. Casey was appointed Chief Financial Officer of the Company effective January 13, 2020.

Narrative Disclosure to Summary Compensation Table

Employment Agreement with Anthony ZolezziDaniel DiPofi

Employment Term and Position

On July 17, 2018,January 13, 2020, the Company and Mr. ZolezziDiPofi entered into an at-will employment agreement (the “Employment Agreement”) that has a two (2) year term with automatic renewals for additional one-year periods unless the Employment Agreement is terminated by Mr. Zolezzi or the Company, in each case by 30 days’ written notice. In addition, the Company may terminate Mr. Zolezzi’s employment at any time, with or without cause, and Mr. Zolezzi may terminate his employment with the Company on 30 days’ written notice. Pursuant to the Employment Agreement, Mr. Zolezzi will serveserves as the Chief Executive Officer and President of the Company. There is no set employment term or notice period required prior to termination of employment.

Base Salary, Annual Bonus, Benefits

Pursuant to the Employment Agreement,employment agreement, Mr. Zolezzi will receive aDiPofi's base salary went up from $150,000 in 2020 to $200,000 in 2021. He was awarded a discretionary bonus of $564,000 per year.$200,000. In addition, Mr. Zolezzi isDiPofi was eligible to participate in the Company’s standard employee benefits programs available to senior executives.

Mr. Zolezzi was also granted an initial equity award of restricted stock. The initial equity award is for 8,000,000 shares of common stock ("Initial Equity Award") in exchange for an exercise price equal to the fair market value of the Company's common stock and is subject to the Company's 2013 Stock Incentive Plan. If Mr. Zolezzi's employment terminates for any reason, the Initial Equity Award will terminate in its entirety and be forfeited to the Company. The Initial Equity Award will vest upon the closing of a qualifying sale (as defined in the Employment Agreement) of the Company during Mr. Zolezzi's employment period. The vesting schedule provides that (i) 2,000,000 shares of the Initial Equity Award will vest if the net proceeds (as defined in the Employment Agreement) received by Company securityholders in a qualifying sale is equal to or greater than $100 million but less than $200 million; (ii) an additional 2,000,000 shares of the Initial Equity Award will vest if the net proceeds received by Company securityholders in a qualifying sale is equal to or greater than $200 million but less than $300 million; and (iii) an additional 4,000,000 shares of the Initial Equity Award will vest if the net proceeds received by Company securityholders in a qualifying sale is equal to or greater than $300 million.Restrictive Covenants

Pursuant to the Employment Agreement, if the Company completes a qualifying sale during theDiPofi employment period or within six months afteragreement, Mr. Zolezzi's employment is terminated for good reason or if the Company terminates Mr. Zolezzi other than due to death, cause or disability, the Company will pay Mr. Zolezzi a qualifying sale payment upon the closing of the qualifying sale. The amount of the qualifying sale payment is the aggregate of (i) 4% of the consideration to be paid to the Company's shareholders in such a qualifying sale if the net proceeds to be received by the Company's securityholders in a qualifying sale is equal to or greater than $100 million but less than $200 million; (ii) 6% of the consideration to be paid to the Company's shareholders in such a qualifying sale if the net proceeds to be received by the Company's securityholders in a qualifying sale is equal to or greater than $200 million but less than $300 million; and (iii) 8.5% of the consideration to be paid to the Company's shareholders in such a qualifying sale if the net proceeds to be received by the Company's securityholders in a qualifying sale is equal to or greater than $300 million. Mr. Zolezzi's receipt of the qualifying sale payment is subject to Mr. Zolezzi signing and not revoking a release of claims against the Company.

Under the Employment Agreement, in the event Mr. Zolezzi’s employment is terminated by the Company pursuant to its termination right (as defined in the Employment Agreement) or by Mr. Zolezzi for good reason, Mr. Zolezzi will be entitled to receive a severance amount equal to $282,000. Mr. Zolezzi’s receipt of the severance amount discussed above is contingent on Mr. Zolezzi signing and not revoking a release of claims against the Company.

Restrictive Covenants

Pursuant to the Employment Agreement, Mr. Zolezzi is subject to post-termination non-solicitation and non-competition covenants.

Employment Agreement with Carla Goffstein

Employment Term and Position

On April 22, 2019 the Company and Ms. Goffstein entered into an Employment, Non-Competition and Proprietary Rights Agreement (the “Goffstein Employment Agreement”) that has a two-year term with automatic renewals for additional one-year periods unless the Goffstein Employment Agreement is terminated by Ms. Goffstein or the Company, in each case by 30 days’ written notice. In addition, the Company may terminate Ms. Goffstein’s employment at any time, with or without cause. Pursuant to the Goffstein Employment Agreement, Ms. Goffstein will serve as the Chief Financial Officer of the Company.

