TL Administration Corp – ‘424B4’ on 4/8/98

As of:  Wednesday, 4/8/98   ·   Accession #:  950123-98-3550   ·   File #:  333-48091

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Prospectus   —   Rule 424(b)(4)
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 424B4       Filed Pursuant to Rule 424(B)(4)                      78    483K 

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                                                Filed Pursuant to Rule 424(b)(4)
                                          Registration no. 333-48091

PROSPECTUS                                                                      

[TWINLAB LOGO]                  8,000,000 SHARES                                

TWINLAB CORPORATION 
COMMON STOCK

 Of the 8,000,000 shares of common stock, par value $1.00 per share (the
"Common Stock"), offered hereby (the "Offering"), 4,000,000 shares are being    
offered for sale by Twinlab Corporation ("Twinlab" or the "Company") and        
4,000,000 shares are being offered for sale by certain stockholders of the      
Company (the "Selling Stockholders"). Management of the Company will not sell   
any shares of Common Stock in the Offering. The Company will not receive any of 
the proceeds from the sale of shares by the Selling Stockholders. See "Principal
and Selling Stockholders."                                                      

   The Common Stock is traded on the Nasdaq National Market under the symbol
"TWLB." On April 7, 1998, the last sale price of the Common Stock, as reported  
on the Nasdaq National Market, was $37.0625 per share. See "Price Range of      
Common Stock."                                                                  
------------------------------

SEE "RISK FACTORS" BEGINNING ON PAGE 13 FOR A DISCUSSION OF CERTAIN 
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. 
------------------------------

                                                        [Enlarge/Download Table]

============================================================================================================================
                                                                  UNDERWRITING                               PROCEEDS TO    
                                               PRICE TO           DISCOUNTS AND         PROCEEDS TO            SELLING      
                                                PUBLIC           COMMISSIONS(1)         COMPANY(2)         STOCKHOLDERS(2)  
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                            
Per Share...............................        $36.50                $1.46               $35.04               $35.04       
----------------------------------------------------------------------------------------------------------------------------
Total(3)................................     $292,000,000          $11,680,000         $140,160,000         $140,160,000    
============================================================================================================================

(1) The Company and the Selling Stockholders have agreed to indemnify the       
 Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."                 
(2) Before deducting expenses related to the Offering payable by the Company    
   (including certain expenses payable on behalf of the Selling Stockholders),
estimated at $800,000.                                                  
(3) The Company and the Selling Stockholders have granted the Underwriters a    
30-day option to purchase up to an additional 1,200,000 shares of Common
 Stock on the same terms and conditions as set forth above solely to cover
  overallotments, if any. See "Underwriting." If such option is exercised in
full, the total Price to Public, Underwriting Discounts and Commissions,
Proceeds to Company and Proceeds to Selling Stockholders will be        
$335,800,000, $13,432,000, $148,175,365 and $174,192,635, respectively. 

------------------------------

   The shares of Common Stock are being offered by the Underwriters, subject
to prior sale, when, as and if delivered to and accepted by the Underwriters    
against payment therefor and subject to various prior conditions, including     
their right to reject orders in whole or in part. It is expected that delivery  
of the certificates representing the Shares will be made against payment        
therefor on or about April 14, 1998, at the offices of Bear, Stearns & Co. Inc.,
245 Park Avenue, New York, New York 10167.                                      
------------------------------

Joint Book-Running Managers 

BEAR, STEARNS & CO. INC.                            DONALDSON, LUFKIN & JENRETTE
                                                SECURITIES CORPORATION

ADAMS, HARKNESS & HILL, INC.                                                    
               LEHMAN BROTHERS
                                              SALOMON SMITH BARNEY

THE DATE OF THIS PROSPECTUS IS APRIL 7, 1998

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   CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,     
INCLUDING OVER-ALLOTMENTS, STABILIZING AND SHORT-COVERING TRANSACTIONS AND THE  
IMPOSITION OF PENALTY BIDS. SEE "UNDERWRITING."                                 

   CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ALSO ENGAGE IN PASSIVE
MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN 
ACCORDANCE WITH RULE 103 OF REGULATION M UNDER THE SECURITIES EXCHANGE ACT OF   
1934, AS AMENDED. SEE "UNDERWRITING."                                           

------------------------

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") in Washington, D.C. a Registration Statement on Form S-3 (the     
"Registration Statement") under the Securities Act with respect to the Common   
Stock offered hereby. As used herein, the term "Registration Statement" means   
the initial Registration Statement and any and all amendments thereto. This     
Prospectus omits certain information contained in the Registration Statement as 
permitted by the rules and regulations of the Commission. For further           
information with respect to the Company and the Common Stock offered hereby,    
reference is made to the Registration Statement, including the exhibits thereto.
Statements herein concerning the contents of any contract or other document are 
not necessarily complete and in each instance reference is made to such contract
or other document filed with the Commission as an exhibit to the Registration   
Statement, each such statement being qualified by and subject to such reference 
in all respects.                                                                

    The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith  
files reports and other information with the Commission. Reports, registration  
statements, proxy statements and other information filed by the Company with the
Commission can be inspected and copied at the public reference facilities       
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room   
1024, Washington, D.C. 20549, and at the Commission's Regional Offices: 500 West
Madison Avenue, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center,   
Suite 1300, New York, New York 10048. Copies of such materials can be obtained  
at prescribed rates from the Public Reference Section of the Commission, 450    
Fifth Street, N.W., Room 1024, Washington, D.C. 20549. The Commission also      
maintains a site on the World Wide Web, the address of which is                 
http://www.sec.gov, that contains reports, proxy and information statements and 
other information regarding issuers, such as the Company, that file             
electronically with the Commission. The Company has been an electronic filer    
since September 1996.                                                           

   The Common Stock is quoted for trading on the Nasdaq National Market, and
the Registration Statement and such reports and other information concerning the
Company may also be inspected at the offices of the Nasdaq National Market      
located at 1735 K Street, N.W., Washington, D.C. 20006.                         

  The Company will furnish holders of the Common Stock with annual reports
containing among other information, audited financial statements certified by an
independent public accounting firm and quarterly reports containing unaudited   
condensed financial information for the first three quarters of each fiscal     
year. The Company also intends to furnish such other reports as it may determine
or as may be required by law.                                                   

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INCORPORATION OF CERTAIN INFORMATION BY REFERENCE 

     The following documents heretofore filed by the Company with the Commission
pursuant to the 1934 Act, are hereby incorporated and made a part of this       
Prospectus by reference, except as superseded or modified herein:               

  1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1997;                                                    

     2. The description of the Company's Common Stock contained in the
Company's Form 8-A, dated October 21, 1996; and       

     3. The Company's proxy statement on Schedule 14A, dated May 19, 1997.

    All documents subsequently filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act prior to the termination of the Offering to  
which this Prospectus relates shall be deemed to be incorporated by reference   
into this Prospectus and to be part of this Prospectus from the date of filing  
thereof. Any statement incorporated herein shall be deemed to be modified or    
superseded for purposes of this Prospectus to the extent that a statement       
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such       
statement. Any statement so modified or superseded shall not be deemed, except  
as so modified or superseded, to constitute a part of this Prospectus.          

    The Company undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus has been delivered, upon
the written or oral request of any such person, a copy of any or all documents  
incorporated by reference herein (not including exhibits to those documents     
unless such exhibits are specifically incorporated by reference into the        
information incorporated into this Prospectus). Requests for such copies should 
be directed to Philip M. Kazin, Esq., General Counsel, Twinlab Corporation, 2120
Smithtown Avenue, Ronkonkoma, N.Y. 11779, telephone (516) 467-3140.             

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PROSPECTUS SUMMARY

   The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and financial statements,    
including the notes thereto, appearing elsewhere or incorporated by reference in
this Prospectus. Unless the context otherwise requires, the terms "Company" and 
"Twinlab" refer to Twinlab Corporation and, as applicable, its direct and       
indirect subsidiaries, Twin Laboratories Inc. ("Twin"), Advanced Research Press,
Inc. ("ARP"), and Changes International of Fort Walton Beach, Inc. ("Changes    
International"). Except where otherwise indicated, the information in this      
Prospectus assumes that the over-allotment option granted to the Underwriters   
will not be exercised.                                                          

THE COMPANY 

     The Company is one of the leading manufacturers and marketers of brand name
nutritional supplements sold through domestic health food stores and is also    
engaged in the sale of its products through national and regional drug store    
chains, supermarkets, mass market retailers and Changes International, its      
recently acquired network marketing company. The Company produces a full line of
nutritional supplements and offers the broadest product line in the industry    
with more than 940 products and 1,700 stockkeeping units (SKU's). The Company's 
product line includes vitamins, minerals, amino acids, fish and marine oils,    
sports nutrition products and special formulas marketed under the TWINLAB(R)    
trademark, a full line of herbal supplements and phytonutrients marketed under  
the Nature's Herbs(R) and HealthCare Naturals(R) trademarks and herb teas       
marketed under the Alvita(R) trademark. In addition, the Company markets a line 
of nutritional supplements exclusively through Changes International. The       
Company emphasizes the development and introduction of high-quality, unique     
nutraceuticals and other products in response to emerging trends in the         
nutritional supplement industry. The Company's broad product line, strong       
history of new product introductions and innovations, superior marketing and    
advertising programs and premium product quality have established TWINLAB,      
Nature's Herbs and Alvita as leading and widely-recognized brands in the        
nutritional supplement industry.                                                

     Under the leadership of the Blechman family, Twinlab has achieved increased
net sales and income from operations every year since 1990. Since 1993, the     
Company's net sales and income from operations have grown at compound annual    
growth rates of 20.9% and 30.9%, respectively. For the year ended December 31,  
1997, the Company generated net sales, net income and net income per share of   
$213.2 million, $22.7 million and $0.84, respectively.                          

     The Company's products target consumers who utilize nutritional supplements
in their daily diet and who demand premium quality ingredients in a broad       
variety of dosages and delivery methods. To reach the broadest possible consumer
market, the Company has developed a multi-branded and multi-channel distribution
strategy, consisting of the following categories:                               

  - Health Food Stores -- The Company's TWINLAB, Nature's Herbs and Alvita
brand products are sold through a network of approximately 60     
 distributors to nearly 11,000 health food stores and other selected
retail outlets. The health food store channel of distribution has 
    continued to experience significant growth in recent years as national
chains, including those which sell the Company's products, such as
 General Nutrition Companies, Inc. ("GNC"), Whole Foods Market, Inc.
("WFM"), Wild Oats Markets, Inc. ("Wild Oats") and other industry 
  participants continue to add stores in new and existing markets. The
     Company believes that it has a competitive advantage in the health food
     store channel due to the high quality of its products which is a direct
result of its use of premium ingredients, its modern manufacturing
       facilities and its comprehensive quality control procedures. Sales to the
    health food store channel, primarily through distributors, continue to
   represent the Company's largest market, totaling approximately $171.6
      million, or approximately 80.5%, of the Company's net sales in 1997. The
   Company believes that its products have a presence in over 90% of the
      health food stores in the United States, but that only approximately 12%
  of such stores carry a comprehensive line of the Company's products.
   Management believes that the continued expansion of health food store
     retail outlets and the strong growth characteristics of the nutritional
    supplement industry, combined with health food retailers' success with
the Company's product lines, provide Twinlab with significant     
opportunities to increase sales in the health food store channel. 
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- Mass Market Retailers -- The Company continues to increase its      
penetration of the fast growing mass market retail channel, which 
       consists of drug store chains, supermarkets and other mass merchandisers.
     The Company is currently a provider of private label herbal products to
       Wal-Mart Stores, Inc. ("Wal-Mart"), which are being sold under Wal-Mart's
       proprietary Spring Valley brand name. The Company also sells its products
      through national and regional drug store and supermarket chains, such as
Rite Aid Corporation, Duane Reade Inc., American Stores, Inc. and 
       Albertson's, Inc., under its established TWINLAB, HealthCare Naturals and
Alvita brand names. The Company believes that the mass market     
       distribution channel affords significant growth opportunities and intends
to continue to introduce new products and new brands designed     
  specifically for customers in this channel. During 1998, the Company
plans to introduce a line of sports nutrition products under a new
      proprietary brand name which will be sold exclusively in the mass market
    channel. Approximately $14.0 million or 6.6% of the Company's 1997 net
       sales were attributable to mass market retailers compared to $3.4 million
   or 2.0% in 1996. Due to a variety of recent programs initiated by the
Company, Twinlab expects to experience significant growth in this 
       category during fiscal 1998. See "Recent Trends and Developments -- First
Quarter Trends."                                                  

   - Network Marketing -- Through Changes International, a network marketing
    company which the Company acquired in November 1997, Twinlab develops,
       markets and sells vitamins, herbs and nutritional supplements exclusively
       under the Changes(R) brand name. Changes International operates through a
  large sales force of independent distributors located throughout the
United States and Canada who sell directly to consumers. Changes  
     International's products include Changes Relief, an advanced supplement
that nutritionally supports healthy bone and joint functions, and 
   Perfor-Max, an antioxidant formula containing grapeseed extract, pine
   bark extract and tumeric. All of Changes International's products are
     specially formulated and packaged exclusively for the network marketing
     channel and are not intended for sale to retail outlets. The Company is
making a significant investment to enhance Changes International's
      management team, infrastructure and management information systems in an
      effort to expand its distributor and customer base and to increase sales
    in this distribution channel. During 1998, the Company intends to more
    than double the size of Changes International's nutritional supplement
    line, beginning with the introduction of eight new products during the
first half of 1998. Changes International was founded in 1994 and 
    generated gross sales of $41.5 million in 1997 ($7.0 million in fiscal
1997 after its acquisition by the Company).                       

   The Company believes it is well positioned to capitalize on the continued
growth of the vitamin, herb and nutritional supplements market and the multiple 
distribution channels through which these products are sold. Based on estimates 
in 1997 market reports conducted by Packaged Facts (the "Packaged Facts         
Report"), an independent research firm, the retail market for vitamins, minerals
and other supplements (excluding sports nutrition and diet products; the "VMS   
Products") has grown at a compound annual rate of 15% from $3.7 billion in 1992 
to $6.5 billion in 1996. Leading this increase, the retail market for           
supplements (primarily herbal products) has grown at a compound annual rate of  
41.7% from $570 million in 1992 to $2.3 billion in 1996. In addition, according 
to Packaged Facts, the retail market for sports nutrition products has grown at 
a compound annual rate of 10.7% from $585 million in 1992 to $880 million in    
1996. Packaged Facts forecasts 13.6% compound annual growth in the market for   
VMS Products, including 25% compound annual growth in the market for            
supplements, through the year 2001. Management believes this continued growth   
will be fueled by (i) favorable demographic trends towards older Americans, who 
are more likely to consume nutritional supplements; (ii) product introductions  
in response to new scientific research findings supporting the positive health  
effects of certain nutrients; (iii) the nationwide trend toward preventive      
medicine in response to rising health care costs; (iv) increased consumer       
interest in herbs and herb-related supplements; and (v) the heightened          
understanding and awareness of healthier lifestyles and the connection between  
diet and health. Moreover, although the industry has grown dramatically in      
recent years, there is still a large untapped domestic market as only an        
estimated 50% of Americans currently consume vitamins, herbs and nutritional    
supplements on a regular basis.                                                 

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   Vitamins and nutritional supplements are sold through several channels of
distribution: health food stores, mass market retailers (drug store chains,     
supermarkets and other mass merchandisers), and direct sales channels (including
network marketing and catalog distribution). In 1996, according to Packaged     
Facts, the mass market channel accounted for approximately 45.8% of sales of VMS
Products, health food stores accounted for 38.2% of sales and the remaining     
16.0% of sales were generated through direct selling, mail order and the        
internet.                                                                       

BUSINESS STRATEGY 

The Company's strategy is to continue to increase sales and profits by
furthering its leadership position in the sale of vitamins, herbs and           
nutritional supplements to the health food store channel while continuing to    
increase sales and market share in the mass market and network marketing        
channels. The Company also intends to seek opportunities to enter other channels
of distribution, including catalog distribution. Twinlab plans to implement this
strategy both by capitalizing on the strength of its established brands as well 
as through the development and introduction of new brands. In addition, the     
Company expects to continue to develop and introduce new products and product   
innovations for each of its distribution channels, to increase its penetration  
of foreign markets and to provide the advertising, marketing, operational and   
personnel support necessary to grow its businesses. Twinlab intends to achieve  
these goals while continuing its past emphasis on its financial performance and 
the overall efficiency of its operations. Specifically, the Company seeks to:   

     Further Develop Portfolio of Brands -- Twinlab has developed a portfolio of
core brands which are among the most recognized in the vitamin and nutritional  
supplement industry. The Company intends to continue to nurture and extend the  
reach of its TWINLAB, Nature's Herbs and Alvita brands in the health food       
distribution channel while furthering the development of its portfolio of       
private label and proprietary brands, including the HealthCare Naturals and     
Changes brands, targeted to the mass market retail and network marketing        
channels. During 1998, the Company plans to introduce a line of sports nutrition
products under a new proprietary brand name which will be sold exclusively in   
the mass market channel. As in the past, the Company will continue to promote   
its brands through strong marketing and advertising programs. Management        
believes that Twinlab has one of the largest marketing and advertising budgets  
as a percentage of sales in the nutraceutical industry and that the strong brand
name recognition of its products is, in part, a direct result of this support.  
In fiscal 1997, the Company spent $15.9 million, an increase of 25.1% over      
fiscal 1996, on marketing and advertising to promote its products. The Company  
has budgeted $20.5 million for marketing and advertising expenses in fiscal     
1998, a 29.2% increase over fiscal 1997.                                        

     Further Develop Multiple Channels of Distribution -- The Company intends to
continue to increase its penetration of the health food store channel, expand   
its mass market retail and network marketing businesses, and enter additional   
distribution channels, such as catalog distribution, through internal growth and
selective acquisitions. See "Recent Trends and Developments -- Bronson          
Acquisition." By utilizing a multiple distribution channel approach, the Company
believes it will be well positioned to also reach customers who historically    
have not shopped in health food stores.                                         

     Continue to Introduce New Products and Product Innovations -- A cornerstone
of the Company's success has been its ability to rapidly utilize recent         
scientific and medical findings in its new product development efforts. The     
Company has consistently been among the first in its industry to introduce new  
products and product innovations which anticipate and meet customer demands for 
newly identified nutritional supplement benefits. As part of its ongoing        
research and development effort, the Company maintains an extensive database and
actively researches and monitors a wide variety of publications containing      
scientific and medical research. The Company's geographically diverse network of
distributors allows Twinlab to achieve immediate and broad distribution for new 
product launches. From 1991 through 1997, the Company introduced over 560       
products, with over 100 new products introduced in 1997 alone. Net sales during 
1997 from new products introduced in 1997 were approximately $17.7 million, or  
approximately 8.3% of net sales. In 1998, the Company expects to introduce over 
100 new products in the health food store and mass market retail channels, 18 of
which have already been introduced, and plans to more than double the number of 
products offered by Changes International.                                      

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   Increase Penetration of Foreign Markets -- Management believes that there
are substantial opportunities for the Company to expand its presence in foreign 
markets. As part of its continuing efforts to increase international sales, the 
Company recently hired a Director of International Sales. The Company's         
international sales force is supported by a network of 37 overseas distributor  
organizations, serving 56 foreign countries. Approximately 5.1%, or $10.9       
million, of the Company's net sales in 1997 were derived from international     
sales originating from overseas distributor organizations. The Company presently
has distribution agreements covering fourteen western European countries,       
including Great Britain, France, Belgium, the Netherlands and the Scandinavian  
countries; six eastern European countries, including Russia; nine Latin American
countries, including Mexico, Brazil and Argentina; eight Middle Eastern         
countries, including Israel and Saudi Arabia; and several other countries in the
Far East and the Caribbean. The Company has also initiated new programs to      
qualify distributors in Italy and China.                                        

  Supplement Internal Growth Through Strategic Acquisitions -- The Company
actively pursues acquisition opportunities that complement or extend its        
existing product line, expand its distribution channels or are compatible with  
its business philosophy and strategic goals. The Company believes that its      
leading and widely recognized brand names, broad distribution capabilities and  
proven ability to generate sales of its products through successful marketing   
programs provide it with a strategic advantage in identifying potential         
acquisition candidates. In addition, the Company's success with past            
acquisitions provides it with the knowledge to successfully integrate future    
acquisitions into its operations. See "Recent Trends and Developments -- Bronson
Acquisition."                                                                   

     Ongoing Investment in Personnel and Infrastructure -- The Company continues
to make significant investments in developing its management team and building  
its infrastructure to support the growth of its businesses. The Company recently
hired several key individuals, including a new Chief Financial Officer, a       
President of Mass Market Sales and a Director of International Sales, to enhance
its senior management team. As part of its ongoing efforts to maintain its      
reputation for providing the highest quality products and services to its       
customers, the Company continues to invest in its manufacturing and distribution
facilities and management information systems. The Company recently broke ground
on an approximately $13.0 million expansion of its state-of-the-art             
manufacturing, distribution and warehouse facility in American Fork, Utah (the  
"Utah Facility"). The total size of the Utah Facility will increase from 57,000 
square feet to approximately 143,000 square feet and will substantially increase
the Company's production capacity.                                              

  Twinlab was incorporated under the laws of the State of Delaware in 1996
and maintains its principal executive offices at 2120 Smithtown Avenue,         
Ronkonkoma, New York 11779. Its telephone number is 516-467-3140.               

RECENT TRENDS AND DEVELOPMENTS

Bronson Acquisition -- On March 17, 1998, the Company entered into a  
definitive agreement to acquire substantially all of the assets and assume      
certain liabilities of the Bronson division ("Bronson") of Jones Medical        
Industries, Inc. ("Jones") (the "Bronson Acquisition"). The Company expects that
the closing of the Bronson Acquisition will occur during the second quarter of  
fiscal 1998. Bronson's net sales and operating income for the fiscal year ended 
December 31, 1997, were approximately $32.1 million, and $9.5 million,          
respectively. The purchase price is $55.0 million in cash, subject to certain   
adjustments, which the Company intends to finance with a portion of the net     
proceeds of the Offering. In the event the Offering is not consummated, the     
Company would seek to amend its Revolving Credit Facility (as hereinafter       
defined) to increase the permitted borrowings and to finance the Bronson        
Acquisition with borrowings thereunder.                                         

    Bronson manufactures, markets and distributes a line of over 350 vitamins,
herbs, nutritional supplements and health and beauty aids, which are sold under 
the Bronson(R) name through catalogs and direct mailings to customers, including
healthcare and nutritional professionals and mail order and retail customers.   
Bronson also markets its MD Pharmaceutical(R) brand exclusively to United States
military commissaries. Bronson's products are manufactured in a 30,000 square   
foot facility in Tempe, Arizona, which the Company will acquire and operate     
after the closing. This facility also manufactures private label nutritional    
supplements for other companies on a contract manufacturing basis. Pursuant to a
Transition Services Agreement, Jones will                                       
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continue to provide sales services and packaging and distribution operations for
Bronson's products through December 31, 1998.                                   

 The Bronson Acquisition is subject to certain customary conditions, and
there can be no assurance that the Bronson Acquisition will be consummated. The 
Offering is not contingent upon the consummation of the Bronson Acquisition.    

    First Quarter Trends -- In the first quarter of 1998, the Company received
a substantial increase in orders for its herbal supplement products, including a
significant increase in orders from Wal-Mart for herbal products which are being
sold under Wal-Mart's proprietary Spring Valley brand name. This increase is due
to increased demand at the retail level and to the fact that the number of SKU's
sold under this brand name at Wal-Mart more than doubled during the first       
quarter of 1998. The Company has made several adjustments to its operations to  
accommodate this increased demand for its herbal products, including the use of 
production capacity at the New York Facility (as hereinafter defined) to produce
herbal supplement products and the installation of additional manufacturing     
equipment at both the New York and Utah Facilities. As a result of these        
operational adjustments and the Company's decision to reduce promotions offered 
to distributors during the first quarter of 1998, the Company's mix of product  
sales during the first quarter of 1998 will differ substantially from the       
product mix in the comparable period in 1997. For the first quarter of 1998,    
herbal supplements will represent a substantially greater portion of the        
Company's total net sales, and sales of vitamins, minerals and nutritional      
supplements products will represent a smaller percentage of total net sales and 
decline significantly from the comparable period in 1997. Nevertheless, the     
Company anticipates that its overall growth rate in net sales in the first      
quarter of 1998 will be comparable to that achieved in the first quarter of     
1997, as the increased sales of herbal products will more than offset the       
decreased sales of vitamins, minerals and nutritional supplements (all of the   
foregoing first quarter comparisons exclude the impact of Changes               
International). The Company believes that there has been no material decline in 
retail sales of its vitamin, mineral and nutritional supplement products during 
the first quarter of 1998, as there has been adequate inventory of its products 
in the distribution channel. The Company plans to adjust its production mix     
during the second quarter of 1998 to increase the production of vitamins,       
minerals and nutritional supplements compared to the first quarter of 1998, as  
additional capacity comes on line and production schedules are adjusted, and    
expects to realize increased sales of these products during the second quarter  
of 1998 as compared to the first quarter of 1998.                               

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THE OFFERING

Common Stock to be sold by the                                                  
Company:............................         4,000,000 shares                   

Common Stock to be sold by the                                                  
Selling Stockholders:...............         4,000,000 shares                   

Common Stock to be outstanding after                                            
the Offering:.......................        31,321,900 shares(1)                

Use of Proceeds.....................        The Company intends to use $56.5    
                                            million of the net proceeds from the
                                          Offering to pay the purchase price
                                   for the Bronson Acquisition
                                   (including related fees and
                                           expenses). In addition, the Company
                                          intends to use approximately $40.1
                                            million of the net proceeds from the
                                        Offering to redeem $35.0 million
                                          principal amount (plus accrued and
                                          unpaid interest and the applicable
                                          premium thereon) of Twin's 10 1/4%
                                          Senior Subordinated Notes due 2006
                                        (the "Notes"), and approximately
                                          $9.9 million to reduce outstanding
                                      borrowings under the Company's
                                            Revolving Credit Facility (including
                                   accrued and unpaid interest
                                            thereon). The remaining net proceeds
                                          from the Offering will be used for
                                         working capital and other general
                                       corporate purposes. See "Use of
                  Proceeds."

Nasdaq National Market symbol.......        TWLB                                
---------------                                                                 

(1) Does not include an aggregate of 390,600 shares of Common Stock issuable    
upon the exercise of outstanding stock options with a weighted average  
exercise price of $23.27 per share.                                     

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SUMMARY HISTORICAL FINANCIAL DATA 

  The summary information below presents historical consolidated financial
data for the periods indicated which has been derived from the Consolidated     
Financial Statements of the Company. The summary information below also presents
pro forma financial data relating to (i) the Company's conversion of tax status 
from an "S" corporation to a "C" corporation as a result of the Transactions (as
hereinafter defined) and (ii) the Transactions and the IPO (as hereinafter      
defined). The summary historical financial data should be read in conjunction   
with "Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Selected Historical Financial Data" and the Consolidated Financial
Statements of the Company and the notes thereto included elsewhere in this      
Prospectus.                                                                     

                                                        [Enlarge/Download Table]

                                                          YEAR ENDED DECEMBER 31,                  
                                            ----------------------------------------------------   
                                             1993       1994       1995       1996        1997     
                                            -------   --------   --------   --------    --------   
                                              (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)     
                                                                                                   
OPERATING DATA:                                                                                    
  Net sales...............................  $99,897   $117,342   $148,735   $170,075    $213,229   
  Gross profit............................   37,766     47,095     58,803     70,248      92,282   
  Operating expenses......................   21,125     23,022     27,191     30,784      43,433   
  Income from operations..................   16,641     24,073     31,612     39,464      48,849   
  Interest expense........................      487        761        866     10,005      12,315   
  Nonrecurring and transaction expenses...       --         --        656     15,700(a)       --   
  Net income..............................  $16,676   $ 21,693   $ 30,224   $ 11,796(a) $ 22,671   
                                            =======   ========   ========   ========    ========   
  Basic and diluted net income per                                                                 
     share(b).............................  $  0.62   $   0.80   $   1.12   $   0.26(a) $   0.84(c)
                                            =======   ========   ========   ========    ========   
  Diluted weighted average shares                                                                  
     outstanding(d).......................   27,000     27,000     27,000     27,000      27,078   
PRO FORMA RELATING TO CHANGE IN TAX                                                                
  STATUS:(e)                                                                                       
  Historical income before provision for                                                           
     income taxes and extraordinary                                                                
     item.................................  $16,906   $ 21,938   $ 30,464   $ 14,384               
  Pro forma provision for income taxes....    6,644      9,087     12,060      5,466               
                                            -------   --------   --------   --------               
  Pro forma income before extraordinary                                                            
     item.................................   10,262     12,851     18,404      8,918               
  Extraordinary item......................       --         --         --     (1,792)(f)           
                                            -------   --------   --------   --------               
  Pro forma net income....................  $10,262   $ 12,851   $ 18,404   $  7,126               
                                            =======   ========   ========   ========               
  Basic and diluted income before                                                                  
     extraordinary item per share(b)......       --         --   $   0.68   $   0.15          --   
                                                                 ========   ========               
  Basic and diluted net income per                                                                 
     share(b).............................                       $   0.68   $   0.08               
                                                                 ========   ========               
PRO FORMA FOR THE TRANSACTIONS AND THE IPO:(g)                                                     
  Net income..............................       --         --   $ 11,429   $ 16,729          --   
                                                                 ========   ========               
  Basic and diluted net income per                                                                 
     share................................       --         --   $   0.42   $   0.62          --   
                                                                 ========   ========               
OTHER DATA:                                                                                        
  Income from operations margin(h)........     16.7%      20.5%      21.3%      23.2%       22.9%  
  Capital expenditures....................  $ 4,904   $  1,786   $  2,641   $  2,252    $  3,842   

                                                        [Enlarge/Download Table]

                                                               AS OF DECEMBER 31, 1997   
                                                             ----------------------------
                                                             HISTORICAL    AS ADJUSTED(i)
                                                             ----------    --------------
                                                                                         
BALANCE SHEET DATA:                                                                      
  Cash and cash equivalents.................................  $  4,029        $ 34,186   
  Net working capital (excluding cash and cash equivalents                               
     and current debt)......................................    57,474          68,050   
  Total assets..............................................   171,324         258,442   
  Total debt (including current debt).......................   114,238          65,488   
  Shareholders' equity......................................    30,344         166,762   

(footnotes on following page)                                                   

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(a) Reflects $15.3 million of nonrecurring non-competition agreement expense and
$0.4 million of Transaction expenses.                                   

(b) Basic and diluted income per share has been computed by dividing net income 
    (and pro forma income before extraordinary item and pro forma net income for
    1995 and 1996), after reduction for Preferred Stock (as hereinafter defined)
dividends, by the applicable weighted average shares outstanding.       

(c) Supplemental basic and diluted net income per share for the year ended      
December 31, 1997, after giving effect to the Redemption (as hereinafter
  defined), would be $0.89. Such calculation assumes the Redemption occurred
    on January 1, 1997, and includes the assumed issuance of 1,093,750 shares of
Common Stock required to effect the Redemption and the elimination of   
interest expense and amortization of deferred finance costs, net of tax,
relating to the redeemed Notes.                                         

(d) Diluted weighted average shares outstanding for 1993 through 1996 represents
   the number of equivalent shares outstanding after giving retroactive effect
to Twinlab's 18.5 for 1 stock split (effected in the form of a stock    
  dividend) and assumes that the 10,175,000 shares of Common Stock issued in
  connection with the Acquisition (as hereinafter defined) and the 8,500,000
shares of Common Stock issued in connection with the Company's IPO were 
outstanding. See Notes to the Consolidated Financial Statements of the  
Company included elsewhere in this Prospectus.                          

(e) Prior to May 1996, the Company consisted of "S" corporations and,           
   accordingly, federal and state taxes were generally paid at the shareholder
 level only. Upon consummation of the Transactions, the Company eliminated
  its "S" corporation status and, accordingly, became subject to federal and
state income taxes.                                                     

(f) Represents the write-off of previously deferred finance costs incurred in   
  connection with the Original Credit Facility (as hereinafter defined) (the
"Extraordinary Item").                                                  

(g) The unaudited pro forma results of operations assume the Transactions and   
 the subsequent IPO occurred on January 1, 1995, and exclude the effect of
    (i) the nonrecurring non-competition agreement expense, (ii) the Transaction
 expenses, (iii) the Extraordinary Item and (iv) the dividends paid on the
   Preferred Stock which was redeemed in connection with the IPO, and reflects
    the additional interest expense relating to the financing of the Acquisition
    and the change in tax status described in Note (e) above. This data has been
prepared for comparative purposes only and does not purport to represent
what the Company's actual results of operations would have been had the 
Transactions and the subsequent IPO in fact occurred on January 1, 1995.

(h) Income from operations margin equals income from operations as a percentage 
of net sales.                                                           

(i) Gives effect to the consummation of the Offering and the application of the 
  estimated net proceeds therefrom as if they occurred on December 31, 1997.
   The application of the net proceeds assumes the consummation of the Bronson
   Acquisition and the repayment of approximately $13.9 million of outstanding
    borrowings under the Revolving Credit Facility (including accrued and unpaid
interest thereon), which borrowings are expected to have been reduced   
 through repayments to $9.9 million (including accrued and unpaid interest
thereon), prior to the consummation of the Offering.                    

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RISK FACTORS

  Prospective purchasers of the Common Stock should carefully consider the
following risk factors, as well as the other information contained, and         
incorporated by reference, in this Prospectus before making an investment in the
Common Stock.                                                                   

This Prospectus contains or incorporates by reference certain         
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended (the "Securities Act"), which represent the Company's   
expectations or beliefs, including, but not limited to, statements concerning   
industry performance, the Company's operations, performance, financial          
condition, growth and acquisition strategies, margins and growth in sales of the
Company's products. For this purpose, any statements contained or incorporated  
by reference in this Prospectus that are not statements of historical fact may  
be deemed to be forward-looking statements. Such statements can be identified by
the use of forward-looking terminology such as "believes," "expects," "may,"    
"will," "should" or "anticipates" or the negative thereof or other variations   
thereon or comparable terminology, or by discussions of strategy. See, e.g.,    
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations," "Prospectus Summary -- Business Strategy," and                     
"Business -- Business Strategy." No assurance can be given that the future      
results covered by the forward-looking statements will be achieved. These       
statements by their nature involve substantial risks and uncertainties, certain 
of which are beyond the Company's control. The following matters constitute     
cautionary statements identifying important factors with respect to such        
forward-looking statements, including certain risks and uncertainties, that     
could cause actual results to vary materially from the future results covered in
such forward-looking statements. Other factors could also cause actual results  
to vary materially from the future results covered in such forward-looking      
statements.                                                                     

UNCERTAINTY RELATED TO ACQUISITIONS; BROAD DISCRETION IN USE OF PROCEEDS        

The Company intends to actively pursue acquisition opportunities that 
complement or extend its existing products, expand its distribution channels or 
are compatible with its business philosophy and strategic goals. Acquisitions   
involve a number of risks that could adversely affect the Company's operating   
results, including the diversion of management's attention, the assimilation of 
operations and personnel of the acquired companies, the amortization of acquired
intangible assets and the potential loss of key employees of the acquired       
companies. There can be no assurance that the Company will consummate future    
acquisitions on satisfactory terms, if at all, that adequate financing will be  
available on terms acceptable to the Company, if at all, or be permitted under  
the Company's financing instruments, that any acquired product lines or         
businesses will be successfully integrated or that such product lines or        
businesses will ultimately have a positive impact on the Company, its financial 
condition or results of operations. In addition, such acquisitions could result 
in substantial equity dilution to existing stockholders. See                    
"Business -- Business Strategy."                                                

The Company intends to finance the purchase price of the Bronson      
Acquisition with $56.5 million (including related fees and expenses) of the net 
proceeds of the Offering. There can be no assurance that the Bronson Acquisition
will be consummated. In the event the Bronson Acquisition is not consummated,   
the Company intends to use the resulting excess net proceeds from the Offering  
for working capital and other general corporate purposes, including to pursue   
acquisition opportunities. Accordingly, the Company may have broad discretion in
using the net proceeds of the Offering. An investor will not have the           
opportunity to evaluate the economic, financial and other relevant information  
which will be utilized by the Company in determining the application of such    
proceeds. See "Use of Proceeds."                                                

DEPENDENCE ON KEY PERSONNEL                                                     

  The Company believes that its continued success depends to a significant
extent on the management and other skills of Brian Blechman, Dean Blechman, Neil
Blechman, Ross Blechman and Steve Blechman (the "Blechman Brothers"), as well as
its ability to retain other key employees and to attract skilled personnel in   
the future to manage the growth of the Company. The loss or unavailability of   
the services of one or more of the Blechman Brothers could have a material      
adverse effect on the Company. The Company has employment                       

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agreements with each of the Blechman Brothers and upon completion of the        
Offering each of the Blechman Brothers will own approximately 5.3% of the       
outstanding Common Stock. See "Management."                                     

CERTAIN GOVERNMENT ACTION AND ADVERSE PUBLICITY REGARDING CERTAIN PRODUCTS      
CONTAINING EPHEDRINE                                                            

 Approximately 15 of the Company's products include an herb known as "Ma
Huang," which contains naturally-occurring ephedrine. Certain of such products  
also contain caffeine or other central nervous system stimulants. Such products 
accounted for approximately 13.0% of the Company's net sales in 1997. The       
Company's products which contain Ma Huang are generally marketed for            
bodybuilding, weight loss, sports nutrition and other purposes, including       
increased endurance and energy, generally in conjunction with diet or exercise, 
and as natural alternatives to over-the-counter medications.                    

  Ma Huang has been the subject of certain adverse publicity in the United
States and other countries relating to alleged harmful or adverse effects. The  
United States Food and Drug Administration (the "FDA") has proposed regulations 
relating to the sale of dietary supplements containing Ma Huang which, if       
promulgated in final form, would require the Company to substantially           
reformulate and relabel almost all of its Ma Huang products, limit potency,     
require warnings, prohibit certain combination products and preclude the Company
from making bodybuilding and weight loss claims for such products. Comments from
industry participants and inquiries from Committees of the United States        
Congress have been filed with the FDA challenging the scientific and legal basis
for the proposed regulations. The Company is not able to predict whether the    
FDA's proposed regulations will become final. There can be no assurance as to   
the effect that any resulting reformulation, relabeling or change in the        
marketing of the Company's products would have on the sales of such products. In
1996, the Company introduced a line of Ma Huang-free products as alternatives to
certain of its bodybuilding and sports nutrition products which currently       
contain Ma Huang. The Company's net sales of Ma Huang-free products were $1.9   
million for fiscal 1997. There can be no assurance that sales of such           
alternative products would offset any decrease in sales attributable to any     
reformulation or relabeling of the Company's Ma Huang products.                 

     A number of state and local governments have proposed or passed legislation
prohibiting or regulating the sale of Ma Huang products. The Company's products 
containing Ma Huang may become subject to further federal, state, local or      
foreign laws or regulations, which could also require the Company to reformulate
its products with reduced ephedrine levels or with a substitute for Ma Huang    
and/or relabel its products with different warnings or revised directions for   
use. There can be no assurance that the loss of sales of the Company's Ma Huang 
products would not have a material adverse effect on the Company. See           
"Business -- Legal Matters."                                                    

LEGAL MATTERS                                                                   

The Company, like other retailers, distributors and manufacturers of  
products that are ingested, faces an inherent risk of exposure to product       
liability claims in the event that the use of its products results in injury.   
The Company may be subjected to various product liability claims, including,    
among others, that its products contain contaminants or include inadequate      
instructions as to use or inadequate warnings concerning side effects and       
interactions with other substances. While such claims to date have not been     
material to the Company and the Company maintains product liability insurance,  
there can be no assurance that product liability claims and the resulting       
adverse publicity will not have a material adverse effect on the Company. See   
"Business -- Legal Matters." The Company carries insurance in the types and     
amounts that management considers reasonably adequate to cover the risks        
associated with its business. There can be no assurance that such insurance will
continue to be available at a reasonable cost, or if available will be adequate 
to cover liabilities.                                                           

 The State of California and the National Resources Defense Council (the
"NRDC") filed lawsuits against the Company and a large number of manufacturers  
of dietary supplements containing calcium, claiming that naturally-occurring    
lead levels in these supplements exceed acceptable levels under California law  
("Proposition 65"). The NRDC settled its suit with the manufacturers, including 
the Company. The State of California settled the first of two phases of its     
lawsuit with the Company and the other manufacturers                            

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and is engaged in settlement discussions with respect to the remainder of the   
case. The Company also received notice of a possible State of California legal  
claim relating to alleged toxic impurities in fish oil products. No action has  
been filed. There can be no assurance that the Company will not be the subject  
of future Proposition 65 claims asserted by the State of California or private  
parties or that any such claim or the existing California lawsuit, if           
successful, might not have a material adverse effect on the Company's           
operations.                                                                     

The Company is presently engaged in various other legal actions, and, 
although ultimate liability cannot be determined at the present time, the       
Company believes that the amount of any such liability, if any, from these other
actions, after taking into consideration the Company's insurance coverage, will 
not have a material adverse effect on its results of operations and financial   
condition. See "Business -- Legal Matters."                                     

GOVERNMENT REGULATION                                                           

The manufacturing, processing, formulating, packaging, labeling and   
advertising of the Company's products are subject to regulation by one or more  
federal agencies, including the FDA, the Federal Trade Commission (the "FTC"),  
the United States Department of Agriculture and the Environmental Protection    
Agency. These activities are also regulated by various agencies of the states,  
localities and foreign countries to which the Company's products are distributed
and in which the Company's products are sold. The FDA, in particular, regulates 
the formulation, manufacture and labeling of vitamin and other nutritional      
supplements.                                                                    

   On October 25, 1994, the President signed into law the Dietary Supplement
Health and Education Act of 1994 ("DSHEA"). This new law revises the provisions 
of the Federal Food, Drug, and Cosmetic Act (the "FFDC Act") concerning the     
composition and labeling of dietary supplements and, in the judgment of the     
Company, is favorable to the dietary supplement industry. The legislation       
creates a new statutory class of "dietary supplements." This new class includes 
vitamins, minerals, herbs, amino acids and other dietary substances for human   
use to supplement the diet, and the legislation grandfathers, with certain      
limitations, dietary ingredients on the market before October 15, 1994. A       
dietary supplement which contains a new dietary ingredient, one not on the      
market before October 15, 1994, will require evidence of a history of use or    
other evidence of safety establishing that it will reasonably be expected to be 
safe. The substantial majority of the products marketed by the Company are      
classified as dietary supplements under the FFDC Act.                           

  Both foods and dietary supplements are subject to the Nutrition Labeling
and Education Act of 1990 (the "NLEA"), which prohibits the use of any health   
claim for foods, including dietary supplements, unless the health claim is      
supported by significant scientific agreement and is either pre-approved by the 
FDA or the subject of substantial government scientific publications and a      
notification to the FDA. To date, the FDA has approved the use of only limited  
health claims for dietary supplements. However, among other things, the DSHEA   
amends, for dietary supplements, the NLEA by providing that "statements of      
nutritional support" may be used in labeling for dietary supplements without FDA
preapproval if certain requirements, including prominent disclosure on the label
of the lack of FDA review of the relevant statement, possession by the marketer 
of substantiating evidence for the statement and post-use notification to the   
FDA, are met. Such statements may describe how particular nutritional           
supplements affect the structure, function or general well-being of the body    
(e.g. "promotes your cardiovascular health").                                   

   The FDA issued final dietary supplement labeling regulations in 1997 that
require the Company to revise most of its product labels by 1999. The           
regulations also currently require the Company to submit notification to the FDA
of all "statements of nutritional support," a process that the Company has not  
fully completed.                                                                

     Advertising and label claims for dietary supplements and conventional foods
have been regulated by state and federal authorities under a number of disparate
regulatory schemes. There can be no assurance that a state will not interpret   
claims presumptively valid under federal law as illegal under that state's      
regulations, or that future FDA regulations or FTC decisions will not restrict  
the permissible scope of such claims.                                           

  Governmental regulations in foreign countries where the Company plans to
commence or expand sales may prevent or delay entry into the market or prevent  
or delay the introduction, or require the reformulation, of certain of the      
Company's products. Compliance with such foreign governmental regulations is    
generally the                                                                   

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responsibility of the Company's distributors for those countries. These         
distributors are independent contractors over whom the Company has limited      
control.                                                                        

     As a result of the Company's efforts to comply with applicable statutes and
regulations, the Company has from time to time reformulated, eliminated or      
relabeled certain of its products and revised certain provisions of its sales   
and marketing program. The Company cannot predict the nature of any future laws,
regulations, interpretations or applications, nor can it determine what effect  
additional governmental regulations or administrative orders, when and if       
promulgated, would have on its business in the future. They could, however,     
require the reformulation of certain products to meet new standards, the recall 
or discontinuance of certain products not capable of reformulation, additional  
recordkeeping, expanded documentation of the properties of certain products,    
expanded or different labeling, and/or scientific substantiation. Any or all of 
such requirements could have a material adverse effect on the Company's results 
of operations and financial condition.                                          

   Compliance with the provisions of national, state and local environmental
laws and regulations has not had a material adverse effect upon the capital     
expenditures, earnings, financial position, liquidity or competitive position of
the Company. See also "Business -- Legal Matters" and "-- Regulatory Matters."  

RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS                     

  The Indenture (as hereinafter defined) and the Revolving Credit Facility
impose upon the Company certain financial and operating covenants, including,   
among others, requirements that the Company maintain certain financial ratios   
and satisfy certain financial tests, limitations on capital expenditures and    
restrictions on the ability of the Company to incur debt, pay dividends or take 
certain other corporate actions, all of which may restrict the Company's ability
to expand or to pursue its business strategies. Changes in economic or business 
conditions, results of operations or other factors could in the future cause a  
violation of one or more covenants in the Company's debt instruments. See       
"Description of Certain Indebtedness."                                          

COMPETITION                                                                     

The business of developing, manufacturing and selling vitamins, herbs,
sports nutrition products, nutritional supplements and other nutraceuticals is  
highly competitive. There are numerous companies in the vitamin and nutritional 
supplement industry selling products to retailers such as mass merchandisers,   
drug store chains, independent drug stores, supermarkets and health food stores.
Certain of the Company's competitors are substantially larger and have greater  
financial resources than the Company. See "Business -- Competition."            