Base Salary, Annual Bonus, Benefits

Pursuant to the Goffstein Employment Agreement, Ms. Goffstein will receive a base salary of $275,000 per year and an annual bonus of up to 50% of her base salary based on the achievement of performance metrics. In addition, Ms. Goffstein is eligible to participate in the Company’s standard employee benefits programs available to senior executives.

Under the Goffstein Employment Agreement, in the event of a termination without cause by the Company or a termination with good reason by Ms. Goffstein, she will be entitled to receive severance benefits equal to twelve months of her base salary and any accrued and unpaid bonus payable on account of any calendar year ending prior to the year in which the termination occurs. Under the Goffstein Employment Agreement, in the event of a change in control wherein Ms. Goffstein’s employment is terminated in the first year thereafter, Ms. Goffstein will be entitled to receive severance benefits equal to six months of her base salary; if her employment is terminated in the second year thereafter, Ms. Goffstein will be entitled to receive severance benefits equal to four months of her base salary.

Ms. Goffstein’s receipt of the severance benefits discussed above is contingent on Ms. Goffstein signing and not revoking a release of claims against the Company.

Restrictive Covenants

Pursuant to the Goffstein Employment Agreement, Ms. Goffstein isDiPofi was subject to (i) non-disclosure of confidential information restrictions while employed and for a period of two (2) years following the termination of employment, (ii) non-solicitation restrictions while employed and for a period of two (2) years following the termination of employment, and (iii) non-competition restrictions while employed and for a period of six (6) months following the termination of employment.

Employment Agreement with Gregory GrochoskiKyle Casey

Employment Term and Position

On January 30, 2015, Twinlab Consolidation Corporation13, 2020, the Company and Mr. GrochoskiCasey entered into an at-will employment agreement (the “Grochoski Employment Agreement”) that may be terminated by Mr. Grochoski or the Company effective immediately. In addition, the Company has the right to terminate Mr. Grochoski’s employment at any time, with or without cause, and Mr. Grochoski has the right to terminate his employment with the Company at any time for any reason, including but not limited to for good reason on 30 days’ written notice for good reason by complying with the Good Reason Process, as defined in the Grochoski Employment Agreement. Pursuant to the Grochoski Employment Agreement, Mr. Grochoski serves as the EVP, Chief ScienceFinancial Officer of the Company. There is no set employment term or notice period required prior to termination of employment.

Base Salary, Annual Bonus, Benefits

Pursuant to the Grochoski Employment Agreement,employment agreement, Mr. Grochoski is eligible to receive aCasey's base salary of $262,500.16 per year. Additionally, Mr. Grochoski is eligiblewent up from $225,000 in 2020 to participate$240,000 in 2021. He was awarded a performance-based bonus program with a target annualdiscretionary bonus of fifty percent (50%) of his base salary. The actual amount of the annual bonus for a given year will be determined by the Company pursuant to applicable performance metrics and may be between 0% and 100% of his base salary for the given year. Mr. Grochoski is eligible to participate in the Company's equity incentive plan and will be eligible to receive from time-to-time long-term equity incentive grants, including stock options, restricted stock or other stock-based awards as determined in the discretion of the Compensation Committee or the Board.$40,000. In addition, Mr. Grochoski is eligible to participate in the Company’s standard employee benefits programs available to employees generally.

Under the Grochoski Employment Agreement, in the event Mr. Grochoski’s employment is terminated by the Company without cause or by Mr. Grochoski complying with the Good Reason Process, Mr. Grochoski would be entitled to receive severance benefits equal to (i)(a) twenty-six (26) weeks of his base salary if the effective date of his termination is not within the six (6) month period immediately after a change in control, or (b) fifty-two (52) weeks of his base salary if the effective date of his termination is within the six (6) month period immediately after a change in control and (ii) an amount related to the continuation of Mr. Grochoski's COBRA health continuation coverage. Mr. Grochoski’s receipt of the severance benefits will be contingent on Mr. Grochoski signing and not revoking a release of claims against the Company. The Grochoski Employment Agreement also contains post-termination non-solicitation and non-competition covenants.

Employment Agreement with Naomi L. Whittel

Employment Term and Position

On September 21, 2016, the Company and Ms. Whittel entered into an employment agreement (the "Whittel Employment Agreement") that had a three-year term from its commencement date of March 16, 2016 with automatic one-year renewal terms if the Board did not notify Ms. Whittel that the Company would not be renewing the employment term at least 180 days in advance of the end of the applicable term. The Whittel Employment Agreement superseded all previous employment agreements by and between the Company and Ms. Whittel. Pursuant to the Whittel Employment Agreement, Ms. Whittel served as Chief Executive Officer of the Company.