ABSENCE OF CLINICAL STUDIES AND SCIENTIFIC REVIEW; EFFECT OF PUBLICITY          

While the Company conducts extensive quality control testing on its   
products, the Company generally does not conduct or sponsor clinical studies on 
its products. See "Business -- Manufacturing and Product Quality." The Company's
products consist of vitamins, minerals, herbs and other ingredients that the    
Company regards as safe when taken as suggested by the Company. However, because
the Company is highly dependent upon consumers' perception of the safety and    
quality of its products as well as similar products distributed by other        
companies (which may not adhere to the same quality standards as the Company),  
the Company could be adversely affected in the event any of the Company's       
products, or any similar products distributed by other companies, should prove  
or be asserted to be harmful to consumers. In addition, because of the Company's
dependence upon consumer perceptions, adverse publicity associated with illness 
or other adverse effects resulting from consumers' failure to consume the       
Company's products as suggested by the Company or other misuse or abuse of the  
Company's products or any similar products distributed by other companies could 
have a material adverse effect on the Company's results of operations and       
financial condition.                                                            

Furthermore, the Company believes the recent growth experienced by the
nutritional supplement market is based in part on national media attention      
regarding recent scientific research suggesting potential health benefits from  
regular consumption of certain vitamins and other nutritional products. Such    
research has been described in major medical journals, magazines, newspapers and
television programs. The scientific research                                    
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to date is preliminary, and there can be no assurance of future favorable       
scientific results and media attention or of the absence of unfavorable or      
inconsistent findings.                                                          

DEPENDENCE ON DISTRIBUTORS                                                      

   The Company's success depends in part upon its ability to attract, retain
and motivate a large base of distributors, and its ability to maintain a        
satisfactory relationship with Tree of Life Inc. ("Tree of Life") and GNC. Tree 
of Life and GNC accounted for approximately 19% and 23%, respectively, of the   
Company's net sales in 1997. The loss of Tree of Life or GNC as a distributor,  
or the loss of a significant number of other distributors, or a significant     
reduction in purchase volume by Tree of Life, GNC or such other distributors,   
for any reason, would have a material adverse effect on the Company's results of
operations and financial condition. See "Business -- Sales and Distribution."   

AVAILABILITY OF RAW MATERIALS                                                   

     Substantially all of the Company's herbal supplements and herb teas contain
ingredients that are harvested by and obtained from third-party suppliers, and  
many of those ingredients are harvested internationally and only once per year  
or on a seasonal basis. An unexpected interruption of supply, such as a harvest 
failure, could cause the Company's results of operations derived from such      
products to be adversely affected. Although the Company has generally been able 
to raise its prices in response to significant increases in the cost of such    
ingredients, the Company has not always in the past been, and may not in the    
future always be, able to raise prices quickly enough to offset the effects of  
such increased raw material costs.                                              

INTELLECTUAL PROPERTY PROTECTION                                                

  The Company's trademarks are valuable assets which are very important to
the marketing of its products. The Company's policy is to pursue registrations  
for all of the trademarks associated with its key products. The Company has     
approximately 289 trademark registrations with the United States Patent and     
Trademark Office. The Company relies on common law trademark rights to protect  
its unregistered trademarks. Common law trademark rights do not provide the     
Company with the same level of protection as would U.S. federal registered      
trademarks. In addition, common law trademark rights extend only to the         
geographic area in which the trademark is actually used, while U.S. federal     
registration prohibits the use of the trademark by any third party anywhere in  
the United States.                                                              

CONTROL BY PRINCIPAL STOCKHOLDERS; SHARES ELIGIBLE FOR FUTURE SALE              

Upon completion of the Offering, Green Equity Investors II, L.P., an  
affiliate of Leonard Green & Partners, L.P. ("GEI") will own 16.8% and the      
Blechman Brothers will own 26.5%, of the Common Stock of Twinlab. As a result,  
GEI and the Blechman Brothers will have significant influence over all matters  
requiring approval by the Company's stockholders without the approval of        
minority stockholders. Such influence could adversely affect the market price of
the Common Stock or delay or prevent a change in control of the Company. See    
"Principal and Selling Stockholders."                                           

 The Blechman Brothers and Stephen L. Welling (collectively, the "Senior
Executive Officers") and GEI are eligible to sell their shares of Common Stock  
pursuant to Rule 144 ("Rule 144") under the Securities Act at prescribed times  
and subject to the manner of sale, volume, notice and information restrictions  
of Rule 144. The Company has granted the Senior Executive Officers and the      
Selling Stockholders certain demand and piggyback registration rights covering  
an aggregate of 18,176,250 shares of Common Stock (14,176,250 shares after the  
consummation of the Offering). The Senior Executive Officers and the Selling    
Stockholders, who collectively are the beneficial owners of an aggregate of     
18,180,420 shares of Common Stock (14,180,420 shares after the consummation of  
the Offering), and the Company have agreed with the Underwriters, subject to    
certain exceptions, not to directly or indirectly, offer, sell, contract to     
sell, grant any option to purchase or otherwise dispose of, without the prior   
written consent of Bear, Stearns & Co. Inc. ("Bear Stearns"), any Common Stock, 
or any securities convertible into or exchangeable or exercisable for, or       
warrants, options or rights to purchase or acquire Common Stock or in any other 
manner transfer all or a portion of the economic                                

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consequences associated with the ownership of any Common Stock, or enter into   
any agreement to do any of the foregoing, for a period of 90 days after the date
of this Prospectus. Upon the expiration of such 90 day period, such holders will
in general be entitled to dispose of their shares of Common Stock, although the 
shares of Common Stock held by affiliates of the Company will continue to be    
subject to the restrictions of Rule 144 under the Securities Act. Sales of      
substantial amounts of such shares in the public market or the perception that  
such sales could occur could adversely affect the market price of the shares of 
Common Stock and the Company's ability to raise additional capital at a price   
favorable to the Company. See "Shares Eligible for Future Sale" and             
"Underwriting."                                                                 

ANTI-TAKEOVER PROVISIONS                                                        

     The Company's Second Amended and Restated Certificate of Incorporation (the
"Certificate of Incorporation") and its Amended and Restated By-laws (the       
"By-laws"), as well as Delaware corporate law, contain certain provisions that  
could have the effect of making it more difficult for a third party to acquire, 
or discouraging a third party from attempting to acquire, control of the        
Company. Certain of these provisions impose various procedural and other        
requirements, including advance notice and other provisions, that could make it 
more difficult for stockholders to effect certain corporate actions. The        
Company's Board of Directors has the authority to issue additional shares of    
preferred stock and to determine the designations, preferences and rights and   
the qualifications or restrictions of those shares without any further vote or  
action by the stockholders. The rights of the holders of Common Stock will be   
subject to, and may be adversely affected by, the rights of the holders of any  
preferred stock that may be issued in the future. The issuance of preferred     
stock, while providing desirable flexibility in connection with possible        
acquisitions and other corporate actions, could have the effect of making it    
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. These provisions could limit the price that certain       
investors might be willing to pay in the future for shares of Common Stock.     
Furthermore, certain provisions of the Indenture and the Company's Amended and  
Restated Revolving Credit Facility (the "Revolving Credit Facility") provide for
the acceleration of the indebtedness evidenced thereby upon the occurrence of   
certain change in control events (as defined in such debt instruments), which   
provisions could also tend to prevent or discourage the acquisition of the      
Company by a third party. See "Description of Capital Stock" and "Description of
Certain Indebtedness."                                                          

HOLDING COMPANY STRUCTURE; RESTRICTIONS ON DIVIDENDS                            

    Twinlab conducts its business through its direct and indirect subsidiaries
and has no operations of its own. The principal assets of Twinlab are the       
capital stock of its direct and indirect subsidiaries, Twin, ARP and Changes    
International. Accordingly, Twinlab has no independent means of generating      
revenues. As a holding company, Twinlab's internal sources of funds to meet its 
cash needs, including payment of expenses, are dividends and other permitted    
payments from its direct and indirect subsidiaries. Financing arrangements under
which Twin is the borrower restrict the payment of dividends and the making of  
loans, advances or other distributions to Twinlab except in certain limited     
circumstances. See "Dividend Policy" and "Description of Certain Indebtedness." 

YEAR 2000                                                                       

The Company recognizes the importance of ensuring that neither its    
customers nor its business operations are disrupted as a result of Year 2000    
software failures. The Company is communicating with customers, suppliers,      
financial institutions and other vendors with which it does business to         
coordinate Year 2000 conversion efforts. At the present time, the Company       
believes that its systems are substantially Year 2000 compliant and does not    
expect Year 2000 issues to materially effect its products, services, competitive
position or financial performance. However, there can be no assurance that this 
will be the case. The ability of third parties with whom the Company transacts  
business to adequately address their Year 2000 issues is outside the Company's  
control. There can be no assurance that the failure of such third parties to    
adequately address their respective Year 2000 issues will not have a material   
adverse effect on the Company's business, financial condition, cash flows and   
results of operations.                                                          

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PRICE RANGE OF COMMON STOCK 

 The Company's Common Stock is quoted on the Nasdaq National Market. The
high and low sale prices for the Common Stock as reported by the Nasdaq National
Market for the periods since the Company's initial public offering in November  
1996 are summarized below.                                                      

                                                                [Download Table]

                                                               HIGH        LOW  
                                                              -------    -------
                                                                                
1996                                                                            
Fourth Quarter (from November 14, 1996).....................  $12.375    $11.375

1997                                                                            
First Quarter...............................................  $15.250    $12.000
Second Quarter..............................................   24.000     12.125
Third Quarter...............................................   24.750     19.000
Fourth Quarter..............................................   25.375     17.750

1998                                                                            
First Quarter...............................................  $41.625    $22.625
Second Quarter (through April 7, 1998)......................   40.750     36.750

   On April 7, 1998, the last reported sale price of the Common Stock on the
Nasdaq National Market was $37.0625. As of April 7, 1998, there were            
approximately 126 registered holders of record of the Common Stock.             

USE OF PROCEEDS 

  The net proceeds to the Company from the sale of the 4,000,000 shares of
Common Stock offered by the Company hereby are estimated to be approximately    
$139.4 million, after deducting the estimated underwriting discounts and        
commissions and offering expenses payable by the Company. The Company intends to
use $56.5 million of the net proceeds from the Offering to pay the purchase     
price of the Bronson Acquisition (including related fees and expenses). In      
addition, the Company intends to use approximately $40.1 million of the net     
proceeds from the Offering to redeem $35.0 million in outstanding principal     
amount of Notes at a redemption price equal to 109 1/2% of the principal amount 
thereof plus accrued and unpaid interest thereon to the date of redemption (the 
"Redemption"), and approximately $9.9 million to reduce outstanding borrowings  
under the Company's Revolving Credit Facility (including accrued and unpaid     
interest thereon). The remaining net proceeds from the Offering will be used for
working capital and other general corporate purposes. Borrowings under the      
Revolving Credit Facility were used for general corporate purposes, including   
the payment of the cash portion of the purchase price of Changes International. 
See "Prospectus Summary -- Business Strategy -- Supplement Internal Growth      
Through Strategic Acquisitions" and "-- Recent Trends and                       
Developments -- Bronson Acquisition." Pending the use of the net proceeds for   
such purposes, the Company will invest such proceeds in short-term,             
interest-bearing investments.                                                   

In the event the Bronson Acquisition is not consummated, the Company  
intends to use the resulting excess net proceeds from the Offering for working  
capital and other general corporate purposes, including to pursue acquisitions. 
See "Risk Factors -- Uncertainty Related to Acquisitions; Broad Discretion in   
Use of Proceeds."                                                               

     For information with respect to the Revolving Credit Facility and the Notes
(including applicable interest rates and the maturity dates thereof), see       
"Description of Certain Indebtedness."                                          

     The Company will not receive any proceeds from the sale of shares of Common
Stock offered by the Selling Stockholders.                                      

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DIVIDEND POLICY 

    The Company currently intends to retain earnings to finance its operations
and future growth and does not anticipate paying any cash dividends on its      
Common Stock in the foreseeable future. Twinlab conducts its business through   
its direct and indirect subsidiaries and has no operations of its own. The      
principal assets of Twinlab are the capital stock of its direct and indirect    
subsidiaries, Twin, ARP and Changes International. Accordingly, Twinlab has no  
independent means of generating revenues. As a holding company, Twinlab's       
internal sources of funds to meet its cash needs, including payment of expenses,
are dividends and other permitted payments from its direct and indirect         
subsidiaries. Financing arrangements under which Twin is the borrower restrict  
the payment of dividends and the making of loans, advances or other             
distributions to Twinlab, except in certain limited circumstances. See          
"Description of Certain Indebtedness." The payment of cash dividends in the     
future will depend upon, among other things, the Company's results of           
operations, financial condition, cash requirements and other factors deemed     
relevant by the Company's Board of Directors.                                   

CAPITALIZATION

    The following table sets forth the actual capitalization of the Company as
of December 31, 1997, and as adjusted to reflect the sale by the Company in the 
Offering of 4,000,000 shares of Common Stock at a price of $36.50 per share and 
the application by the Company of the estimated net proceeds therefrom          
(including the consummation of the Bronson Acquisition) as if they occurred on  
December 31, 1997. This table should be read in conjunction with "Management's  
Discussion and Analysis of Financial Condition and Results of Operations," and  
the Company's Consolidated Financial Statements and the notes thereto included  
elsewhere in this Prospectus.                                                   

                                                                [Download Table]

                                                             AS OF DECEMBER 31, 1997
                                                             -----------------------
                                                              ACTUAL     AS ADJUSTED
                                                             --------    -----------
                                                                 (IN THOUSANDS)     
                                                                                    
Cash and cash equivalents................................... $  4,029     $ 34,186  
                                                             ========     ========  
Long-term debt (including current portion)                                          
  Revolving Credit Facility................................. $ 13,750(a)  $     --  
  Notes.....................................................  100,000       65,000  
  Other debt................................................      330          330  
  Capital lease obligations.................................      158          158  
                                                             --------     --------  
  Total long-term debt......................................  114,238       65,488  
Total shareholders' equity..................................   30,344      166,762  
                                                             --------     --------  
Total capitalization........................................ $144,582     $232,250  
                                                             ========     ========  

---------------                                                                 
(a) The application of the net proceeds assumes the repayment of approximately  
   $13.9 million of outstanding borrowings under the Revolving Credit Facility
(including accrued and unpaid interest thereon), which borrowings are   
   expected to have been reduced through repayments to $9.9 million (including
accrued and unpaid interest thereon), prior to the consummation of the  
Offering.                                                               

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SELECTED HISTORICAL FINANCIAL DATA

     The selected historical financial data as of December 31, 1993, 1994, 1995,
1996 and 1997 and for each of the years then ended has been derived from the    
audited consolidated financial statements of the Company. The report of Deloitte
& Touche LLP, independent auditors, on the consolidated financial statements as 
of December 31, 1996 and 1997, and for each of the three years in the period    
ended December 31, 1997 is included elsewhere herein. The selected financial    
data below also presents pro forma financial data relating to (i) the Company's 
conversion of tax status from an "S" corporation to a "C" corporation as a      
result of the Transactions and (ii) the Transactions and the IPO. The selected  
historical financial data should be read in conjunction with, and is qualified  
in its entirety by, the Consolidated Financial Statements of the Company and the
notes thereto and the other financial information included elsewhere in this    
Prospectus.                                                                     

                                                        [Enlarge/Download Table]

                                                                     YEAR ENDED DECEMBER 31,                  
                                                       ----------------------------------------------------   
                                                        1993       1994       1995     1996(A)       1997     
                                                       -------   --------   --------   --------    --------   
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA AND RATIOS)     
                                                                                                              
OPERATING DATA:                                                                                               
  Net sales..........................................  $99,897   $117,342   $148,735   $170,075    $213,229   
  Gross profit.......................................   37,766     47,095     58,803     70,248      92,282   
  Operating expenses.................................   21,125     23,022     27,191     30,784      43,433   
  Income from operations.............................   16,641     24,073     31,612     39,464      48,849   
  Interest expense...................................      487        761        866     10,005      12,315   
  Nonrecurring and transaction expenses..............       --         --        656     15,700(b)       --   
  Net income.........................................  $16,676   $ 21,693   $ 30,224   $ 11,796(b) $ 22,671   
                                                       =======   ========   ========   ========    ========   
  Basic and diluted net income per share(c)..........  $  0.62   $   0.80   $   1.12   $   0.26(b) $   0.84(d)
                                                       =======   ========   ========   ========    ========   
  Diluted weighted average shares outstanding(e).....   27,000     27,000     27,000     27,000      27,078   
PRO FORMA RELATING TO CHANGE IN TAX STATUS:(F)                                                                
  Historical income before provision for income taxes                                                         
     and extraordinary item..........................  $16,906   $ 21,938   $ 30,464   $ 14,384               
  Pro forma provision for income taxes...............    6,644      9,087     12,060      5,466               
                                                       -------   --------   --------   --------               
  Pro forma income before extraordinary item.........   10,262     12,851     18,404      8,918               
  Extraordinary item.................................       --         --         --     (1,792)(g)           
                                                       -------   --------   --------   --------               
  Pro forma net income...............................  $10,262   $ 12,851   $ 18,404   $  7,126               
                                                       =======   ========   ========   ========               
  Basic and diluted income before extraordinary item                                                          
     per share(c)....................................       --         --   $   0.68   $   0.15          --   
                                                                            ========   ========               
  Basic and diluted net income per share(c)..........                       $   0.68   $   0.08               
                                                                            ========   ========               
PRO FORMA FOR THE TRANSACTIONS AND THE IPO:(H)                                                                
  Net income.........................................       --         --   $ 11,429   $ 16,729          --   
                                                                            ========   ========               
  Basic and diluted net income per share.............       --         --       0.42       0.62          --   
                                                                            ========   ========               
OTHER DATA:                                                                                                   
  Income from operations margin(i)...................     16.7%      20.5%      21.3%      23.2%       22.9%  
  Capital expenditures...............................  $ 4,904   $  1,786   $  2,641   $  2,252    $  3,842   

                                                        [Enlarge/Download Table]

                                                                       AS OF DECEMBER 31,                 
                                                      ----------------------------------------------------
                                                       1993       1994       1995     1996(A)       1997  
                                                      -------   --------   --------   --------    --------
                                                                         (IN THOUSANDS)                   
                                                                                                          
BALANCE SHEET DATA:                                                                                       
  Net working capital (excluding cash and cash                                                            
     equivalents, marketable securities and current                                                       
     debt)........................................... $25,437   $ 35,056   $ 39,405   $ 43,569    $ 57,474
  Property, plant and equipment, net.................  10,732     12,071     13,036     14,157      13,958
  Total assets.......................................  55,587     64,706     75,309    141,537     171,324
  Total debt (including current debt)................   8,039      9,288      8,792    120,654     114,238
  Shareholders' equity...............................  40,543     48,671     55,405      1,688      30,344

                                                   (footnotes on following page)
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(a) The Blechman Brothers, their parents, David and Jean Blechman, Stephen L.   
Welling, the President of the Nature's Herbs division of the Company    
 (collectively, the "Stockholders"), GEI and certain other parties entered
into a Stock Purchase and Sale Agreement, dated as of March 5, 1996, as 
amended (the "Acquisition Agreement"), pursuant to which, among other   
  things, on May 7, 1996 (i) GEI acquired 48% of the Common Stock of Twinlab
   for aggregate consideration of $4.8 million and shares of non-voting junior
redeemable preferred stock of Twinlab (the "Junior Preferred Stock") for
aggregate consideration of $37.0 million, (ii) certain other investors  
 acquired 7% of the Common Stock of Twinlab for aggregate consideration of
 $0.7 million and shares of nonvoting senior redeemable preferred stock of
Twinlab (the "Senior Preferred Stock," and, together with the Junior    
    Preferred Stock, the "Preferred Stock") for aggregate consideration of $30.0
million, (iii) the Senior Executive Officers exchanged certain of their 
    shares of common stock of Twin (formerly known as Natur-Pharma Inc.) for 45%
    of the outstanding shares of Common Stock of Twinlab valued at $4.5 million,
  (iv) Twinlab purchased all of the remaining shares of common stock of Twin
 from the Stockholders for cash, resulting in Twin becoming a wholly owned
 subsidiary of Twinlab. The total cash consideration that the Stockholders
    received was approximately $212.5 million, the majority of which was paid to
 David and Jean Blechman. The transactions described above are hereinafter
   referred to as the "Acquisition." Concurrently with the consummation of the
Acquisition, the Company entered into a credit facility (the "Original  
   Credit Facility") (which provided for a term loan facility in the amount of
$53.0 million and a revolving credit facility in the amount of $15.0    
million) and issued $100.0 million principal amount of 10 1/4% Senior   
    Subordinated Notes due 2006 (the "Note Offering"; and, collectively with the
  Acquisition and the Original Credit Facility, the "Transactions"). The net
    cash proceeds of the Note Offering were used, together with borrowings under
  the Original Credit Facility, the proceeds from the issuance of the Common
  Stock and Preferred Stock of Twinlab and available cash of the Company, to
  finance the Acquisition, to refinance approximately $7.0 million aggregate
principal amount of debt of the Company and to pay related fees and     
 expenses. The Company consummated an initial public offering of 8,500,000
    shares of Common Stock in November 1996 (the "IPO"). The net proceeds of the
  IPO of approximately $93.7 million, together with available cash resources
of the Company and approximately $20.0 million of borrowings under the  
Revolving Credit Facility, were used to repay all of the Company's      
 outstanding indebtedness under the Original Credit Facility and to redeem
all of the outstanding shares of Preferred Stock. See Note 1 to the     
   Consolidated Financial Statements of the Company included elsewhere in this
Prospectus.                                                             

(b) Reflects $15.3 million of nonrecurring non-competition agreement expense and
$0.4 million of Transaction expenses.                                   

(c) Basic and diluted income per share has been computed by dividing net income 
    (and pro forma income before extraordinary item and pro forma net income for
1995 and 1996), after reduction for Preferred Stock dividends, by the   
applicable weighted average shares outstanding.                         

(d) Supplemental basic and diluted net income per share for the year ended      
 December 31, 1997, after giving effect to the Redemption, would be $0.89.
Such calculation assumes the Redemption occurred on January 1, 1997 and 
  includes the assumed issuance of 1,093,750 shares of Common Stock required
to effect the Redemption and the elimination of interest expense and    
    amortization of deferred finance costs, net of tax, relating to the redeemed
Notes.                                                                  

(e) Diluted weighted average shares outstanding for 1993 through 1996 represents
   the number of equivalent shares outstanding after giving retroactive effect
to Twinlab's 18.5 for 1 stock split (effected in the form of a stock    
  dividend) and assumes that the 10,175,000 shares of Common Stock issued in
connection with the Acquisition and the 8,500,000 shares of Common Stock
  issued in connection with the Company's IPO were outstanding. See Notes to
  the Consolidated Financial Statements of the Company included elsewhere in
this Prospectus.                                                        

(f) Prior to May 1996, the Company consisted of "S" corporations and,           
   accordingly, federal and state taxes were generally paid at the shareholder
 level only. Upon consummation of the Transactions, the Company eliminated
  its "S" corporation status and, accordingly, became subject to federal and
state income taxes.                                                     

(g) Represents the write-off of previously deferred finance costs incurred in   
connection with the Original Credit Facility (the "Extraordinary Item").

(h) The unaudited pro forma results of operations assume the Transactions and   
 the subsequent IPO occurred on January 1, 1995, and exclude the effect of
    (i) the nonrecurring non-competition agreement expense, (ii) the Transaction
 expenses, (iii) the Extraordinary Item and (iv) the dividends paid on the
    Preferred Stock which was redeemed with a portion of the net proceeds of the
   IPO, and reflects the additional interest expense relating to the financing
    of the Acquisition and the change in tax status described in Note (f) above.
This data has been prepared for comparative purposes only and does not  
  purport to represent what the Company's actual results of operations would
 have been had the Transactions and the subsequent IPO in fact occurred on
January 1, 1995.                                                        

(i) Income from operations margin equals income from operations as a percentage 
of net sales.                                                           

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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

  The following discussion and analysis should be read in conjunction with
"Selected Historical Financial Data" and the audited Consolidated Financial     
Statements of the Company and the notes thereto included elsewhere in this      
Prospectus.                                                                     

RESULTS OF OPERATIONS                                                           

     The Company operates in one business segment, the manufacture and marketing
of brand name nutritional supplements. Within this segment, the Company operates
in three primary business areas: the TWINLAB division, the herbal products      
division, and the network marketing division. Products sold by the TWINLAB      
division include vitamins, minerals, amino acids, fish and marine oils, sports  
nutrition products and special formulas primarily under the TWINLAB brand name. 
The herbal products division includes a full line of herbal supplements and     
phytonutrients marketed by the Nature's Herbs division and a full line of herb  
teas marketed by the Alvita division. The Company's network marketing activities
are conducted through Changes International, which was acquired by the Company  
in November 1997. The Company's publishing activities are conducted through ARP.

The following table sets forth, for the periods indicated, certain    
historical income statement and other data for the Company and also sets forth  
certain of such data as a percentage of net sales.                              

                                                        [Enlarge/Download Table]

                                                      YEAR ENDED DECEMBER 31,                  
                                      -------------------------------------------------------- 
                                            1995                1996                1997       
                                      ----------------    ----------------    ---------------- 
                                                       (DOLLARS IN MILLIONS)                   
                                                                                               
TWINLAB Division..................... $132.2      88.8%   $150.4      88.4%   $174.9      82.0%
Herbal Supplements &                                                                           
  Phytonutrients.....................   19.8      13.3      23.1      13.6      41.1      19.3 
Herb Teas............................    5.8       3.9       8.1       4.8       8.4       3.9 
Network Marketing....................     NA        NA        NA        NA       7.0       3.3 
Publishing...........................    4.8       3.3       5.4       3.1       5.2       2.4 
                                      ------    ------    ------    ------    ------    ------ 
Gross Sales..........................  162.6     109.3     187.0     109.9     236.6     110.9 
Discounts & Allowances...............  (13.9)     (9.3)    (16.9)     (9.9)    (23.4)    (10.9)
                                      ------    ------    ------    ------    ------    ------ 
Net Sales............................  148.7     100.0     170.1     100.0     213.2     100.0 
Gross Profit.........................   58.8      39.5      70.2      41.3      92.3      43.3 
Operating Expenses...................   27.2      18.3      30.8      18.1      43.4      20.4 
Income From Operations...............   31.6      21.3      39.5      23.2      48.8      22.9 

FISCAL 1997 COMPARED TO FISCAL 1996                                             

   Net Sales.  Net sales for fiscal 1997 were $213.2 million, an increase of
$43.1 million, or 25.4%, as compared to net sales of $170.1 million for fiscal  
1996. The 25.4% increase was attributable to increased sales in each of the     
Company's product categories other than publishing, partially offset by an      
increase in sales discounts and allowances which was primarily due to the       
Company's increased sales volume. Changes International contributed gross sales 
of $7.0 million after its acquisition in November 1997. Gross sales of TWINLAB  
products contributed $174.9 million, an increase of $24.5 million or 16.3% as   
compared to $150.4 million for fiscal 1996. This increase was primarily due to  
the expansion of established accounts, increased sales of existing products, new
product introductions and product specific advertising. Herbal supplements and  
phytonutrients contributed $41.1 million, an increase of $18.0 million, or      
78.2%, as compared to $23.1 million for fiscal 1996 and herb teas contributed   
$8.4 million as compared to $8.1 million for fiscal 1996. The gross sales       
increase in herbal supplements and phytonutrients was primarily due to the      
expansion of established accounts in domestic health food stores, improved      
business development in the mass market channel of distribution, increased sales
of existing products and new product introductions.                             

Gross Profit.  Gross profit for fiscal 1997 was $92.3 million, which  
represented an increase of $22.1 million or 31.4%, as compared to $70.2 million 
for fiscal 1996. Gross profit margin was 43.3% for 1997, as                     

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compared to 41.3% for fiscal 1996. The overall increase in gross profit was     
primarily attributable to the Company's higher sales volume for fiscal 1997 as  
compared to fiscal 1996. The increase in gross profit margin for fiscal 1997 as 
compared to fiscal 1996 was due primarily to a more favorable product mix to    
higher margin sports nutrition and special formula products, to higher gross    
profit margins on recently introduced new product formulations and product line 
extensions, to lower unit manufacturing overhead as a result of overhead costs  
increasing at a rate lower than sales and to higher gross margins on sales      
through the network marketing business, partially offset by an increase in sales
discounts and allowances.                                                       

     Operating Expenses.  Operating expenses were $43.4 million for fiscal 1997,
representing an increase of $12.6 million, or 41.1%, as compared to $30.8       
million for fiscal 1996. As a percent of net sales, operating expenses increased
from 18.1% for fiscal 1996 to 20.4% for fiscal 1997. The increase in operating  
expenses and operating expenses as a percent of net sales was primarily         
attributable to increased selling and marketing expenses and higher general and 
administrative expenses due to increased levels of promotional and sales        
activities, including commission expense relating to Changes International, and 
the hiring of additional administrative staff.                                  

Income from Operations.  Income from operations was $48.8 million for 
fiscal 1997, representing an increase of $9.3 million or 23.8% as compared to   
$39.5 million for fiscal 1996. Income from operations margin decreased to 22.9% 
of net sales for fiscal 1997, as compared to 23.2% of net sales for fiscal 1996.
The increase in income from operations for 1997 was primarily due to the        
Company's higher sales volume together with higher gross margins, offset in part
by higher operating expenses. The decrease in operating margin as a percent of  
net sales in 1997 was due to higher operating expenses as a percent of net      
sales, partially offset by increased sales volumes together with higher gross   
margins.                                                                        

Other Expense.  Other expense was $12.1 million for fiscal 1997, as   
compared to $25.1 million for fiscal 1996. The net decrease of $13.0 million is 
primarily attributable to $15.7 million of nonrecurring non-competition         
agreement expense and transaction expenses which were incurred in 1996 in       
connection with the Transactions offset by an increase in net interest expense  
of $2.7 million resulting from increased borrowings during 1997.                

FISCAL 1996 COMPARED TO FISCAL 1995                                             

   Net Sales.  Net sales for fiscal 1996 were $170.1 million, an increase of
$21.4 million, or 14.3%, as compared to net sales of $148.7 million for fiscal  
1995. The 14.3% increase was attributable to increased sales in each of the     
Company's product categories, partially offset by an increase in sales discounts
and allowances which was primarily due to the Company's increased sales volume. 
Gross sales of TWINLAB products contributed $150.4 million, an increase of $18.2
million, or 13.7%, as compared to $132.2 million for fiscal 1995. This increase 
was primarily due to increased demand for products sold under the TWINLAB brand 
name, which increase was due in substantial part to the successful introduction 
of a number of new special formula and sports nutrition products. Herbal        
supplements and phytonutrients contributed $23.1 million, an increase of $3.3   
million, or 16.4%, as compared to $19.8 million for fiscal 1995 and herb teas   
contributed $8.1 million, an increase of $2.3 million, or 41.5%, as compared to 
$5.8 million for fiscal 1995. The gross sales increase in both herbal           
supplements and phytonutrients and herb teas was primarily due to increased     
demand for both Nature's Herbs and Alvita products, which increase was due in   
part to the successful introduction of new products, continued strong consumer  
interest in existing products and increased penetration of both Nature's Herbs  
and Alvita products into domestic health food stores. Publishing contributed    
gross sales of $5.4 million for fiscal 1996, as compared to $4.8 million for    
fiscal 1995.                                                                    

Gross Profit.  Gross profit for fiscal 1996 was $70.2 million, which  
represented an increase of $11.4 million, or 19.5%, as compared to $58.8 million
for fiscal 1995. Gross profit margin was 41.3% for fiscal 1996 as compared to   
39.5% for fiscal 1995. The overall increase in gross profit was primarily       
attributable to the Company's higher sales volume for fiscal 1996 as compared to
fiscal 1995. The increase in gross profit margin for fiscal 1996 as compared to 
fiscal 1995 was due primarily to higher gross profit margins on recently        
introduced new product formulations and lower unit manufacturing overhead as a  
result of overhead costs                                                        

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increasing at a rate lower than sales due to manufacturing efficiencies,        
partially offset by an increase in sales discounts and allowances.              

     Operating Expenses.  Operating expenses were $30.8 million for fiscal 1996,
representing an increase of $3.6 million, or 13.2%, as compared to $27.2 million
for fiscal 1995. As a percent of net sales, operating expenses declined from    
18.3% for fiscal 1995 to 18.1% for fiscal 1996. The increase in operating       
expenses was primarily attributable to increased selling and advertising        
expenses and higher operating expenses resulting from the Company's increased   
sales for fiscal 1996. The decline in operating expenses as a percent of net    
sales was due to the Company's ability to maintain its research and development 
expenditures and a substantial portion of its general and administrative costs  
at approximately the same level as in fiscal 1995, while substantially          
increasing the Company's sales volume.                                          

Income from Operations.  Income from operations was $39.5 million for 
fiscal 1996, representing an increase of $7.9 million, or 24.8%, as compared to 
$31.6 million for fiscal 1995. Income from operations margin increased to 23.2% 
of net sales for fiscal 1996, as compared to 21.3% of net sales for fiscal 1995.
The increase in income from operations and income from operations margin was    
primarily due to the Company's higher sales volume, higher gross margins and    
lower operating expenses as a percent of net sales for fiscal 1996.             

   Other Income (Expense).  Other expense was $25.1 million for fiscal 1996,
as compared to $1.1 million for fiscal 1995. The net increase is primarily      
attributable to a nonrecurring $15.3 million charge relating to the write-off of
certain non-competition agreements and a $9.1 million increase in interest      
expense which resulted from increased borrowings.                               

     Income taxes.  The Company consisted of "S" corporations for the year ended
December 31, 1995, and through the consummation of the Acquisition on May 7,    
1996. Accordingly, federal and state taxes were generally paid at the           
shareholder level only. The provision for income taxes through May 7, 1996 and  
for the year ended December 31, 1995, represented state taxes for New York,     
which imposes a corporate tax for all income in excess of $0.2 million. Upon    
consummation of the Transactions, the Company eliminated its "S" corporation    
status and, accordingly, became subject to federal and state income taxes.      

LIQUIDITY AND CAPITAL RESOURCES                                                 

   For fiscal 1997, cash provided by operating activities was $11.4 million,
as compared to $25.5 million for fiscal 1996 and $26.8 million for fiscal 1995. 
The decrease in fiscal 1997 compared to fiscal 1996 was primarily due to higher 
accounts receivable and inventory balances due to higher levels of sales volume 
as well as the timing of payments of accrued expenses and other current         
liabilities. The decrease in fiscal 1996 compared to fiscal 1995 was primarily  
due to higher interest expense, substantially offset by higher income from      
operations. Cash used in financing activities was $6.3 million for fiscal 1997, 
and represented repayment of certain outstanding indebtedness. Cash used in     
financing activities for fiscal 1996 was $28.0 million, reflecting the net cash 
effect of the Transactions (including the payments to the Stockholders made     
pursuant to the Acquisition) and the IPO, and the application of the proceeds   
therefrom, the repayment of $6.0 million of outstanding indebtedness and        
distributions of $8.9 million to the Stockholders prior to the consummation of  
the Acquisition. Cash used in financing activities for fiscal 1995 was $24.0    
million and primarily consisted of distributions to the Stockholders of $23.5   
million.                                                                        

   Capital expenditures in 1997 were $3.8 million ($3.1 million of which was
for equipment that was subsequently sold and leased back) and $2.3 million and  
$2.6 million for fiscal 1996 and 1995, respectively. Historical capital         
expenditures were primarily used to purchase production equipment, expand       
capacity and improve manufacturing efficiency. Capital expenditures are expected
to be approximately $17.0 million during fiscal 1998, of which approximately    
$13.0 million will be used to expand the Company's Utah Facility (approximately 
$8.0 million of which will be financed by a nine-month construction loan that   
will be converted to a fifteen-year mortgage) and the remainder of which will be
used primarily to purchase manufacturing equipment and computer hardware and    
software. The Company estimates that its historical level of maintenance capital
expenditures has been approximately $0.5 million per fiscal year.               

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On November 12, 1997, the Company acquired Changes International for a
purchase price (including fees and expenses) of approximately $13.7 million,    
consisting of $7.9 million in cash and 312,500 shares of Twinlab Common Stock.  
The cash portion of the purchase price was financed through borrowings under the
Company's Revolving Credit Facility. Changes International operates as a network
marketer of nutritional supplements through independent distributors located    
primarily throughout the United States and Canada. The acquisition was recorded 
using the purchase method of accounting.                                        

 Twinlab has no operations of its own and accordingly has no independent
means of generating revenue. As a holding company, Twinlab's internal sources of
funds to meet its cash needs, including payment of expenses, are dividends and  
other permitted payments from its direct and indirect subsidiaries. The         
Indenture relating to the Notes and the Revolving Credit Facility impose upon   
the Company certain financial and operating covenants, including, among others, 
requirements that the Company maintain certain financial ratios and satisfy     
certain financial tests, limitations on capital expenditures and restrictions on
the ability of the Company to incur debt, pay dividends or take certain other   
corporate actions. The Company was in compliance with all such covenants as of  
December 31, 1997.                                                              

 Management believes that the Company has adequate capital resources and
liquidity to meet its borrowing obligations, fund all required capital          
expenditures and pursue its business strategy for at least the next 18 to 24    
months. The Company's capital resources and liquidity are expected to be        
provided by the Company's cash flow from operations, borrowings under the       
Revolving Credit Facility and the proceeds from the Offering. As of December 31,
1997, approximately $36.3 million of borrowings were available under the        
Revolving Credit Facility for working capital requirements and general corporate
purposes.                                                                       

    One of the Company's business strategies is to actively pursue acquisition
opportunities that complement or extend its existing products, expand its       
distribution channels or are compatible with its business philosophy and        
strategic goals. Future acquisitions could be financed by internally generated  
funds, bank borrowings, public offerings or private placements of equity or debt
securities, or a combination of the foregoing. Up to $35.0 million of borrowings
under the Revolving Credit Facility is available to fund acquisitions subject to
certain conditions and reductions (approximately $21.3 million of which was     
available as of December 31, 1997). There can be no assurance that the Company  
will be able to make acquisitions on terms favorable to the Company and that    
funds to finance an acquisition will be available or permitted under the        
Company's financing instruments.                                                

On March 17, 1998, the Company entered into a definitive agreement to 
acquire substantially all of the assets and assume certain liabilities of       
Bronson. The Company expects that the closing of the Bronson Acquisition will   
occur during the second quarter of fiscal 1998. Bronson's net sales and         
operating income for the fiscal year ended December 31, 1997, were approximately
$32.1 million, and $9.5 million, respectively. The purchase price is $55.0      
million in cash, subject to certain adjustments, which the Company intends to   
finance with a portion of the net proceeds of the Offering. See "Prospectus     
Summary -- Recent Trends and Developments -- Bronson Acquisition" and "Risk     
Factors -- Uncertainty Related to Acquisitions; Broad Discretion in Use of      
Proceeds."                                                                      

    In addition, the Company intends to use approximately $40.1 million of the
net proceeds from the Offering to pay for the Redemption and approximately $9.9 
million to reduce outstanding borrowings under the Company's Revolving Credit   
Facility (including accrued and unpaid interest thereon). In connection with the
Redemption, the Company will record an extraordinary charge of approximately    
$2.9 million (net of tax benefit of approximately $1.8 million) relating to the 
payment of premiums on the Notes and the write-off of a pro rata portion of     
deferred finance costs.                                                         

 The Company is currently considering the possibility of making an offer
(the "Offer") to purchase for cash all Notes not otherwise purchased in the     
Redemption. The Company would finance any such Offer with borrowings under a new
bank credit facility, any remaining excess proceeds of the Offering, available  
cash, or any combination of the foregoing. There can be no assurance that the   
Company will be in a position to enter into a new bank credit facility for the  
purposes of making an Offer or that other financing will be available. Moreover,
the Company's determination to make an Offer would be subject to financial,     
market and other conditions and there can be no assurance that the Company will 
make an Offer. Accordingly, the possibility                                     
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that an Offer may be made or consummated should not be considered by prospective
purchasers of the Common Stock.                                                 

RECENT TRENDS                                                                   

   In the first quarter of 1998, the Company received a substantial increase
in orders for its herbal supplement products, including a significant increase  
in orders from Wal-Mart for herbal products which are being sold under          
Wal-Mart's proprietary Spring Valley brand name. This increase is due to        
increased demand at the retail level and to the fact that the number of SKU's   
sold under this brand name at Wal-Mart more than doubled during the first       
quarter of 1998. The Company has made several adjustments to its operations to  
accommodate this increased demand for its herbal products, including the use of 
production capacity at the New York Facility to produce herbal supplement       
products and the installation of additional manufacturing equipment at both the 
New York and Utah Facilities. As a result of these operational adjustments and  
the Company's decision to reduce promotions offered to distributors during the  
first quarter of 1998, the Company's mix of product sales during the first      
quarter of 1998 will differ substantially from the product mix in the comparable
period in 1997. For the first quarter of 1998, herbal supplements will represent
a substantially greater portion of the Company's total net sales, and sales of  
vitamins, minerals and nutritional supplements products will represent a smaller
percentage of total net sales and decline significantly from the comparable     
period in 1997. Nevertheless, the Company anticipates that its overall growth   
rate in net sales in the first quarter of 1998 will be comparable to that       
achieved in the first quarter of 1997, as the increased sales of herbal products
will more than offset the decreased sales of vitamins, minerals and nutritional 
supplements (all of the foregoing first quarter comparisons exclude the impact  
of Changes International). The Company believes that there has been no material 
decline in retail sales of its vitamin, mineral and nutritional supplement      
products during the first quarter of 1998, as there has been adequate inventory 
of its products in the distribution channel. The Company plans to adjust its    
production mix during the second quarter of 1998 to increase the production of  
vitamins, minerals and nutritional supplements compared to the first quarter of 
1998, as additional capacity comes on line and production schedules are         
adjusted, and expects to realize increased sales of these products during the   
second quarter of 1998 as compared to the first quarter of 1998.                

IMPACT OF INFLATION                                                             

Generally, the Company has been able to pass on inflation-related cost
increases; consequently, inflation has not had a material impact on the         
Company's historical operations or profitability.                               

RECENT FINANCIAL ACCOUNTING STANDARDS BOARD STATEMENTS                          

  Recent pronouncements of the Financial Accounting Standards Board, which
are not required to be adopted at this date, include Statement of Financial     
Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income", SFAS   
No. 131, "Disclosures about Segments of an Enterprise and Related Information"  
and SFAS No. 132, "Employers' Disclosures about Pensions and Other              
Postretirement Benefits." These pronouncements are not expected to have material
impact on the Company's financial statements.                                   

YEAR 2000                                                                       

The Company recognizes the importance of ensuring that neither its    
customers nor its business operations are disrupted as a result of Year 2000    
software failures. The Company is communicating with customers, suppliers,      
financial institutions and other vendors with which it does business to         
coordinate Year 2000 conversion efforts. At the present time, the Company       
believes that its systems are substantially Year 2000 compliant and does not    
expect Year 2000 issues to materially affect its products, services, competitive
position or financial performance. However, there can be no assurance that this 
will be the case. The ability of third parties with whom the Company transacts  
business to adequately address their Year 2000 issues is outside the Company's  
control. There can be no assurance that the failure of such third parties to    
adequately address their respective Year 2000 issues will not have a material   
adverse effect on the Company's business, financial condition, cash flows and   
results of operations.                                                          
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BUSINESS

GENERAL                                                                         

     The Company is one of the leading manufacturers and marketers of brand name
nutritional supplements sold through domestic health food stores and is also    
engaged in the sale of its products through national and regional drug store    
chains, supermarkets, mass market retailers and Changes International, its      
recently acquired network marketing company. The Company produces a full line of
nutritional supplements and offers the broadest product line in the industry    
with more than 940 products and 1,700 stockkeeping units (SKU's). The Company's 
product line includes vitamins, minerals, amino acids, fish and marine oils,    
sports nutrition products and special formulas marketed under the TWINLAB       
trademark, a full line of herbal supplements and phytonutrients marketed under  
the Nature's Herbs and HealthCare Naturals trademarks and herb teas marketed    
under the Alvita trademark. In addition, the Company markets a line of          
nutritional supplements exclusively through Changes International. The Company  
emphasizes the development and introduction of high-quality, unique             
nutraceuticals and other products in response to emerging trends in the         
nutritional supplement industry. The Company's broad product line, strong       
history of new product introductions and innovations, superior marketing and    
advertising programs and premium product quality have established TWINLAB,      
Nature's Herbs and Alvita as leading and widely-recognized brands in the        
nutritional supplement industry.                                                

     Under the leadership of the Blechman family, Twinlab has achieved increased
net sales and income from operations every year since 1990. Since 1993, the     
Company's net sales and income from operations have grown at compound annual    
growth rates of 20.9% and 30.9%, respectively. For the year ended December 31,  
1997, the Company generated net sales, net income and net income per share of   
$213.2 million, $22.7 million and $0.84, respectively.                          