Base Salary, Annual Bonus, Benefits

Pursuant to the terms of the Whittel Employment Agreement, Ms. Whittel was entitled to an annual base salary of $300,000 and an annual bonus of up to 150% of her annual salary pursuant to the satisfaction of performance targets and goals. In addition, Ms. WhittelCasey was eligible to participate in the Company’s standard employee benefits programs available to senior executives. Ms. Whittel was also entitled to receive equity awards pursuant to satisfaction of performance goals.

Restrictive Covenants

Pursuant to the Whittel Employment Agreement, Ms. WhittelCasey employment agreement, Mr. Casey was subject to non-competition(i) non-disclosure of confidential information restrictions while employed and for a period of two (2) years following the termination of employment, (ii) non-solicitation restrictions while employed and for a 12-month period afterof two (2) years following the termination of employment, and (iii) non-competition restrictions while employed and for a period of six (6) months following the termination of employment. Ms. Whittel was also subject to confidentiality restrictions.

Separation Agreement

Effective April 25, 2018, Ms. Naomi Whittel resigned from her position as Chief Executive Officer of the Company and as a member of the Company’s Board of Directors, in order to pursue other opportunities.

On April 27, 2018, the Company and Ms. Whittel entered into a Separation and Release Agreement (the “Whittel Separation Agreement”). Pursuant to the Whittel Separation Agreement, Ms. Whittel will be permitted to sell products of the Company and its affiliates (“Company Products”) on the websites of the companies with whom she is affiliated with; however, Ms. Whittel has agreed not to directly or indirectly sell, and will not permit her associated companies to directly or indirectly sell, any products that compete with the Company Products without the prior written consent of the Company.

Ms. Whittel received her salary for days worked through the April 25, 2018 (“Whittel Separation Date”). Ms. Whittel further agreed that her continuing obligations arising under the Whittel Employment Agreement, and the unit purchase agreement between her (as Naomi L. Balcome), Robert G. Whittel and the Company dated September 2, 2014, as amended, (the “Unit Purchase Agreement”) remain in full force and effect.

In mutual consideration, the Company agreed to discontinue use of her name and likeness, and to transfer ownership of the Company’s POWERPHENOLS and AUTOPHATEA trademarks to Ms. Whittel.

As consideration for the ability to sell Company Products during non-competition periods in the Whittel Employment Agreement and the Unit Purchase Agreement and in consideration of the other terms and conditions of the Whittel Separation Agreement, Ms. Whittel forfeited any vacation pay she may have been entitled to, and did not receive any additional compensation of any kind, in respect to employment by Company. Ms. Whittel further agreed to surrender to the Company her 3,000,000 shares of common stock, as well as reimburse the Company for expenses and obligations incurred by the Company or its affiliates in relation to the purchase, marketing, promotion and sale of her Glow15 book and related programs (the “Book” and the “Kits”), in addition Ms. Whittel also reimbursed the Company for an amount no less than $103,037.00, for fees incurred by certain consultants.

The Company provided fulfillment services for Ms. Whittel’s Books and Kits until April 30, 2018. On April 30, 2018, any unsold Kits were invoiced to Ms. Whittel, who paid the Company the cost of those Kits plus any shipping and handling fees that were incurred. All revenue of Book and Kit orders fulfilled by the Company on Ms. Whittel’s behalf during this transition period belonged to the Company.

The Whittel Separation Agreement includes mutual release, non-disparagement, and similar provisions typical for this type of separation agreement.

Pursuant to the Whittel Separation Agreement, Ms. Whittel agreed to certain standstill provisions through October 9, 2019, regarding taking certain actions, including the acquisition of securities and assets of the Company, any tender offer, exchange offer, merger or other business combination, any recapitalization, restructuring, liquidation, dissolution or extraordinary transaction or the solicitation of proxies or consents to vote, seek representation on or control or influence management of the Board, or enter into discussions with any third party regarding any of these items.

The Whittel Separation Agreement provided Ms. Whittel with a seven (7) day revocation period from the date of execution (the “Revocation Period”), and the Whittel Separation Agreement was not effective until the Revocation Period expired.

Employment Agreement with Alan S. Gever

Employment Term and Position

On March 21, 2017, the Company and Mr. Gever entered into an employment agreement (the “Gever Employment Agreement”) that had a one-year term with automatic renewals for additional one year periods unless the Gever Employment Agreement was terminated by Mr. Gever or the Company, in each case by 30 days’ written notice. In addition, the Company had the right to terminate Mr. Gever’s employment at any time, with or without cause, and Mr. Gever had the right to terminate his employment with the Company on 30 days’ written notice or immediately for good reason, as defined in the Gever Employment Agreement. Pursuant to the Gever Employment Agreement, Mr. Gever served as the Chief Financial Officer and Chief Operating Officer of the Company.