     The Company's products target consumers who utilize nutritional supplements
in their daily diet and who demand premium quality ingredients in a broad       
variety of dosages and delivery methods. To reach the broadest possible consumer
market, the Company has developed a multi-branded and multi-channel distribution
strategy, consisting of the following categories:                               

  - Health Food Stores -- The Company's TWINLAB, Nature's Herbs and Alvita
brand products are sold through a network of approximately 60     
 distributors to nearly 11,000 health food stores and other selected
retail outlets. The health food store channel of distribution has 
    continued to experience significant growth in recent years as national
     chains, including those which sell the Company's products, such as GNC,
      WFM, Wild Oats and other industry participants continue to add stores in
      new and existing markets. The Company believes that it has a competitive
       advantage in the health food store channel due to the high quality of its
      products which is a direct result of its use of premium ingredients, its
   modern manufacturing facilities and its comprehensive quality control
   procedures. Sales to the health food store channel, primarily through
       distributors, continue to represent the Company's largest market totaling
    approximately $171.6 million, or approximately 80.5%, of the Company's
       net sales in 1997. The Company believes that its products have a presence
       in over 90% of the health food stores in the United States, but that only
approximately 12% of such stores carry a comprehensive line of the
     Company's products. Management believes that the continued expansion of
       health food store retail outlets and the strong growth characteristics of
       the nutritional supplement industry, combined with health food retailers'
success with the Company's product lines, provide Twinlab with    
  significant opportunities to increase sales in the health food store
channel.                                                          

- Mass Market Retailers -- The Company continues to increase its      
penetration of the fast growing mass market retail channel, which 
       consists of drug store chains, supermarkets and other mass merchandisers.
     The Company is currently a provider of private label herbal products to
       Wal-Mart, which are being sold under Wal-Mart's proprietary Spring Valley
  brand name. The Company also sells its products through national and
       regional drug store and supermarket chains, such as Rite Aid Corporation,
      Duane Reade Inc., American Stores, Inc. and Albertson's, Inc., under its
  established TWINLAB, HealthCare Naturals and Alvita brand names. The
Company believes that the mass market distribution channel        

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 affords significant growth opportunities and intends to continue to
       introduce new products and new brands designed specifically for customers
    in this channel. During 1998, the Company plans to introduce a line of
     sports nutrition products under a new proprietary brand name which will
 be sold exclusively in the mass market channel. Approximately $14.0
       million or 6.6% of the Company's 1997 net sales were attributable to mass
 market retailers compared to $3.4 million or 2.0% in 1996. Due to a
     variety of recent programs initiated by the Company, Twinlab expects to
    experience significant growth in this category during fiscal 1998. See
    "Prospectus Summary -- Recent Trends and Developments -- First Quarter
Trends."                                                          

   - Network Marketing -- Through Changes International, a network marketing
    company which the Company acquired in November 1997, Twinlab develops,
       markets and sells vitamins, herbs and nutritional supplements exclusively
    under the Changes brand name. Changes International operates through a
  large sales force of independent distributors located throughout the
United States and Canada who sell directly to consumers. Changes  
     International's products include Changes Relief, an advanced supplement
that nutritionally supports healthy bone and joint functions, and 
   Perfor-Max, an antioxidant formula containing grapeseed extract, pine
   bark extract and tumeric. All of Changes International's products are
     specially formulated and packaged exclusively for the network marketing
     channel and are not intended for sale to retail outlets. The Company is
making a significant investment to enhance Changes International's
      management team, infrastructure and management information systems in an
      effort to expand its distributor and customer base and to increase sales
    in this distribution channel. During 1998, the Company intends to more
    than double the size of Changes International's nutritional supplement
    line, beginning with the introduction of eight new products during the
first half of 1998. Changes International was founded in 1994 and 
    generated gross sales of $41.5 million in 1997 ($7.0 million in fiscal
1997 after its acquisition by the Company).                       

BUSINESS STRATEGY                                                               

The Company's strategy is to continue to increase sales and profits by
furthering its leadership position in the sale of vitamins, herbs and           
nutritional supplements to the health food store channel while continuing to    
increase sales and market share in the mass market and network marketing        
channels. The Company also intends to seek opportunities to enter other channels
of distribution, including catalog distribution. Twinlab plans to implement this
strategy both by capitalizing on the strength of its established brands as well 
as through the development and introduction of new brands. In addition, the     
Company expects to continue to develop and introduce new products and product   
innovations for each of its distribution channels, to increase its penetration  
of foreign markets and to provide the advertising, marketing, operational and   
personnel support necessary to grow its businesses. Twinlab intends to achieve  
these goals while continuing its past emphasis on its financial performance and 
the overall efficiency of its operations. Specifically, the Company seeks to:   

     Further Develop Portfolio of Brands -- Twinlab has developed a portfolio of
core brands which are among the most recognized in the vitamin and nutritional  
supplement industry. The Company intends to continue to nurture and extend the  
reach of its TWINLAB, Nature's Herbs and Alvita brands in the health food       
distribution channel while furthering the development of its portfolio of       
private label and proprietary brands, including the HealthCare Naturals and     
Changes brands, targeted to the mass market retail and network marketing        
channels. During 1998, the Company plans to introduce a line of sports nutrition
products under a new proprietary brand name which will be sold exclusively in   
the mass market channel. As in the past, the Company will continue to promote   
its brands through strong marketing and advertising programs. Management        
believes that Twinlab has one of the largest marketing and advertising budgets  
as a percentage of sales in the nutraceutical industry and that the strong brand
name recognition of its products is, in part, a direct result of this support.  
In fiscal 1997, the Company spent $15.9 million, an increase of 25.1% over      
fiscal 1996, on marketing and advertising to promote its products. The Company  
has budgeted $20.5 million for marketing and advertising expenses in fiscal     
1998, a 29.2% increase over fiscal 1997.                                        

     Further Develop Multiple Channels of Distribution -- The Company intends to
continue to increase its penetration of the health food store channel, expand   
its mass market retail and network marketing businesses, and enter additional   
distribution channels, such as catalog distribution, through internal growth and
selective                                                                       
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acquisitions. See "Recent Trends and Developments -- Bronson Acquisition." By   
utilizing a multiple distribution channel approach, the Company believes it will
be well positioned to also reach customers who historically have not shopped in 
health food stores.                                                             

     Continue to Introduce New Products and Product Innovations -- A cornerstone
of the Company's success has been its ability to rapidly utilize recent         
scientific and medical findings in its new product development efforts. The     
Company has consistently been among the first in its industry to introduce new  
products and product innovations which anticipate and meet customer demands for 
newly identified nutritional supplement benefits. As part of its ongoing        
research and development effort, the Company maintains an extensive database and
actively researches and monitors a wide variety of publications containing      
scientific and medical research. The Company's geographically diverse network of
distributors allows Twinlab to achieve immediate and broad distribution for new 
product launches. From 1991 through 1997, the Company introduced over 560       
products, with over 100 new products introduced in 1997 alone. Net sales during 
1997 from new products introduced in 1997 were approximately $17.7 million, or  
approximately 8.3% of net sales. In 1998, the Company expects to introduce over 
100 new products in the health food store and mass market retail channels, 18 of
which have already been introduced, and plans to more than double the number of 
products offered by Changes International.                                      

   Increase Penetration of Foreign Markets -- Management believes that there
are substantial opportunities for the Company to expand its presence in foreign 
markets. As part of its continuing efforts to increase international sales, the 
Company recently hired a Director of International Sales. The Company's         
international sales force is supported by a network of 37 overseas distributor  
organizations, serving 56 foreign countries. Approximately 5.1%, or $10.9       
million, of the Company's net sales in 1997 were derived from international     
sales originating from overseas distributor organizations. The Company presently
has distribution agreements covering fourteen western European countries,       
including Great Britain, France, Belgium, the Netherlands and the Scandinavian  
countries; six eastern European countries, including Russia; nine Latin American
countries, including Mexico, Brazil and Argentina; eight Middle Eastern         
countries, including Israel and Saudi Arabia; and several other countries in the
Far East and the Caribbean. The Company has also initiated new programs to      
qualify distributors in Italy and China.                                        

  Supplement Internal Growth Through Strategic Acquisitions -- The Company
actively pursues acquisition opportunities that will complement or extend its   
existing product line, expand its distribution channels or would be compatible  
with its business philosophy and strategic goals. The Company believes that its 
leading and widely recognized brand names, broad distribution capabilities and  
proven ability to generate sales of its products through successful marketing   
programs provide it with a strategic advantage in identifying potential         
acquisition candidates. In addition, the Company's success with past            
acquisitions provides it with the knowledge to successfully integrate future    
acquisitions into its operations. See "Prospectus Summary -- Recent Trends and  
Developments -- Bronson Acquisition."                                           

     Ongoing Investment in Personnel and Infrastructure -- The Company continues
to make significant investments in developing its management team and building  
its infrastructure to support the growth of its businesses. The Company recently
hired several key individuals, including a new Chief Financial Officer, a       
President of Mass Market Sales and a Director of International Sales, to enhance
its senior management team. As part of its ongoing efforts to maintain its      
reputation for providing the highest quality products and services to its       
customers, the Company continues to invest in its manufacturing and distribution
facilities and management information systems. The Company recently broke ground
on an approximately $13.0 million expansion of its state-of-the-art Utah        
Facility. The total size of the Utah Facility will increase from 57,000 square  
feet to approximately 143,000 square feet and will substantially increase the   
Company's production capacity.                                                  

INDUSTRY                                                                        

    Based on estimates in the Packaged Facts Report, the retail market for VMS
Products has grown at a compound annual rate of 15% from $3.7 billion in 1992 to
$6.5 billion in 1996. A large portion of this growth is attributable to an      
increase in sales of supplements (primarily herbal products), which grew from   
$570 million in 1992 to $2.3 billion in 1996. Growth in this category has been  
fueled by the popularity of such herbs as                                       

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echinacea, garlic, ginseng, gingko and, more recently, saw palmetto and St.     
John's wort. Packaged Facts forecasts 13.6% compound annual growth in the market
for VMS Products, including 25% compound annual growth in the market for        
supplements, through the year 2001. In addition, according to Packaged Facts,   
the retail market for sports nutrition products has grown at a compound annual  
rate of 10.7% from approximately $585 million in 1992 to $880 million in 1996.  

US RETAIL SALES OF VMS PRODUCTS AND SPORTS NUTRITION PRODUCTS 1992-1996 
(IN MILLIONS OF DOLLARS)

                                                                [Download Table]

          CATEGORY                   1992          1996         CAGR  
          --------                  ------        ------        ----- 
                                                                      
Vitamins....................        $2,570        $3,500          8.0%
Supplements.................           570         2,300         41.7 
Minerals....................           590           725          5.3 
                                    ------        ------        ----- 
     Total VMS Products.....         3,730         6,525         15.0 
                                    ------        ------        ----- 
Sports Nutrition............           585           880         10.7 
                                    ------        ------        ----- 
          Total.............        $4,315        $7,405         14.5%
                                    ======        ======        ===== 

Source: Packaged Facts                                                          

   Management believes this continued growth will be fueled by (i) favorable
demographic trends towards older Americans, who are more likely to consume      
nutritional supplements; (ii) product introductions in response to new          
scientific research findings supporting the positive health effects of certain  
nutrients; (iii) the nationwide trend toward preventive medicine in response to 
rising health care costs; (iv) increased consumer interest in herbs and         
herb-related supplements; and (v) the heightened understanding and awareness of 
healthier lifestyles and the connection between diet and health. Moreover,      
although the industry has grown dramatically in recent years, there is still a  
large untapped domestic market as only an estimated 50% of Americans currently  
consume vitamins, herbs and nutritional supplements on a regular basis.         

  Vitamin and nutritional supplements are sold through several channels of
distribution: health food stores, mass market retailers (drug store chains,     
supermarkets and other mass merchandisers), and direct sales channels (including
network marketing and catalog distribution). In 1996, according to Packaged     
Facts, the mass market channel accounted for approximately 45.8% of sales of VMS
Products, health food stores accounted for 38.2% of sales and the remaining     
16.0% of sales were generated through direct selling, mail order and the        
internet.                                                                       

  The United States health food store market is comprised of approximately
11,000 stores, which are generally either independently owned or associated with
one of several regional or national chains, including GNC and WFM. According to 
the Packaged Facts Report, nutritional supplements account for over 38% of a    
typical health food store's sales. The health food store channel of distribution
has continued to experience growth in recent years as national chains, including
those which sell the Company's products, such as GNC, WFM and other industry    
participants continue to add stores in new and existing markets. The growth in  
the health food channel of distribution is partially attributable to the general
growth in natural product sales. Natural products are defined as products that  
are minimally processed, environmentally friendly, largely or wholly free from  
artificial chemicals and, in general, as close to their natural states as       
possible.                                                                       

In the mass market channel, sales of vitamins, herbs and nutritional  
supplements have generally grown in line with the growth in all channels due to 
the proliferation of retail outlets and the expansion of SKU's offered by these 
stores. However, within the mass market channel, mass merchandisers have        
captured increasing market share from traditional drug store chains and         
supermarkets. According to Packaged Facts, these mass merchandisers accounted   
for 14.8% of total retail sales of VMS Products in 1996 compared to 11.5% in    
1994. This compares to traditional drug store chains and supermarkets which     
accounted for 31.0% and 34.6% of total retail sales of VMS Products in 1996 and 
1994, respectively.                                                             

  Although growing, sales generated via direct selling, mail order and the
internet have not grown as quickly as sales in other channels of distribution.  
According to Packaged Facts, sales via direct selling as a                      

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percentage of total retail sales of VMS Products were 12.6% in 1996 compared to 
13.1% in 1994. Sales via mail order and the internet were 3.4% and 4.2% of total
retail sales of VMS Products in 1996 and 1994, respectively. It is expected that
the market for internet sales will increase in the future as consumers become   
more accustomed to ordering products online.                                    

SHARE OF VMS PRODUCTS MARKET -- SALES BY RETAIL OUTLETS, 1994-1996

                                                                [Download Table]

OUTLET                                1994         1995         1996  
------                                -----        -----        ----- 
                                                                      
Health and Natural Food                                               
  Stores......................         36.6%        38.6%        38.2%
Mass Market                                                           
  Drug Store Chains...........         23.1         21.2         20.2 
  Mass Merchandisers..........         11.5         13.5         14.8 
  Supermarkets................         11.5         10.4         10.8 
                                      -----        -----        ----- 
     Total Mass Market........         46.1         45.1         45.8 
                                      -----        -----        ----- 
Direct Selling................         13.1         12.6         12.6 
Mail Order and Internet.......          4.2          3.7          3.4 
                                      -----        -----        ----- 
          Total...............        100.0%       100.0%       100.0%
                                      =====        =====        ===== 

---------------                                                                 
Source: Packaged Facts                                                          

PRODUCTS                                                                        

The Company has a highly diversified array of products and product    
categories, each of which achieves strong gross margins. The Company            
manufactures and markets over 940 products and over 1,700 SKU's in five product 
categories. The Company's product line includes vitamins, minerals, amino acids,
fish and marine oils, sports nutrition products and special formulas marketed   
under the TWINLAB(R) trademark, a full line of herbal supplements and           
phytonutrients and herb teas marketed under the Nature's Herbs(R), HealthCare   
Naturals(R) and Alvita(R) trademarks, respectively, and a line of nutritional   
supplements marketed through Changes International. The Company also sells its  
products under Wal-Mart's proprietary Spring Valley label and plans to introduce
a line of sports nutrition products under a new proprietary brand name which    
will be sold exclusively in the mass market channel in 1998. The Company also   
publishes health, fitness and nutrition-related publications.                   

   The following table sets forth certain information concerning each of the
Company's product categories:                                                   

                                                        [Enlarge/Download Table]

                                                                                   FOUR-YEAR     
                                                  NUMBER OF   PERCENTAGE OF     COMPOUND ANNUAL  
                PRODUCT CATEGORY                    SKU'S    1997 GROSS SALES  GROSS SALES GROWTH
                ----------------                  ---------  ----------------  ------------------
                                                                                                 
TWINLAB Division.................................     967          73.9%              18.9%      
Herbal Supplements and Phytonutrients............     590          17.4               36.2       
Herb Teas........................................     190           3.5               29.4       
Network Marketing................................      10           3.0                 NA       
Publishing.......................................      NA           2.2               17.2       
                                                    -----         -----               ----       
                                                    1,757         100.0%              21.6%      
                                                    =====         =====               ====       

     Vitamins, Minerals and Amino Acids.  The vitamins, minerals and amino acids
category is comprised of a complete line of vitamins, minerals and amino acids  
marketed under the TWINLAB brand name, including multivitamins and single-entity
vitamins (such as B-complex, C and E), minerals (such as calcium and magnesium) 
and amino acids (such as glutamine and carnitine). These products are available 
in a variety of delivery forms, including liquid, powder, capsule and tablet to 
accommodate a variety of consumer preferences. This category targets a broad    
array of health conscious consumers, with particular emphasis on consumers who  
utilize nutritional supplements in their daily diet and who demand premium      
quality ingredients in a broad variety of dosages and delivery methods.         

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     Sports Nutrition.  The sports nutrition category consists of a wide variety
of nutritional supplements designed for and targeted to athletes. These products
are specially formulated to help athletes achieve their personal physical goals 
and enhance performance. Sports nutrition products include Hydra Fuel and Ultra 
Fuel drinks, which replenish glucose and electrolytes depleted during strenuous 
exercise; DietFuel, RxFuel and Ripped Fuel, which are marketed for the          
preservation of lean body mass and the building of muscle mass, in conjunction  
with a low fat diet and exercise program; Creatine Fuel, a university tested    
supplement designed to increase body mass and muscular performance; and         
Metabolift, a successful thermogenic formula. The Company plans to introduce a  
line of sports nutrition products under a new proprietary brand name in the mass
market channel during fiscal 1998. The Company's sports nutrition products are  
utilized by both amateur and professional athletes in a variety of competitive  
sports. The Company believes that its strong sports nutrition business serves to
increase the Company's brand awareness among customers who, as they grow older, 
are likely to shift their buying patterns to include the Company's vitamins,    
herbs and other nutraceuticals.                                                 

Special Formulas.  The special formulas category consists of a broad  
assortment of products formulated with specific health conditions or objectives 
in mind. Special formulas are primarily targeted to sophisticated users of      
health related products, including regular customers of health food stores.     
Examples include OcuGuard Plus with Lutein, which is formulated for nutritional 
support for the eyes, Coenzyme Q(10), which is designed for cardiovascular      
health, MaxiLIFE Glucosamine Sulfate and Chondroitin Sulfate Formula, which     
nutritionally supports healthy bone and joint function, and the MaxiLIFE        
Protector Series, the first premium supplement line to target the body's most   
aging-prone areas. In addition, the Company sells a variety of fish and marine  
oils in a number of different delivery forms which offer a multitude of         
nutritional benefits, including favorable effects on cardiovascular health.     

Herbal Supplements and Phytonutrients.  Herbal supplements and        
phytonutrients (produced from nutrients from botanical sources that are         
considered to have medicinal properties) have become increasingly important     
categories across all distribution channels. Through its Nature's Herbs product 
line, the Company produces a full line of herbal supplements and phytonutrients 
which offer natural alternatives to over-the-counter ("OTC") medications. The   
Company manufactures and markets approximately 600 herbal and botanical         
supplements which are produced at the Company's modern FDA registered Utah      
Facility and sold under the Nature's Herbs and HealthCare Naturals brand names. 
Nature's Herbs products include single herbs, such as saw palmetto, garlic,     
ginseng and golden seal; traditional combinations, such as echinacea-golden     
seal; standardized extracts, such as St. John's Wort Power, Gingko Power,       
Bilberry Power and Milk Thistle Power sold under the POWER HERBS(R) brand name; 
and natural HealthCare product formulations, such as Allerin and Coldrin.       
Nature's Herbs recently introduced the first line of time-release herbs ever    
developed. This advanced technology includes a unique micro-encapsulation       
process that permits the Company's finely granulated herbal extracts to dissolve
gradually and consistently throughout the day. Nature's Herbs products are      
packaged using the innovative FRESH CARE(R) System developed by the Company. The
FRESH CARE System is the first all-glass and antioxidant-protected herbal       
packaging system that helps remove oxygen while locking out air, moisture and   
light in order to maintain potency and to extend freshness. Management believes 
that the association of the Nature's Herbs product line with TWINLAB's strong   
name brand recognition and reputation for premium quality and service, combined 
with the increased penetration of herbal supplements and phytonutrients in the  
growing health food store channel of distribution, have contributed to the rapid
growth experienced by this product line. The HealthCare Naturals product line   
also continues to gain strength and recognition in the mass market channel.     

    Herb Teas.  Through its Alvita product line, the Company offers almost 200
herb teas in both single use bags and bulk. Alvita is a leading brand of herb   
tea and is one of the most recognizable tea brands sold through health food     
stores. Founded in 1922, Alvita is one of the nation's oldest herb tea          
companies. Alvita purchases tea in bulk form, formulates blends of natural herb 
teas and designs the packaging for its products. Alvita's teas are currently    
blended and packaged by an independent contractor. Alvita teas include          
Peppermint Leaf, Chamomile, Echinacea, Golden Seal, Ginger and Senna Leaf, as   
well as new-age blends such as Chinese Green Tea, available in a choice of      
citrus flavors, and TrimTime Thermogenic Diet Tea. Alvita markets its products  
with an environmentally conscious theme by packaging bulk tea and tea bags in   
paper and by not                                                                

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utilizing shrink wrap for either its outer boxes or tea bags. Beginning in 1996,
Alvita launched a new line of herbal tea blends named Herbal Remeteas, including
Highland Lullaby, Manchurian Brain Blend, Jamaica Digesti Brew, and Canadian    
Natur-Tussin. The Company believes that significant opportunities for product   
line expansion exist in combining Alvita teas and other nutritional supplements 
to create a new delivery form for traditional herbal supplements and            
phytonutrients.                                                                 

Network Marketing.  Through Changes International, a network marketing
company which was acquired in November 1997, the Company develops, markets and  
sells vitamins, herbs and nutritional supplements exclusively under the Changes 
brand name. Changes International operates through a large sales force of       
independent distributors located throughout the United States and Canada.       
Changes International's products include Changes Relief, an advanced supplement 
that nutritionally supports healthy bone and joint functions, and Perfor-Max, an
antioxidant formula containing grapeseed extract, pine bark extract and tumeric.
All of Changes International's products are specially formulated and packaged   
and are manufactured by an independent contractor pursuant to the Company's     
specifications solely for the network marketing channel and are not intended for
sale to retail outlets. During 1998, the Company intends to more than double the
size of Changes International's nutritional product line, beginning with the    
introduction of eight new products during the first half of 1998.               