Base Salary, Annual Bonus, Benefits

Pursuant to the Gever Employment Agreement, Mr. Gever was eligible to receive a base salary of $275,000 per year and an annual bonus of up to 65% of his base salary. $100,000 of the first year’s bonus was guaranteed and was paid in equal installments on the six and twelve month anniversary of the Gever Employment Agreement. Mr. Gever was also entitled to earn a long-term incentive equal to 1% of the change in enterprise value of the Company over a four-year period, half of which would be paid in cash and half of which would be paid in cash or in stock, at the discretion of the Board of Directors. In addition, Mr. Gever was eligible to participate in the Company’s standard employee benefits programs available to senior executives.

Under the Gever Employment Agreement, in the event Mr. Gever’s employment would have been terminated by the Company without cause or by Mr. Gever on 30 days' written notice for good reason, Mr. Gever would have been entitled to receive severance benefits equal to eighteen months of his base salary. Mr. Gever’s receipt of the severance benefits was contingent on Mr. Gever signing and not revoking a release of claims against the Company. The Gever Employment Agreement also contained post-termination non-solicitation and non-competition covenants.

On August 21, 2018, Mr. Gever resigned as the Company's Chief Financial Officer and Chief Operating Officer.

Equity-Based Compensation Awards

The only equity compensation plan currently in effect is the Twinlab Consolidation Corporation 2013 Stock Incentive Plan (the “TCC Plan”), which was assumed by the Company on September 16, 2014. The TCC Plan originally established 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 who will aid in our success. During 2018 and 2017, we granted Restricted Stock Units ("RSUs"), to certain employees pursuant to the TCC Plan. Each Restricted Stock UnitRSU relates to one share of the Company’s common stock. The Restricted Stock UnitRSU awards vest 25% each annually on various dates through 2019. We estimated the grant date fair market value per share of the Restricted Stock UnitsRSUs and are amortizing the total estimated grant date value over the vesting periods. During the year ended December 31, 2018, a total of 1,202,095 shares of common stock were issued to employees pursuant to the vesting of Restricted Stock Units. As of December 31, 2018,2021, a total of 7,194,412 shares remain available for use in the TCC Plan.

Other Elements of Compensation

Retirement Plans

Until June 2016, the Company maintained a defined contribution retirement plan (the “Plan”) which qualified under Section 401(k) of the Internal Revenue Code of 1986, as amended. All employees over the age of 18 were eligible for participation in the Plan, on the 1st day of the 1st month following 30 days of employment with the Company. The Plan was a safe harbor plan, requiring the Company to match 100% of the first 1% of eligible salary contributed per pay period by participating employees, and to match 50% on the next 5% of eligible salary contributed per pay period by participating employees (with matching capped at 6% per pay period). Currently, we no longer offer matching contributions but do allow our employees to contribute to a 401(k) portfolio. The Company recognized no expenses of $[•] and $63 related to the Plan in 20182021 and 2017, respectively.2020.

Outstanding Equity Awards at Fiscal Year-End

The outstanding equity awards at fiscal year-end table has been omitted as there is no required information to be disclosed for the fiscal year ended December 31, 2018.2021. 

DIRECTOR COMPENSATION

The director compensation table has been omitted as no compensation was received by the directors during the year ended December 31, 2018.2021. We do not currently have an established compensation package for Board members.

Compensation Committee

The members of our Compensation Committee are B. Thomas Golisano, Chairman, and Seth Ellis, both of whom are independent directors as determined by the NASDAQ rules. The Compensation Committee is responsible for, among other matters:

We believe our compensation policies present no risks that are reasonably likely to have a material adverse effect on our Company. The Compensation Committee has not retained a compensation consultant to review our policies and procedures with respect to executive compensation. A copy of the Compensation Committee's charter is located on our website at www.tchhome.com.

The following table presents information about the beneficial ownership of the Company's Common Stock as of April 15, 2019March 23, 2022 by those persons known to beneficially own more than 5% of our capital stock and by our directors, named executive officers, and current executive officers and directors as a group. The percentage of beneficial ownership for the following table is based on 255,643,828259,092,833 shares of Common Stock outstanding.

Beneficial ownership is determined in accordance with the rules of the SEC and does not necessarily indicate beneficial ownership for any other purpose. Under these rules, beneficial ownership includes those shares of Common Stock over which the stockholder has sole or shared voting or investment power. It also includes shares of Common Stock that the stockholder has a right to acquire within 60 days after April 15, 2019,March 23, 2022, pursuant to options, warrants, restricted stock units or other rights. The percentage of ownership of the outstanding Common Stock, however, is based on the assumption, expressly required by the rules of the SEC, that only the person or entity whose ownership is being reported has vested restricted stock units or converted options or warrants into shares of our Common Stock.

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