Publishing.  Through ARP, the Company publishes All Natural Muscular  
Development, a high-quality physique and fitness magazine featuring a scientific
advisory board and contributors considered to be among the most accomplished and
knowledgeable in their respective fields. The magazine covers recent            
developments and provides innovative information in the fields of training and  
nutrition research, supplements, health, fitness and diet. This publication     
serves as a useful vehicle to increase public awareness of the Company's        
products and as an outlet for a portion of the Company's advertising program.   
All Natural Muscular Development currently has a monthly paid circulation of    
approximately 104,000 readers. ARP is planning to offer a line of All Natural   
Muscular Development sports nutrition products which are expected to be         
introduced in the second half of 1998. The Company also publishes health and    
fitness related books and is exploring the introduction of new health and       
fitness related products.                                                       

PRODUCT DEVELOPMENT                                                             

     The Company is recognized as an industry leader in new product development.
The Company closely monitors consumer trends and scientific research, and has   
consistently introduced innovative products and programs in response thereto.   
The Company's product development staff regularly studies over 50 different     
health and nutrition periodicals, including the New England Journal of Medicine 
and the Journal of the American Medical Association, in order to generate ideas 
for new product formulations. Management believes that the Company's            
introduction of new products has increased market share for both the Company and
its retail customers, and the Company intends to continue developing new        
products and programs in the future. The Company was the first major nutritional
supplement manufacturer to introduce such industry-wide innovations as: an      
all-capsule vitamin and mineral line that is well tolerated by allergy-prone    
individuals; a complete line of amino acids and fish and marine oils; the most  
advanced and complete array of antioxidants, including beta carotene, lutein,   
lycopene, L-glutathione, N-acetyl cysteine (NAC), lipoic acid and an entirely   
new class of antioxidants, including polyphenols, flavonoids and isoflavones;   
concentrated Coenzyme Q(10); chondroitin sulfate; thermogenic products;         
standardized herbal extracts guaranteeing potency (Certified Potency); the FRESH
CARE packaging system, designed to preserve potency and freshness; a full line  
of Ayurvedic Indian herbal products; and a complete line of herb teas in single 
use bag and bulk form. From 1991 through 1997, the Company introduced over 560  
products, with over 100 new products introduced in 1997. Representative products
introduced in 1997 include MaxiLIFE SOY Cocktail, an advanced nutraceutical     
drink rich in soy and isoflavones; Creatine Fuel Chews, chewable wafers         
containing one gram of pure creatine monohydrate; St. John's Power 0.3%, a      
concentrated extract of St. John's wort; and caffeine-free Chinese Green Tea, a 
popular drink consumed worldwide for its health benefits. In 1998, the Company  
expects to introduce over 100 new products in the health food and mass market   
retail channels, 18 of which have already been introduced. Representative       
products introduced in 1998 include MaxiLIFE Joint Food, an advanced            
nutraceutical which supports healthy cartilage and joint function, and Triple   
Whey Fuel, a product                                                            

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containing high biological value whey protein. The Company also plans to more   
than double the number of products offered through Changes International's      
distribution network. The Company's research and development expenses were $1.1 
million in 1997, 1996 and 1995.                                                 

SALES AND DISTRIBUTION                                                          

    The Company believes that its TWINLAB products have a presence in over 90%
of the health food stores in the United States, but that only approximately 12% 
of such stores carry a comprehensive line of the Company's products. The Company
sells its products primarily through a network of approximately 60 distributors,
which service approximately 11,000 health food stores throughout the country and
selected retail outlets. Sales to domestic distributors represented             
approximately 79.3% of the Company's net sales in 1997. The Company's           
distributor customers include GNC, Tree of Life, United Natural Foods, Inc.     
("United Naturals"), Nature's Best, Inc. and other distributors that supply     
retailers of vitamins, herbs and other nutritional supplements. Management      
believes that it sells its products to every major nutritional supplement       
distributor servicing health food stores and is generally the largest           
independent supplier of nutritional supplements to such distributors. The       
Company is also currently expanding distribution into domestic military         
exchanges.                                                                      

     Several of the Company's distributors, such as GNC, Tree of Life and United
Naturals, are national in scope, but most are regional in nature and operate one
or more localized distribution centers. Generally, the Company enters into      
nonexclusive area rights agreements with its domestic distributors, who are also
responsible for new account development. Retailers typically place orders with  
and are supplied directly by the Company's distributors. In the past ten years, 
the Company has not lost a major distributor customer other than through        
consolidation with an existing customer of the Company. The breadth and depth of
the products manufactured and the ability to manufacture with minimal throughput
times enables the Company to maintain extremely high order fill rates, which    
management believes are among the highest in the industry, with its customer    
base.                                                                           

     Tree of Life and GNC accounted for approximately 19% and 23%, respectively,
of the Company's net sales in 1997. No other single customer accounted for more 
than 10% of the Company's net sales in 1997. The largest retail organization    
which sells the Company's products is GNC, with approximately 3,400 stores.     

    The Company believes that substantial long-term growth opportunities exist
within the mass market distribution channel. The Company's major customers among
mass market retailers include Wal-Mart, Albertson's, Inc., American Stores,     
Inc., Duane Reade Inc., Rite Aid Corporation and Safeway, Inc. Management is    
continuing its efforts to expand its presence in mass market retail outlets and 
recently hired a President of Mass Market Sales to oversee the Company's efforts
in this distribution channel.                                                   

     Changes International currently markets and distributes 10 products through
a network of over 60,000 independent distributors in the United States and      
Canada. The distributor network markets Changes International's products        
directly to consumers.                                                          

  Approximately 5.1%, or $10.9 million, of the Company's net sales in 1997
were derived from international sales originating from overseas distributor     
organizations. The Company presently has distribution agreements covering       
fourteen western European countries, including Great Britain, France, Belgium,  
the Netherlands and the Scandinavian countries; six eastern European countries, 
including Russia; nine Latin American countries, including Mexico, Brazil and   
Argentina; eight Middle Eastern countries, including Israel and Saudi Arabia;   
and several other countries in the Far East and the Caribbean. The Company has  
also initiated new programs to qualify distributors in Italy and China.         

MARKETING                                                                       

The Company's marketing strategy, which centers around an extensive   
advertising and promotion program, has been a critical component of the         
Company's growth, strong brand name recognition and leading position within the 
nutritional supplement industry.                                                

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 The Company's marketing and advertising expenditures were approximately
$15.9 million in 1997, $12.7 million in 1996 and $11.1 million in 1995. The     
Company has budgeted $20.5 million for marketing and advertising expenditures in
fiscal 1998, a 29.2% increase over fiscal 1997. Approximately 45.5% of the      
Company's 1998 advertising budget is slated for network and cable television    
programming. Of the Company's \$13.0 million in 1997 advertising expenditures,  
approximately $4.8 million, or 37.3%, was spent on print advertising,           
approximately $5.1 million, or 38.8%, was spent on television and radio         
advertising and approximately $3.1 million, or 23.9%, was spent on production of
advertising materials. As the Company's customers align themselves with fewer   
vendors of brand name products, the Company believes that its strong commitment 
to advertising and promotion will continue to constitute a significant          
competitive advantage. The Company's advertising strategy stresses brand        
awareness of the Company's various product categories in order to generate      
purchases by customers and also communicates the points-of-difference between   
the Company's products and those of its competitors.                            

Print advertisements continue to be an integral part of the Company's 
advertising efforts. The Company regularly advertises in consumer magazines such
as Better Nutrition, Delicious, Vegetarian Times, Let's Live, Natural Health,   
Nutrition Science Journal, New Age Journal, Muscle & Fitness and Flex. The      
Company also plans to expand its print advertising into more widely circulated  
publications such as GQ, Men's Health & Fitness and Reader's Digest.            

   Other marketing and advertising programs conducted by the Company include
participation in or sponsorship of sporting events such as running competitions,
including the Boston Marathon and the Los Angeles Marathon, and bodybuilding    
shows, including Team Universe, Fitness America and Natural Eastern Classic, and
sponsorship of health-oriented television and radio programs. In addition, the  
Company promotes its products at major industry trade shows and through in-store
point of sale materials. The Company also engages athletic personalities as well
as scientists to communicate on the Company's behalf with the trade and the     
public and to promote the Company's products.                                   

     The Company extended its marketing efforts in 1997 to include a new site on
the World Wide Web at http://www.twinlab.com, which provides an overview of the 
Company in addition to a product catalog. The site also provides a list of      
retailers carrying the Company's products and is linked to other sites,         
including those of the Company's Nature's Herbs division                        
(http://www.herbalvillage.com) and the publishing division                      
(http://www.musculardevelopment.com). Changes International's web site can be   
reached at http://www.changesinternational.com. Information contained in any of 
the Company's Web sites shall not be deemed to be a part of or incorporated by  
reference into this Prospectus.                                                 

CUSTOMER SALES SUPPORT                                                          

The Company's established customer relationships are based upon the   
Company's long-standing commitment to a high level of customer service. The     
Company's sales force currently consists of 32 dedicated sales professionals    
whose primary functions are to gain better placement and additional shelf space 
for TWINLAB, Nature's Herbs and Alvita products and to stay abreast of customer 
needs. These sales representatives are assigned to specific territories covering
the entire continental United States and Alaska. These personnel work with      
direct accounts, distributors and individual retailers to enhance knowledge of  
the Company's products and to maximize exposure for TWINLAB, Nature's Herbs and 
Alvita products. An additional sales and marketing staff supports Nature's Herbs
products and the servicing of customer needs. The Company is presently expanding
its administrative and sales infrastructure to service its increased sales in   
the mass market channel. The Company also designs and supplies a broad range of 
marketing literature, including brochures, pamphlets and in-store display       
materials to help educate retailers and consumers as to the benefits of the     
Company's products.                                                             

    The Company operates an in-house customer service department to respond to
inquiries requesting information concerning product applications, background    
data, ingredient compositions and the efficacy of products. The department is   
currently staffed by three nutrition experts.                                   

  Changes International provides its independent distributors with a broad
range of informational materials, including product brochures, sales tools,     
business and information forms, audio materials and initial distributor         
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startup kits. Changes International maintains a 24-hour toll-free phone line for
receiving distributors' orders and a separate customer service line to answer   
product questions.                                                              

MANUFACTURING AND PRODUCT QUALITY                                               

 Virtually all of the Company's TWINLAB products are manufactured at the
Company's 72,000 square foot manufacturing facility located in Ronkonkoma, New  
York (the "New York Facility"). Herbal supplements and phytonutrients are       
manufactured at the Company's 57,000 square foot FDA registered Utah Facility   
and at the New York Facility. Herb teas are currently packaged by an independent
contractor and are warehoused at the Utah Facility. Changes International's     
product line is currently manufactured and packaged by an independent contractor
pursuant to the Company's specifications and warehoused in Destin, Florida. The 
Company's two modern manufacturing facilities provide the Company with the      
capability to promptly meet customers' sales demands and to maintain the highest
level of quality control. The Company is continuously upgrading its facilities  
and enhancing its manufacturing capabilities through new equipment purchases and
technological improvements. Management believes that the Company's manufacturing
facilities are among the most advanced in the nutritional supplement industry.  
In 1996, the Company completed an addition of approximately 8,500 square feet to
the Utah Facility to provide additional plant capacity for the operations of the
Nature's Herbs and Alvita divisions of the Company. In March 1998, the Company  
commenced construction of an 85,000 square foot addition to its Utah Facility   
which will provide additional capacity for the production, warehouse and        
distribution operations, as well as additional office space for the Nature's    
Herbs and Alvita divisions. The cost of the project, including land,            
construction and equipment, will total approximately $13.0 million,             
approximately $8.0 million of which will be financed through a nine-month       
construction loan that will be converted to a fifteen year mortgage. Management 
believes that the Company's New York and Utah Facilities will be sufficient to  
enable the Company to meet sales demand for the foreseeable future. If          
additional space is required, management believes that it will have the option  
to lease or purchase additional space or to construct an additional facility.   

The Company's modern manufacturing operations feature pharmaceutical  
quality blending, filling and packaging capabilities, which enable the Company  
to offer quality and consistency in formulation and dosage forms. The Company   
operates flexible manufacturing lines which enable it to efficiently and        
effectively shift output among various products as dictated by customer demand. 
The Company is capable of producing over 40 million capsules and tablets, over  
100,000 pounds of blended powder and up to 2,500 gallons of liquid preparations 
per day. The Company has ten high-speed capsule and tablet packaging lines, two 
high-speed liquid filling lines and two powder filling lines, which are capable 
of operating simultaneously, at its New York and Utah Facilities. The Company   
manufactures the powders used in its Ultra Fuel, Hydra Fuel and Nitro Fuel      
single-serving sports drink products and utilizes a contract bottler for the    
hydration and bottling of these products. The Company operates on a 24-hour work
day that includes two production shifts and a third shift primarily for         
cleaning, maintenance and equipment set-up.                                     

The Company sources its raw material needs from over 200 different    
suppliers, including some of the largest pharmaceutical and chemical companies  
in the world. The Company's raw materials and packaging supplies are readily    
available from multiple suppliers, and the Company is not dependent on any      
single supplier for its needs. No single supplier accounted for more than 10% of
the Company's total purchases in 1997.                                          

    The Company's quality standards are a critical factor in consumer purchase
decisions, and the Company believes it has established a competitive advantage  
based on the quality of its products. All capsule and tablet products           
manufactured by the Company are visually inspected before being packaged.       
Moreover, each of the Company's products undergoes comprehensive quality control
testing procedures from the receipt of raw materials to the release of the      
packaged product. The Company utilizes real-time computerized monitoring of its 
manufacturing processes to ensure proper product weights and measures. In       
addition, the Company maintains two in-house laboratories with state-of-the-art 
testing and analysis equipment where the Company performs most of its testing,  
including stability tests, active component characterization utilizing          
thin-layer and high-pressure liquid chromatography, and UV visible and infrared 
spectrometry. The Company contracts with independent laboratories to perform the
balance of its testing requirements. A team of 63 full-time                     

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quality assurance professionals regularly conducts a wide variety of visual and 
scientific tests on all manufactured products, and samples of raw materials and 
finished products are retained for quality control purposes for up to five      
years.                                                                          

The Company has a strong commitment to maintaining the quality of the 
environment. All of the Company's plastic and corrugated cardboard containers   
are recyclable and, wherever possible, the Company uses recyclable glass. The   
Company was also one of the first companies in the industry to use biodegradable
starch pellets for packing materials. In addition, the Company has removed most 
solvents from its production processes (using natural, environmentally-safe     
alternatives) and helped develop a special glue, for manufacturing purposes,    
that contains virtually no harmful hydrocarbons. The Company believes it is in  
material compliance with all applicable environmental regulations.              

COMPETITION                                                                     

 Vitamins and nutritional supplements are sold primarily through several
channels of distribution: health food stores, mass market retailers (drug store 
chains, supermarkets and other mass merchandisers), and direct sales channels   
(including network marketing and catalog distribution).                         

     The Company's principal competitors in the health food store market include
Nutraceutical International Corporation, Weider Nutrition International, Inc.,  
Nature's Way Products, Inc., Solgar Vitamin and Herb Company, Inc. and Nature's 
Plus Inc. Private label products of the Company's customers also provide        
competition to the Company's products. For example, a substantial portion of    
GNC's vitamin and mineral supplement offerings are products offered under GNC's 
own private label.                                                              

   The Company believes that the growing number of health food retailers are
increasingly likely to align themselves with those companies which offer a wide 
variety of high quality products, have a loyal customer base, support their     
brands with strong marketing and advertising programs and provide consistently  
high levels of customer service. The Company believes that it competes favorably
with other nutritional supplement companies because of its comprehensive line of
products, premium brand names, commitment to quality, ability to rapidly        
introduce innovative products, competitive pricing, high customer-order fill    
rate, strong and effective sales force and distribution network, and            
sophisticated advertising and promotional support. The wide variety and         
diversity of the forms, potencies and categories of the Company's products are  
important points of differentiation between the Company and many of its         
competitors.                                                                    

 In the mass market retail channel of distribution, the Company competes
with major private label and broadline brand manufacturers, including Leiner    
Health Products Inc., Pharmavite Corp., Rexall Sundown, Inc. and NBTY, Inc.,    
certain of which are larger and have access to greater resources than the       
Company. The Company competes on the basis of customer service, product quality,
pricing and marketing support. The Company believes that it competes favorably  
with other companies because of its (i) sales and marketing strategies, (ii)    
customer service (including speed of delivery) and (iii) reputation as being a  
supplier of quality products.                                                   

 Many of the Company's competitors in markets other than the health food
store market, including the major pharmaceutical companies, have substantially  
greater financial and other resources than the Company.                         

   Although Changes International competes with other health and nutritional
food companies, the Company believes Changes International's primary competition
stems from other network marketing companies. Changes International competes in 
the recruitment of independent distributors with other network marketing        
organizations whose product lines may or may not compete with its products.     

REGULATORY MATTERS                                                              

Government Regulation                                                       

The manufacturing, processing, formulating, packaging, labeling and   
advertising of the Company's products are subject to regulation by one or more  
federal agencies, including the FDA, the FTC, the Consumer Product Safety       
Commission, the United States Department of Agriculture and the Environmental   

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Protection Agency. These activities are also regulated by various agencies of   
the states, localities and foreign countries to which the Company's products are
distributed and in which the Company's products are sold. The FDA, in           
particular, regulates the formulation, manufacture and labeling of vitamin and  
other nutritional supplements.                                                  

    On October 25, 1994, the President signed into law the DSHEA. This new law
revises the provisions of the FFDC Act concerning the composition and labeling  
of dietary supplements and, in the judgment of the Company, is favorable to the 
dietary supplement industry. The legislation creates a new statutory class of   
"dietary supplements." This new class includes vitamins, minerals, herbs, amino 
acids and other dietary substances for human use to supplement the diet, and the
legislation grandfathers, with certain limitations, dietary ingredients on the  
market before October 15, 1994. A dietary supplement which contains a new       
dietary ingredient, one not on the market before October 15, 1994, will require 
evidence of a history of use or other evidence of safety establishing that it   
will reasonably be expected to be safe. The substantial majority of the products
marketed by the Company are classified as dietary supplements under the FFDC    
Act.                                                                            

    Both foods and dietary supplements are subject to the NLEA which prohibits
the use of any health claim for foods, including dietary supplements, unless the
health claim is supported by significant scientific agreement and is either     
pre-approved by the FDA or the subject of substantial government scientific     
publications and a notification to the FDA. To date, the FDA has approved the   
use of only limited health claims for dietary supplements. However, among other 
things, the DSHEA amends, for dietary supplements, the NLEA by providing that   
"statements of nutritional support" may be used in labeling for dietary         
supplements without FDA pre-approval if certain requirements, including         
prominent disclosure on the label of the lack of FDA review of the relevant     
statement, possession by the marketer of substantiating evidence for the        
statement and post-use notification to the FDA, are met. Such statements may    
describe how particular nutritional supplements affect the structure, function  
or general well-being of the body (e.g. "promotes your cardiovascular health"). 

   The FDA issued final dietary supplement labeling regulations in 1997 that
require the Company to revise most of its product labels by 1999. The           
regulations also currently require the Company to submit notification to the FDA
of all "statements of nutritional support," a process that the Company has not  
fully completed.                                                                

     Advertising and label claims for dietary supplements and conventional foods
have been regulated by state and federal authorities under a number of disparate
regulatory schemes. There can be no assurance that a state will not interpret   
claims presumptively valid under federal law as illegal under that state's      
regulations, or that future FDA regulations or FTC decisions will not restrict  
the permissible scope of such claims.                                           

  Governmental regulations in foreign countries where the Company plans to
commence or expand sales may prevent or delay entry into the market or prevent  
or delay the introduction, or require the reformulation, of certain of the      
Company's products. Compliance with such foreign governmental regulations is    
generally the responsibility of the Company's distributors for those countries. 
These distributors are independent contractors over whom the Company has limited
control.                                                                        

     As a result of the Company's efforts to comply with applicable statutes and
regulations, the Company has from time to time reformulated, eliminated or      
relabeled certain of its products and revised certain provisions of its sales   
and marketing program. The Company cannot predict the nature of any future laws,
regulations, interpretations or applications, nor can it determine what effect  
additional governmental regulations or administrative orders, when and if       
promulgated, would have on its business in the future. They could, however,     
require the reformulation of certain products to meet new standards, the recall 
or discontinuance of certain products not capable of reformulation, additional  
recordkeeping, expanded documentation of the properties of certain products,    
expanded or different labeling, and/or scientific substantiation. Any or all of 
such requirements could have a material adverse effect on the Company's results 
of operations and financial condition.                                          

     The Company's Utah Facility is registered with the FDA as a manufacturer of
OTC drugs and is subject to periodic inspection by the FDA.                     

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   Compliance with the provisions of national, state and local environmental
laws and regulations has not had a material adverse effect upon the capital     
expenditures, earnings, financial position, liquidity or competitive position of
the Company. See also "Business -- Legal Matters."                              

Ma Huang                                                                    

 Approximately 15 of the Company's products include an herb known as "Ma
Huang," which contains naturally-occurring ephedrine. Certain of such products  
also contain caffeine or other central nervous system stimulants. Such products 
accounted for approximately 13.0% of the Company's net sales in 1997. The       
Company's products which contain Ma Huang are generally marketed for            
bodybuilding, weight loss, sports nutrition and other purposes, including       
increased endurance and energy, generally in conjunction with diet or exercise, 
and as natural alternatives to over-the-counter medications.                    

  Ma Huang has been the subject of certain adverse publicity in the United
States and other countries relating to alleged harmful or adverse effects. The  
FDA has proposed regulations relating to the sale of dietary supplements        
containing Ma Huang which, if promulgated in final form, would require the      
Company to substantially reformulate and relabel almost all of its Ma Huang     
products and would limit potency, require warnings, prohibit certain combination
products and would preclude the Company from making bodybuilding and weight loss
claims for such products. Comments from industry participants and inquiries from
Committees of the United States Congress have been filed with the FDA           
challenging the scientific and legal basis for the proposed regulations. The    
Company is not able to predict whether the FDA's proposed regulations will      
become final. There can be no assurance as to the effect that any resulting     
reformulation, relabeling or change in the marketing of the Company's products  
would have on the sales of such products. In 1996, the Company introduced a line
of Ma Huang-free products as alternatives to certain of its bodybuilding and    
sports nutrition products which currently contain Ma Huang. The Company's net   
sales of Ma Huang-free products were $1.9 million for fiscal 1997. There can be 
no assurance that sales of such alternative products would offset any decrease  
in sales attributable to any reformulation or relabeling of the Company's Ma    
Huang products.                                                                 

     A number of state and local governments have proposed or passed legislation
prohibiting or regulating the sale of Ma Huang products. The Company's products 
containing Ma Huang may become subject to further federal, state, local or      
foreign laws or regulations, which could also require the Company to reformulate
its products with reduced ephedrine levels or with a substitute for Ma Huang    
and/or relabel its products with different warnings or revised directions for   
use. There can be no assurance that the loss of sales of the Company's Ma Huang 
products would not have a material adverse effect on the Company. See           
"Business -- Legal Matters."                                                    

EMPLOYEES                                                                       

   At December 31, 1997, the Company employed 634 persons, of which 134 were
involved in executive, sales and administrative activities. The balance of the  
Company's employees were engaged in production, packaging and shipping          
activities. Changes International also subcontracts an additional 67 persons    
from an independent personnel agency. None of the Company's employees are       
covered by a collective bargaining agreement, and management considers relations
with its employees to be good.                                                  

PROPERTIES                                                                      

The Company owns a modern vitamin, mineral and nutritional supplement 
manufacturing facility in Ronkonkoma, New York. The 72,000 square foot New York 
Facility also houses the Company's executive offices. The Company recently      
signed a lease for approximately 21,000 square feet of space in a modern office 
building in Hauppauge, New York and expects to move all of its corporate and    
most of its administrative offices to this location in the second quarter of    
fiscal 1998. The Company leases 26,300 square feet of warehouse space in        
Ronkonkoma, 60,000 square feet of warehousing space in Hauppauge, and 5,000     
square feet of office space in Ronkonkoma. In addition, the Company owns the    
modern FDA-registered 57,000 square foot Utah Facility. The Utah Facility, which
was initially constructed in 1993, houses office,                               

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manufacturing and warehousing facilities for the operations of the Nature's     
Herbs division and office and warehousing facilities for the operations of the  
Alvita division. The Company also leases 21,500 square feet of warehouse and    
office space in Destin, Florida for Changes International.                      

   The Company believes that its facilities and equipment generally are well
maintained and in good operating condition. In 1996, the Company completed an   
addition of approximately 8,500 square feet to the Utah Facility at a cost of   
approximately $754,000 to provide additional plant capacity for the operations  
of the Nature's Herbs and Alvita divisions of the Company. In March 1998, the   
Company commenced construction of an 85,000 square foot addition to its Utah    
Facility which will provide additional capacity for the production, warehouse   
and distribution operations, as well as additional office space for the Nature's
Herbs and Alvita divisions. The cost of the project, including land,            
construction and equipment, will total approximately $13.0 million,             
approximately $8.0 million of which will be financed through a nine-month       
construction loan that will be converted to a fifteen year mortgage. Management 
believes that the Company's New York and Utah Facilities will be sufficient to  
enable the Company to meet sales demand for the foreseeable future. If          
additional space is required, management believes that it will have the option  
to lease or purchase additional space or to construct an additional facility.   

TRADEMARKS                                                                      

  The Company owns trademarks registered with the United States Patent and
Trademark Office and/or similar regulatory authorities in many other countries  
for its TWINLAB, Nature's Herbs, Alvita, Changes and Fuel family of trademarks, 
and has rights to use other names material to its business. In addition, the    
Company has obtained trademarks for various of its products and has             
approximately 289 trademark registrations with the United States Patent and     
Trademark Office for TWINLAB, Nature's Herbs, Alvita and Changes brands.        
Federally registered trademarks have perpetual life, provided they are renewed  
on a timely basis and used properly as trademarks, subject to the rights of     
third parties to seek cancellation of the marks. The Company regards its        
trademarks and other proprietary rights as valuable assets and believes that    
they have significant value in the marketing of its products. The Company       
vigorously protects its trademarks against infringement.                        

LEGAL MATTERS                                                                   

The Company, like other retailers, distributors and manufacturers of  
products that are ingested, faces an inherent risk of exposure to product       
liability claims in the event that, among other things, the use of its products 
results in injury. The Company may be subjected to various product liability    
claims, including, among others, that its products contain contaminants or      
include inadequate instructions as to use or inadequate warnings concerning side
effects and interactions with other substances. While such claims to date have  
not been material to the Company and the Company maintains product liability    
insurance, there can be no assurance that product liability claims and the      
resulting adverse publicity will not have a material adverse effect on the      
Company. The Company carries insurance in the types and amounts that management 
considers reasonably adequate to cover the risks associated with its business.  
There can be no assurance that such insurance will continue to be available at a
reasonable cost, or if available will be adequate to cover liabilities.         

The Company has been a defendant in court actions seeking damages for 
alleged personal injuries resulting from products containing allegedly          
contaminated added manufactured L-Tryptophan. To date, 132 of the 133           
L-Tryptophan actions brought against the Company (the "L-Tryptophan Actions")   
have been dismissed or settled at no cost to the Company pursuant to an         
indemnification agreement (the "Indemnification Agreement") between the Company 
and a U.S. subsidiary of the Japanese manufacturer of the allegedly contaminated
ingredient. The Company believes that few new lawsuits are likely to be brought 
in view of applicable statutes of limitation and, in light of the               
Indemnification Agreement and the resolution of virtually all of the            
L-Tryptophan Actions at no cost to the Company, that the prospect of the        
remaining L-Tryptophan Actions and any possible future actions having a material
adverse effect on the Company's results of operations or financial condition is 
remote. The Company ceased marketing products containing added manufactured     
L-Tryptophan in 1990.                                                           

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The Company has been named as a defendant in three currently pending  
lawsuits alleging that its Ma Huang containing products caused injuries and/or  
damages, including a proceeding seeking class action certification. The Company 
intends to vigorously defend these lawsuits. The Company believes that such     
claims, if successful, would not have a material adverse effect on the financial
condition or results of operations of the Company. There can be no assurance    
that the Company will not be subject to further private civil actions with      
respect to its Ma Huang products.                                               

     The State of California and the NRDC filed lawsuits against the Company and
a large number of manufacturers of dietary supplements containing calcium,      
claiming that naturally-occurring lead levels in these supplements exceed       
acceptable levels under California law ("Proposition 65"). The NRDC settled its 
suit with the manufacturers, including the Company. The State of California     
settled the first of two phases of its lawsuit with the Company and the other   
manufacturers and is engaged in settlement discussions with respect to the      
remainder of the case. The Company also received notice of a possible State of  
California legal claim relating to alleged toxic impurities in fish oil         
products. No action has been filed. There can be no assurance that the Company  
will not be the subject of future Proposition 65 claims asserted by the State of
California or private parties.                                                  

     The Company is presently engaged in various other legal actions which arise
in the ordinary course of business. Although ultimate liability cannot be       
determined at the present time, the Company believes that the amount of any such
liability, if any, from these other actions, after taking into consideration the
Company's insurance coverage, will not have a material adverse effect on its    
results of operations or financial condition.                                   

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MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS                                                

   The following table sets forth certain information concerning each of the
Company's directors and executive officers:                                     

                                                        [Enlarge/Download Table]

                   NAME                    AGE                        POSITION                      
                   ----                    ---                        --------                      
                                                                                                    
Ross Blechman(1).......................... 44   Chairman of the Board, Chief Executive Officer,     
                                                President and Director                              
Brian Blechman(2)......................... 47   Executive Vice President, Treasurer and Director    
Dean Blechman............................. 40   Executive Vice President and Director               
Neil Blechman............................. 47   Executive Vice President, Secretary and Director    
Steve Blechman............................ 44   Executive Vice President and Director; Chairman of  
                                                the Board, Chief Executive Officer, Director and    
                                                President of ARP                                    
John McCusker............................. 58   Chief Financial Officer                             
Stephen L. Welling........................ 43   President of the Nature's Herbs division of Twin and
                                                Director                                            
John G. Danhakl(1)(2)..................... 41   Director                                            
Jennifer Holden Dunbar(1)(2).............. 35   Director                                            
Jonathan D. Sokoloff(1)................... 40   Director                                            

---------------                                                                 
(1) Member of the Compensation Committee                                        

(2) Member of the Audit Committee                                               

Ross Blechman became Chairman of the Board, Chief Executive Officer,  
President and Director of the Company on May 7, 1996. Mr. Blechman joined Twin  
Laboratories Inc. in 1974 and served as Vice President, Operations of the       
Company prior to May 7, 1996. Mr. Blechman is Chairman of the Board, President, 
Chief Executive Officer and Director of Twin, an Executive Vice President and   
Director of ARP and Chairman of the Board and a Director of Changes             
International.                                                                  

   Brian Blechman became an Executive Vice President, Treasurer and Director
of the Company on May 7, 1996. Mr. Blechman joined Twin Laboratories Inc. in    
1972 and served as Vice President, Purchasing & Quality Control of the Company  
prior to May 7, 1996. He is responsible for purchasing, plant operations,       
quality control and management. Mr. Blechman is an Executive Vice President and 
Director of Twin and ARP, and a Vice President, Treasurer and a Director of     
Changes International.                                                          

Dean Blechman became an Executive Vice President and Director of the  
Company on May 7, 1996. Mr. Blechman joined Twin Laboratories Inc. in 1979 and  
served as Vice President, Sales of the Company prior to May 7, 1996. He is      
responsible for sales and distribution. Mr. Blechman is an Executive Vice       
President and Director of Twin and ARP and a Vice President and Director of     
Changes International.                                                          

     Neil Blechman became an Executive Vice President, Secretary and Director of
the Company on May 7, 1996. Mr. Blechman joined Twin Laboratories Inc. in 1972  
and served as Vice President, Marketing & Advertising of the Company prior to   
May 7, 1996. He is responsible for marketing and advertising activities,        
promotional programs, merchandising strategies, packaging, trade shows and      
public relations. Mr. Blechman is an Executive Vice President, Secretary and    
Director of Twin and ARP and a Vice President, Secretary and a Director of      
Changes International.                                                          

Steve Blechman became an Executive Vice President and Director of the 
Company and Chairman of the Board, Chief Executive Officer, Director and        
President of ARP on May 7, 1996. Mr. Blechman joined Twin Laboratories Inc. in  
1974 and served as Vice President, Product Development & Marketing of the       
Company prior to May 7, 1996. He is involved in marketing, product development, 
customer service, public relations and the operations of ARP. Mr. Blechman is an
Executive Vice President and Director of Twin and a Vice President and Director 
of Changes International.                                                       

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     John McCusker became the Chief Financial Officer of the Company on November
3, 1997. He is responsible for financial management and the Company's MIS       
department. He was previously an independent financial consultant. From 1987 to 
1996, Mr. McCusker was Senior Vice President and Chief Financial Officer for    
Geraghty & Miller, Inc. Upon its 1995 merger with Arcadis NV, he was appointed  
to the additional position of Senior Vice President -- Investor Relations.      

   Stephen L. Welling became the President of the Nature's Herbs division of
Twin on May 7, 1996, and was elected to the Board of Directors of the Company on
September 16, 1997. Mr. Welling joined Natur-Pharma Inc. in 1977 as the         
controller and served as President of Natur-Pharma Inc. prior to May 7, 1996.   
Prior to his promotion to President, Mr. Welling served as Vice President of    
Operations of Natur-Pharma Inc. with responsibility for manufacturing,          
personnel, quality management, legal affairs and finance. Mr. Welling is on the 
board of directors of the National Nutritional Foods Association, a leading     
trade organization that governs the industry's retailers, distributors,         
suppliers and manufacturers.                                                    

 John G. Danhakl became a director of the Company on May 7, 1996. He has
been an executive officer and an equity owner of Leonard Green & Partners, L.P. 
("LGP"), a merchant banking firm which manages GEI, since 1995. Mr. Danhakl had 
previously been a Managing Director at Donaldson, Lufkin & Jenrette Securities  
Corporation ("DLJ") and had been with DLJ since 1990. Prior to joining DLJ, Mr. 
Danhakl was a Vice President at Drexel Burnham Lambert Incorporated ("Drexel"). 
Mr. Danhakl is also a director of Big 5 Corp., Communications & Power           
Industries, Inc., Leslie's Poolmart, Inc., Hechinger Company, The Arden Group,  
Inc. and Liberty Group Publishing, Inc. Mr. Danhakl also serves as a director of
Twin and ARP.                                                                   

Jennifer Holden Dunbar has been a director of the Company since its   
formation in February 1996. She joined Leonard Green & Associates, L.P. ("LGA"),
a merchant banking firm, as an associate in 1989, became a principal in 1993,   
and through a corporation became a partner in 1994. Since 1994, Ms. Holden      
Dunbar has also been an executive officer and equity owner of LGP. Ms. Holden   
Dunbar previously was an associate with the merchant banking firm of Gibbons,   
Green, van Amerongen and a financial analyst in mergers and acquisitions with   
Morgan Stanley & Co. Ms. Holden Dunbar is also a director of Gart Sports        
Company. Ms. Holden Dunbar also serves as a director of Twin and ARP.           

  Jonathan D. Sokoloff became a director of the Company on May 7, 1996. He
has been a partner of LGA since 1990 and has been an executive officer and      
equity owner of LGP since its formation in 1994. Mr. Sokoloff had previously    
been a Managing Director at Drexel. Mr. Sokoloff is also a director of Carr-    
Gottstein Foods Co., Gart Sports Company and Hechinger Company. Mr. Sokoloff    
also serves as a director of Twin and ARP.                                      

 The Company's By-laws and Certificate of Incorporation provide that the
Company's Board of Directors be comprised of such number of directors as        
determined from time to time by the Board of Directors, but in no event less    
than eight members. The Board is currently comprised of nine members. Each      
Director holds office until his successor is duly elected and qualified, or     
until his earlier death, resignation or removal.                                

Executive officers of the Company are appointed by and serve at the   
discretion of the Board of Directors and hold office until their respective     
successors are duly elected and qualified. Except for the Blechman Brothers'    
familial relationships, there are no family relationships among the executive   
officers or Directors of the Company.                                           

EMPLOYMENT AGREEMENTS                                                           

     On May 7, 1996, the Company entered into employment agreements with each of
the Blechman Brothers (each an "Employment Agreement"). Pursuant to the terms of
each Employment Agreement, the relevant individual will be employed as an       
executive of the Company and its subsidiaries until November 15, 1999, renewable
for terms of one year thereafter. The Employment Agreement provides for a base  
salary of $400,000 (as adjusted annually for inflation), in addition to other   
customary perquisites and benefits. In addition to receiving a base salary, the 
executive is also eligible to participate in Twinlab's Bonus Plan which entitles
such individual to a bonus payment of up to 128% of his base salary for the     
relevant calendar year based on annual increases in EBITDA (as defined therein) 
realized by the Company for each year of the employment term.                   

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Each Employment Agreement also provides, subject to certain exceptions, that    
upon a termination of the individual's employment during the term thereof (other
than for "cause" as defined therein), the Company is generally obligated to pay 
the individual an amount equal to his base salary for the remaining term under  
the Employment Agreement (which for this purpose, will be a three year period). 

On May 7, 1996, the Company entered into an employment agreement with 
Stephen L. Welling to serve as President of the Nature's Herbs division of Twin 
(the "Division") (as amended, the "Welling Employment Agreement"). The Welling  
Employment Agreement provides that Mr. Welling will be employed as an executive 
of the Company for a term of three years, renewable for terms of one year       
thereafter. The Welling Employment Agreement provides for a base salary of      
$200,000 (as adjusted for inflation), in addition to other customary perquisites
and benefits. In addition to receiving a base salary, Mr. Welling is also       
eligible to participate in the Division Bonus Plan which entitles him to a bonus
payment up to 202.5% of his base salary for the relevant calendar year based on 
annual increases in EBITDA (as defined therein) realized by the Division for    
each year of the employment term. The Welling Employment Agreement also         
provides, subject to certain exceptions, that upon a termination of Mr.         
Welling's employment during the term thereof (other than for "cause" as defined 
therein), the Company is generally obligated to pay Mr. Welling an amount equal 
to his base salary for the remaining term under the Welling Employment          
Agreement.                                                                      

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PRINCIPAL AND SELLING STOCKHOLDERS

    The information in the following table sets forth certain information with
respect to the beneficial ownership of the Common Stock of Twinlab as of the    
date of this Prospectus, by (i) each person who beneficially owns more than 5%  
of the outstanding shares of Twinlab's Common Stock, (ii) each executive officer
of the Company, (iii) each director of the Company, (iv) all directors and      
executive officers of the Company as a group, and (v) by the Selling            
Stockholders, and as adjusted at that date to reflect the sale by the Company   
and the Selling Stockholders of the shares of Common Stock offered hereby.      
Except as noted below, each person or entity has sole voting and investment     
power with respect to the shares shown.                                         

                                                        [Enlarge/Download Table]

                                          COMMON STOCK OWNED                          COMMON STOCK OWNED    
                                        BEFORE THE OFFERING(A)                     After the Offering(a)(b) 
                                        -----------------------  NUMBER OF SHARES  -------------------------
                                          NUMBER        PERCENT   BEING OFFERED      NUMBER         PERCENT 
                                        ----------      -------  ----------------  -----------      --------
                                                                                                            
Green Equity Investors II, L.P. ......   8,880,000       32.5%      3,605,635       5,274,365         16.8% 
  c/o Leonard Green & Partners, L.P.                                                                        
  11111 Santa Monica Blvd., Suite 2000                                                                      
  Los Angeles, CA 90025                                                                                     
John G. Danhakl(c)....................   8,880,000       32.5       3,605,635       5,274,365         16.8  
  c/o Leonard Green & Partners, L.P.                                                                        
  11111 Santa Monica Blvd., Suite 2000                                                                      
  Los Angeles, CA 90025                                                                                     
Jennifer Holden Dunbar(c).............   8,880,000       32.5       3,605,635       5,274,365         16.8  
  c/o Leonard Green & Partners, L.P.                                                                        
  11111 Santa Monica Blvd., Suite 2000                                                                      
  Los Angeles, CA 90025                                                                                     
Jonathan D. Sokoloff(c)...............   8,880,000       32.5       3,605,635       5,274,365         16.8  
  c/o Leonard Green & Partners, L.P.                                                                        
  11111 Santa Monica Blvd., Suite 2000                                                                      
  Los Angeles, CA 90025                                                                                     
Brian Blechman........................   1,659,246        6.1               0       1,659,246          5.3  
  c/o Twin Laboratories Inc.                                                                                
  2120 Smithtown Avenue                                                                                     
  Ronkonkoma, NY 11779                                                                                      
Dean Blechman.........................   1,660,080        6.1               0       1,660,080          5.3  
  c/o Twin Laboratories Inc.                                                                                
  2120 Smithtown Avenue                                                                                     
  Ronkonkoma, NY 11779                                                                                      
Neil Blechman.........................   1,660,497        6.1               0       1,660,497          5.3  
  c/o Twin Laboratories Inc.                                                                                
  2120 Smithtown Avenue                                                                                     
  Ronkonkoma, NY 11779                                                                                      
Ross Blechman.........................   1,660,497        6.1               0       1,660,497          5.3  
  c/o Twin Laboratories Inc.                                                                                
  2120 Smithtown Avenue                                                                                     
  Ronkonkoma, NY 11779                                                                                      
Steve Blechman........................   1,660,080        6.1               0       1,660,080          5.3  
  c/o Twin Laboratories Inc.                                                                                
  2120 Smithtown Avenue                                                                                     
  Ronkonkoma, NY 11779                                                                                      
John McCusker.........................           0          0               0               0            0  
  c/o Twin Laboratories Inc.                                                                                
  2120 Smithtown Avenue                                                                                     
  Ronkonkoma, NY 11779                                                                                      
Stephen L. Welling....................      28,770          *               0          28,770            *  
  c/o Twin Laboratories Inc.                                                                                
  2120 Smithtown Avenue                                                                                     
  Ronkonkoma, NY 11779                                                                                      

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                                                        [Enlarge/Download Table]

                                         COMMON STOCK OWNED                          COMMON STOCK OWNED    
                                       BEFORE THE OFFERING(a)                     After the Offering(a)(b) 
                                       -----------------------  NUMBER OF SHARES  -------------------------
                                         NUMBER        PERCENT   BEING OFFERED      NUMBER         PERCENT 
                                       ----------      -------  ----------------  -----------      --------
                                                                                                           
Chase Equity Associates, L.P. ........    323,750        1.2         131,455         192,295            *  
  380 Madison Avenue                                                                                       
  New York, NY 10017                                                                                       
DLJ Investment Partners, L.P..........    261,609          *         106,223         155,386            *  
  277 Park Avenue                                                                                          
  New York, NY 10172                                                                                       
DLJ Investment Funding, Inc. .........     37,277          *          15,136          22,141            *  
  277 Park Avenue                                                                                          
  New York, NY 10172                                                                                       
DLJ First ESC L.P. ...................     24,864          *          10,096          14,768            *  
  277 Park Avenue                                                                                          
  New York, NY 10172                                                                                       
PMI Mezzanine Fund L.P. ..............    323,750        1.2         131,455         192,295            *  
  610 Newport Center Drive                                                                                 
  Suite 1100                                                                                               
  Newport Beach, CA 92660                                                                                  
All directors and executive officers   17,209,170       63.0       3,605,635      13,603,535         43.4% 
  as a group (10 persons)(d)..........                                                                     

---------------                                                                 
(a) Does not include an aggregate of 390,600 shares of Common Stock issuable  
     upon exercise of outstanding stock options with a weighted average exercise
price of $23.27 per share.                                            

(b) Assumes no exercise of the Underwriters' over-allotment option. If the    
Underwriters exercise their over-allotment option in full, GEI, Chase 
Equity Associates, L.P., DLJ Investment Partners, L.P., DLJ Investment
   Funding, Inc., DLJ First ESC L.P., and PMI Mezzanine Fund L.P. would sell
    an additional 394,366, 192,295, 155,386, 22,141, 14,768 and 192,295 shares
  of Common Stock, respectively, and would beneficially own 15.5%, 0%, 0%,
     0%, 0% and 0% of the outstanding shares of Common Stock after the Offering.

(c) The shares shown as beneficially owned by Messrs. Danhakl and Sokoloff and
     Ms. Holden Dunbar represent 8,880,000 shares owned of record by GEI. GEI is
     a Delaware limited partnership managed by LGP, which is an affiliate of the
 general partner of GEI. Each of Leonard I. Green, Jonathan D. Sokoloff,
John G. Danhakl, Peter J. Nolan, Gregory J. Annick and Jennifer Holden
     Dunbar, either directly (whether through ownership interest or position) or
   through one or more intermediaries, may be deemed to control LGP and such
    general partner. LGP and such general partner may be deemed to control the
  voting and disposition of the shares of Common Stock of Twinlab owned by
 GEI. As such, Messrs. Sokoloff and Danhakl and Ms. Holden Dunbar may be
deemed to have shared voting and investment power with respect to all 
     shares held by GEI. However, such individuals disclaim beneficial ownership
of the securities held by GEI except to the extent of their respective
pecuniary interests therein.                                          

(d) Includes the shares referred to in Note (c) above.                        

* Less than 1%.                                                           

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TERMS OF THE STOCKHOLDERS AGREEMENT                                             

  Upon consummation of the Acquisition, GEI, the Senior Executive Officers
and Twinlab entered into a Stockholders Agreement (the "Stockholders Agreement")
in respect of their holdings of shares of Common Stock of Twinlab. Pursuant to  
the Stockholders Agreement, each of GEI and the Senior Executive Officers was   
granted certain demand registration rights. The Stockholders Agreement also     
contains certain "piggyback" registration rights arising in the event that      
Twinlab registers its securities under the Securities Act. The Stockholders     
Agreement terminates on the tenth anniversary of the date thereof.              

     Shares of Common Stock and Senior Preferred Stock of Twinlab were issued to
various institutional investors (the "Institutional Investors") pursuant to a   
Stock Subscription Agreement among each such investor and Twinlab. Upon         
consummation of the Acquisition, GEI, the Senior Executive Officers, the        
Institutional Investors and Twinlab entered into a secondary stockholders       
agreement (the "Secondary Stockholders Agreement") in respect of their holdings 
of shares of capital stock of Twinlab. Commencing on the fifth anniversary of   
the Secondary Stockholders Agreement, the Institutional Investors will be       
entitled to exercise one demand registration right with respect to their shares 
of Common Stock of Twinlab. Finally, the Institutional Investors will have      
certain "piggyback" registration rights on other registrations of equity        
securities of the Company. The Secondary Stockholders Agreement terminates on   
the tenth anniversary of the date thereof.                                      

DESCRIPTION OF CERTAIN INDEBTEDNESS 

THE AMENDED AND RESTATED REVOLVING CREDIT FACILITY                              

In November 1996, Twinlab and Twin entered into the Revolving Credit  
Facility agented by The Chase Manhattan Bank and co-agented by Bank of New York.
The Revolving Credit Facility provides for a revolving credit facility for Twin 
of $50.0 million expiring on May 7, 2002. The Revolving Credit Facility bears   
interest at an annual rate, at the option of Twin equal to the ABR plus the     
Applicable Margin ("ABR Loans") or the Eurodollar Rate plus Applicable Margin   
("Eurodollar Loans"). With respect to the Revolving Credit Facility, "Applicable
Margin" means (a) 0%, in the case of ABR Loans and (b) 1.25%, in the case of    
Eurodollar Loans. Interest rates on the Revolving Credit Facility are subject to
increase or reduction based on Twin's meeting certain financial tests.          
Outstanding borrowings under the Revolving Credit Facility currently bear       
interest at a rate of 6.875% per annum.                                         

     The proceeds of the Revolving Credit Facility are available for the working
capital requirements of Twin and its subsidiaries and for general corporate     
purposes, including up to $35.0 million to fund permitted acquisitions (as      
defined), subject in each case to certain conditions and reductions set forth in
the Revolving Credit Facility. As of December 31, 1997, approximately $36.3     
million of borrowings were available under the Revolving Credit Facility for    
working capital requirements and general corporate purposes of which            
approximately $21.3 million was available for acquisitions. See "Use of         
Proceeds." A portion of the Revolving Credit Facility not to exceed $15.0       
million is available for the issuance of letters of credit which generally will 
have an initial term of one year or less.                                       

The Revolving Credit Facility is secured by first priority security   
interests in all of the tangible and intangible assets of the Company. In       
addition, the loans under the Revolving Credit Facility are guaranteed by       
Twinlab, ARP, Changes International and certain of Twin's future subsidiaries.  
Additionally, Twin is required to apply various percentages of the net proceeds 
of (i) certain issuances or sales of equity by Twinlab (provided that in the    
case of a public offering by Twinlab of its capital stock, the net proceeds     
thereof may be used, at the discretion of Twinlab and Twin, including without   
limitation, to redeem or retire the Notes and/or to reduce the Revolving Credit 
Facility), (ii) the incurrence of certain indebtedness by Twinlab or its direct 
or indirect subsidiaries, or (iii) any disposition of any material assets (other
than inventory in the ordinary course of business), to the repayment of the     
Revolving Credit Facility.                                                      

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The Revolving Credit Facility contains certain financial and operating
covenants, including a maximum leverage ratio and a minimum interest coverage   
ratio. In addition, Twin and its subsidiaries are limited in the amount of      
annual capital expenditures and capital lease obligations they may incur.       

The operating covenants of the Revolving Credit Facility include      
limitations on the ability of the Company to (i) incur additional indebtedness, 
other than certain permitted indebtedness, (ii) permit additional liens or      
encumbrances, other than certain permitted liens, (iii) make any investment in  
other persons, other than certain permitted investments; (iv) become obligated  
with respect to contingent obligations, other than certain permitted contingent 
obligations, and (v) make restricted junior payments (including dividends on its
common stock). The operating covenants also include restrictions on certain     
specified fundamental changes, such as mergers and asset sales, transactions    
with shareholders and affiliates, and business outside the ordinary course as   
currently conducted, amendments or waivers of certain specified agreements, and 
the issuance of preferred stock, guarantees or other credit enhancements.       

DESCRIPTION OF NOTES                                                            

     The 10 1/4% Senior Subordinated Notes due 2006 (the "Notes") were issued in
a transaction (the "Notes Offering") pursuant to which Twin issued an aggregate 
of $100,000,000 principal amount of the Notes to Donaldson, Lufkin & Jenrette   
Securities Corporation ("DLJ") and Chase Securities Inc. ("Chase", and together 
with DLJ, the "Initial Notes Purchasers") on May 7, 1996 (the "Note Offering    
Closing Date"). The Initial Notes Purchasers subsequently resold the Notes in   
reliance on Rule 144A and certain other exemptions under the Securities Act. The
Company and the Initial Notes Purchasers also entered into a Registration Rights
Agreement, pursuant to which the Company granted certain registration rights for
the benefit of the holders of the Notes. On October 28, 1996, the Company       
consummated a fully-subscribed registered exchange offer under the Securities   
Act for the Notes (the "Exchange Offer") to satisfy certain of the Company's    
obligations under the Registration Rights Agreement with respect to the Notes.  
The form and terms of the notes issued under the Exchange Offer are identical in
all material respects to the form and terms of the Notes.                       

 The Notes were issued under an indenture, dated as of the Note Offering
Closing Date (the "Indenture"), among Twinlab, Twin, ARP and Fleet National Bank
as trustee. The Indenture was supplemented as of December 1, 1997 to add Changes
International as a Guarantor (as hereinafter defined) thereunder. The Notes are 
not redeemable, in whole or in part, prior to May 15, 2001. Thereafter, the     
Notes are redeemable at the redemption prices set forth in the Indenture, plus  
interest accrued thereon to the redemption date. Notwithstanding the foregoing, 
at any time on or before May 15, 1999, Twin may redeem up to 35% of the original
aggregate principal amount of the Notes, in whole or in part, with the net      
proceeds of one or more Equity Offerings (as defined therein) at a redemption   
price equal to 109 1/2% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of redemption. Upon the occurrence of a Change of 
Control (as defined therein), Twin will be required to make an offer to         
repurchase all outstanding Notes at 101% of the aggregate principal amount      
thereof, plus accrued and unpaid interest, if any, to the date of repurchase.   

   The Notes are general unsecured obligations of Twin subordinated in right
of payment to all existing and future Senior Debt (as defined therein) of Twin, 
including borrowings under the Revolving Credit Facility. The payment of the    
principal, premium, if any, and interest on the Notes are guaranteed (the       
"Guarantees") by Twinlab, ARP and Changes International (the "Guarantors"). The 
Guarantees are subordinated in right of payment to all existing and future      
Senior Debt of the Guarantors. See "Management's Discussion and Analysis of     
Financial Condition and Results of Operations -- Liquidity and Capital          
Resources." The Indenture permits the Company to incur additional indebtedness, 
including additional Senior Debt. The Indenture contains certain covenants with 
respect to Twin and the Subsidiary Guarantors (as defined therein) that limit   
the ability of Twin and the Subsidiary Guarantors to, among other things, (i)   
incur additional Indebtedness (as defined therein) and issue certain preferred  
stock, (ii) pay dividends or make other distributions, (iii) layer Indebtedness,
(iv) create certain liens, (v) sell certain assets, (vi) enter into certain     
transactions with affiliates, or (vii) enter into certain mergers or            
consolidations involving Twin.                                                  

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DESCRIPTION OF CAPITAL STOCK

The Company is authorized by its Certificate of Incorporation to issue
75,000,000 shares of Common Stock, $1.00 par value per share, of which          
31,321,900 shares will be outstanding upon completion of the Offering, and      
2,000,000 shares of preferred stock, $.01 par value per share, none of which    
shares will be outstanding upon consummation of the Offering. The Board of      
Directors of the Company has approved, subject to approval at the Company's 1998
annual meeting of stockholders, a new stock option plan providing for the       
issuance of options to purchase up to 1,000,000 shares of Common Stock.         

The following summary description of the capital stock of Twinlab is  
qualified in its entirety by reference to the Certificate of Incorporation and  
the By-laws, which are incorporated by reference herein.                        

COMMON STOCK                                                                    

 Holders of shares of Common Stock vote as a single class on all matters
submitted to a vote of the stockholders, including the election of directors,   
with each share of Common Stock entitled to one vote. There is no cumulative    
voting with respect to the election of directors, with the result that holders  
of more than 50% of the shares voting for the election of directors can elect   
all of the directors. Upon completion of the Offering, GEI will own 16.8% and   
the Senior Executive Officers of the Company will own 26.6% of the Common Stock 
of Twinlab.                                                                     

     Holders of Common Stock on the applicable record date are entitled to share
ratably in such dividends, if any, as may be declared from time to time by the  
Board of Directors out of funds legally available therefor, subject to the      
rights of the holders of any series of preferred stock. See "Dividend Policy."  
Upon the liquidation, dissolution or winding up of the Company, each holder of  
Common Stock will be entitled to share ratably in any distribution of the       
Company's assets after the payment of all debts and other liabilities, subject  
to any superior rights of the holders of any outstanding shares of preferred    
stock.                                                                          

Holders of the shares of Common Stock have no preemptive or other     
subscription rights and there are no conversion rights or redemption or sinking 
fund provisions with respect to such shares. All of the outstanding shares of   
Common Stock are, and the shares of Common Stock offered hereby will be when    
issued, fully paid and non-assessable.                                          

  Special meetings of stockholders may be called by the Company's Board of
Directors, the Chairman of the Board of Directors, the President or the holders 
of twenty-five (25%) of the then outstanding Common Stock.                      

Stockholders of the Company are required to provide advance notice of 
nominations of directors to be made at, and of business proposed to be brought  
before, a meeting of stockholders. The failure to deliver proper notice within  
the period specified in the Company's By-laws will result in the denial to the  
stockholder of the right to make such nominations or propose such action at the 
meeting.                                                                        

PREFERRED STOCK                                                                 

The Company's Board of Directors has authority (without action by the 
stockholders) to issue authorized and unissued shares of preferred stock in one 
or more series, to designate the number of shares constituting any series, and  
to fix, by resolution, the voting powers, designations, preferences and         
relative, optional or other special rights thereof, including liquidation       
preferences and the dividend, conversion and redemption rights of each such     
series. Under certain circumstances, the Company could issue the preferred stock
as a method of discouraging, delaying or preventing a change of control of the  
Company.                                                                        

CERTAIN PROVISIONS OF THE DELAWARE GENERAL CORPORATION LAW ("DGCL")             

     Section 228 of the DGCL allows any action which is required to be or may be
taken at a special or annual meeting of the stockholders of a corporation to be 
taken without a meeting with the written consent of holders of outstanding stock
having not less than the minimum number of votes that would be necessary to     
authorize or take such action at a meeting at which all shares entitled to vote 
thereon were present and voted, provided that the certificate of incorporation  
of such corporation does not contain a provision to the contrary. The           
Certificate of Incorporation contains no such provision, and therefore, pursuant
to Section 228 and the By-laws, stockholders holding a majority of the voting   
power of the Common Stock will be able to effect most                           

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corporate matters requiring stockholder approval by written consent, without the
need for a duly-noticed and duly-held meeting of stockholders. See "Risk        
Factors -- Control by Principal Stockholders."                                  

TRANSFER AGENT AND REGISTRAR                                                    

The Transfer Agent and Registrar for the Common Stock is American     
Securities Transfer & Trust, Inc. American Securities Transfer & Trust, Inc. is 
located at 1825 Lawrence Street, Suite 444, Denver, Colorado 80202-1817, and its
telephone number is (303) 298-5370.                                             

SHARES ELIGIBLE FOR FUTURE SALE 

 Upon completion of the Offering, Twinlab will have 31,321,900 shares of
Common Stock outstanding, of which 16,833,150 shares will be freely tradeable   
without restriction or further registration under the Securities Act, except    
that any shares held by "affiliates" of the Company, as that term is defined    
under the Securities Act ("Affiliates"), may generally only be sold in          
compliance with the limitations of Rule 144 described below.                    

   The remaining 14,488,750 shares of Common Stock (the "Restricted Shares")
constitute restricted securities under Rule 144 and were issued by the Company  
in private transactions in reliance upon one or more exemptions under the       
Securities Act. Such restricted securities may be resold in a public            
distribution only if registered under the Securities Act or pursuant to an      
exemption therefrom, including Rule 144. The Senior Executive Officers and the  
Selling Stockholders, who collectively are the beneficial owners of an aggregate
of 18,180,420 shares of Common Stock (14,180,420 shares after the consummation  
of the Offering), and the Company have agreed with the Underwriters, subject to 
certain exceptions, not to directly or indirectly offer, sell, contract to sell,
grant any option to purchase or otherwise dispose of, without the prior written 
consent of Bear Stearns, any Common Stock or any securities convertible into or 
exchangeable or exercisable for, or warrants, options or rights to purchase or  
acquire Common Stock or in any other manner transfer all or a portion of the    
economic consequences associated with the ownership of any Common Stock, or     
enter into any agreement to do any of the foregoing, for a period of 90 days    
after the date of this Prospectus (the "Lock-Up Period"), except (i) offers to  
sell and sales to the Underwriters pursuant to the Offering and (ii) the        
issuance of shares of Common Stock pursuant to employee benefit arrangements of 
the Company. Upon the expiration of such 90 day period, such holders will in    
general be entitled to dispose of their shares of Common Stock, although the    
shares of Common Stock held by affiliates of the Company will continue to be    
subject to the restrictions of Rule 144 under the Securities Act.               

    In general, under Rule 144 of the Securities Act as currently in effect, a
person (or persons whose shares are aggregated) who has beneficially owned      
Restricted Shares for at least one year, including a person who may be deemed an
Affiliate of the Company, is entitled to sell within any three-month period a   
number of shares of Common Stock that does not exceed the greater of 1% of the  
then outstanding shares of Common Stock or the average weekly trading volume in 
the Common Stock during the four calendar weeks preceding the date on which     
notice of such sale is filed pursuant to Rule 144. Sales under Rule 144 are     
subject to certain restrictions relating to manner of sale, notice and the      
availability of current public information about the Company. In addition, under
Rule 144(k), a person who is not an Affiliate of the Company at any time 90 days
preceding a sale, and who has beneficially owned shares for at least two years, 
would be entitled to sell such shares immediately following the Offering without
regard to the volume limitations, manner of sale provisions or notice or other  
requirements of Rule 144.                                                       

   Upon completion of the Offering, 13,570,595 of the Restricted Shares will
be owned by GEI and the Blechman Brothers. The Company has granted the Senior   
Executive Officers and the Selling Stockholders certain demand and piggyback    
registration rights covering an aggregate of 18,176,250 shares of Common Stock  
(14,176,250 shares after the consummation of the Offering). When and as these   
rights are exercised, additional shares will become available for sale upon the 
effectiveness of a registration statement filed pursuant to exercise of such    
rights. See "Principal and Selling Stockholders -- Terms of the Stockholders    
Agreement."                                                                     

Any sale of substantial amounts of Common Stock in the open market may
adversely affect the market price of the Common Stock offered hereby.           

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CERTAIN UNITED STATES FEDERAL TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

The following is a general discussion of certain United States federal
income and estate tax consequences of the acquisition, ownership and disposition
of the Common Stock by a "Non-United States Holder." For the purpose of this    
summary, a "Non-United States Holder" is any person or entity that is not (a) a 
citizen or resident of the United States, (b) a corporation or partnership      
created or organized in or under the laws of the United States or of any        
political subdivision thereof, (c) an estate that is subject to United States   
federal taxation on its income regardless of its source or (d) a trust if a     
court within the United States is able to exercise primary supervision over its 
administration and one or more United States persons have the authority to      
control all substantial decisions of the trust. An individual may be deemed to  
be a resident of the United States for federal income tax purposes in several   
circumstances, including being present in the United States on at least 31 days 
in the calendar year and for an aggregate of 183 days during the three-year     
period ending with the current calendar year. For purposes of this              
determination, all of the days present in the United States during the current  
year, one-third of the days present during the immediately preceding year and   
one-sixth of the days present during the second preceding year are taken into   
account. Resident aliens are subject to U.S. federal income tax as if they were 
U.S. citizens and residents.                                                    

     This summary does not deal with all aspects of United States federal income
and estate taxation that may be relevant to Non-United States Holders in light  
of their personal circumstances and does not address tax consequences under the 
laws of any state, municipality, or other taxing jurisdiction or under the laws 
of any country other than the United States. Furthermore, this summary is based 
on current provisions of the Internal Revenue Code of 1986, as amended (the     
"Code"), existing, temporary and proposed regulations promulgated thereunder and
administrative and judicial interpretations, all of which are subject to change,
possibly with retroactive effect. Prospective Non-United States Holders are     
urged to consult their tax advisors regarding the United States federal, state, 
local and foreign income and other tax consequences of acquiring, owning and    
disposing of the Common Stock.                                                  

DIVIDENDS                                                                       

 The Company does not expect to pay dividends on its Common Stock in the
foreseeable future. See "Dividend Policy." Generally, any dividends paid with   
respect to the Common Stock to a Non-United States Holder will be subject to    
withholding of United States federal income tax at a 30% tax rate (or such lower
tax rate as may be specified by an applicable income tax treaty). Dividends     
received by a Non-United States Holder that are effectively connected with a    
United States trade or business conducted by such Non-United States Holder (and 
attributable to a U.S. permanent establishment of the Non-United States Holder, 
if any income tax treaty applies) are exempt from such withholding tax. However,
such effectively connected dividends, net of certain deductions and credits, are
taxed at the same graduated rates applicable to United States persons.          
Effectively connected dividends received by a corporate Non-United States Holder
may be subject to an additional "branch profits tax" at a 30% tax rate (or such 
lower rate as may be specified by an applicable income tax treaty). A Non-United
States Holder may claim exemption from withholding under the effectively        
connected income exception by filing Form 4224 (Statement Claiming Exemption    
from Withholding of Tax on Income Effectively Connected with the Conduct of     
Business in the United States) with the Company or its paying agent.            

Under current United States Treasury regulations, dividends paid to an
address in a foreign country are presumed to be paid to a resident of such      
country for purposes of the withholding discussed above (unless the payor has   
knowledge to the contrary) and, under the current interpretation of United      
States Treasury regulations, for purposes of determining the applicability of a 
tax treaty rate. Recently finalized Treasury regulations generally effective for
payments made after December 31, 1998 (the "Withholding Regulations"), however, 
will require Non-United States Holders to file certain new forms to obtain the  
benefit of any applicable tax treaty providing for a lower rate of withholding  
tax on dividends. Such forms will be required to contain the holder's name,     
address and certain other information.                                          

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DISPOSITION OF COMMON STOCK                                                     

   A Non-United States Holder generally will not be subject to United States
federal income tax on any gain recognized upon the sale or other disposition of 
Common Stock unless (i) such gain is effectively connected with a United States 
trade or business of the Non-United States Holder (and, if the applicable treaty
so provides, is attributable to such holder's office or other fixed place of    
business within the United States), (ii) in the case of a Non-United States     
Holder who is a non-resident alien individual and holds the Common Stock as a   
capital asset, such holder is present in the United States for 183 or more days 
in the taxable year of disposition and either (a) has a "tax home" in the United
States for United States federal income tax purposes or (b) has an office or    
other fixed place of business in the United States to which the gain is         
attributable and no treaty exemption applies, (iii) the Non-United States Holder
is subject to tax pursuant to the provisions of United States federal income tax
laws applicable to certain expatriates or (iv) the Company is or has been a     
"United States real property holding corporation" ("USRPHC") at any time within 
the shorter of the five-year period preceding such disposition or such          
Non-United States Holder's holding period and, provided that the Common Stock   
continues to be "regularly traded on an established securities market" for tax  
purposes, the Non-United States Holder held, directly or indirectly, at any time
during the five-year period ending on the date of disposition, more than 5% of  
the outstanding Common Stock. The Company has determined that it has not been   
and is not currently and does not believe that it will become a USRPHC for      
federal income tax purposes. If a Non-United States Holder falls under clause   
(i) above, the holder will be subject to United States federal income tax on the
same basis as United States persons generally (and, with respect to corporate   
Non-United States Holders, may also be subject to the branch profits tax        
described above). If an individual Non-United States Holder falls under clause  
(ii) above, the holder generally will be subject to a 30% tax on the gain       
derived from the sale, which gain may be offset by U.S. capital losses          
recognized within the same taxable year of such sale or disposition.            

BACKUP WITHHOLDING AND INFORMATION REPORTING                                    

     In the event the Company decides, contrary to its present intention, to pay
dividends with respect to its Common Stock, the Company must report to the IRS  
the amount of dividends paid, the name and address of the recipient and the     
amount, if any, of tax withheld. A similar report will be sent to the Non-United
States Holder. See "Dividend Policy." Pursuant to tax treaties or other         
agreements, the IRS may make such reports available to tax authorities in the   
recipient's country of residence.                                               

Dividends paid to a Non-United States Holder at an address within the 
United States may be subject to backup withholding at a rate of 31% if the      
Non-United States Holder fails to establish that it is entitled to an exemption 
or to provide a correct taxpayer identification number and other information to 
the payor.                                                                      

The payment of the proceeds of the disposition of Common Stock by or  
through the United States office of a broker is subject to information reporting
and backup withholding at a rate of 31% unless the holder certifies its name,   
address and non-United States status under penalties of perjury or otherwise    
establishes an exemption. Information reporting requirements (but not backup    
withholding) will apply to a payment of disposition proceeds by or through a    
foreign office of (a) a United States broker, (b) a foreign broker that is a    
"controlled foreign corporation" for United States federal income tax purposes  
or (c) a foreign broker 50% or more of whose gross income for certain periods is
effectively connected with the conduct of a United States trade or business,    
unless, in each case, such broker has documentary evidence in its files of the  
owner's foreign status and has no actual knowledge to the contrary. Generally,  
United States information reporting and backup withholding will not apply to a  
payment of disposition proceeds if the payment is made outside the United States
by or through a foreign office of a non-U.S. broker.                            

    The Withholding Regulations will affect the procedures to be followed by a
Non-United States Holder in establishing such holder's status as a Non-United   
States Holder for purposes of the withholding, backup withholding and           
information reporting rules discussed herein. Among other things, the           
Withholding Regulations will provide certain presumptions under which a         
Non-United States Holder would be subject to backup withholding in the absence  
of certification from the holder as to non-U.S. status. Prospective investors   
should                                                                          

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consult their tax advisors concerning the effect of the Withholding Regulations 
on an investment in Common Stock.                                               

    Backup withholding is not an additional tax. Rather, the United States tax
liability of persons subject to backup withholding will be reduced by the amount
of tax withheld. If withholding results in an overpayment of taxes, a refund may
be obtained, provided that the required information is furnished to the IRS.    

FEDERAL ESTATE TAXES                                                            

Common Stock owned or treated as owned by an individual who is not a  
citizen or resident of the United States (as specially defined for United States
federal estate tax purposes) at the time of death will be subject to United     
States federal estate tax unless an applicable estate tax treaty provides       
otherwise. Estates of non-resident aliens are generally allowed a statutory     
credit which is the equivalent of an exclusion of $60,000 of assets from the    
U.S. estate tax. Tax treaties may permit a larger credit.                       

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UNDERWRITING

     The underwriters of the Offering named below (the "Underwriters"), for whom
Bear, Stearns & Co. Inc., Donaldson, Lufkin & Jenrette Securities Corporation,  
Adams, Harkness & Hill, Inc., Lehman Brothers Inc. and Smith Barney Inc. are    
acting as representatives, have severally agreed with the Company and the       
Selling Stockholders, subject to the terms and conditions of the Underwriting   
Agreement (the form of which has been filed as an exhibit to the Registration   
Statement on Form S-3 of which this Prospectus is a part), to purchase from the 
Company and the Selling Stockholders the aggregate number of Shares set forth   
opposite their respective names below.                                          

                                                                [Download Table]

                                                              NUMBER OF
                    NAME OF UNDERWRITER                        SHARES  
                    -------------------                       ---------
                                                                       
Bear, Stearns & Co. Inc. ...................................  1,496,000
Donaldson, Lufkin & Jenrette Securities Corporation.........  1,496,000
Adams, Harkness & Hill, Inc. ...............................    816,000
Lehman Brothers Inc. .......................................    816,000
Smith Barney Inc. ..........................................    816,000
BT Alex. Brown Incorporated.................................    160,000
Chase Securities Inc. ......................................    160,000
Cowen & Company.............................................    160,000
Credit Suisse First Boston Corporation......................    160,000
Dresdner Kleinwort Benson North America LLC.................    160,000
Furman Selz LLC.............................................    160,000
Hambrecht & Quist LLC.......................................    160,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated..........    160,000
Morgan Stanley & Co. Incorporated...........................    160,000
NationsBanc Montgomery Securities LLC.......................    160,000
PaineWebber Incorporated....................................    160,000
Commonwealth Associates.....................................     80,000
Gabelli & Company, Inc. ....................................     80,000
Gaines, Berland Inc. .......................................     80,000
Hanifen, Imhoff Inc. .......................................     80,000
HSBC Securities, Inc. ......................................     80,000
J.W. Charles Securities, Inc. ..............................     80,000
Parker/Hunter Incorporated..................................     80,000
Piper Jaffray Inc. .........................................     80,000
Raymond James & Associates, Inc. ...........................     80,000
Tucker Anthony Incorporated.................................     80,000
                                                              ---------
          Total.............................................  8,000,000
                                                              =========

   The nature of the respective obligations of the Underwriters is such that
all of the shares of Common Stock (other than those covered by the              
over-allotment option) must be purchased if any are purchased. Those obligations
are subject, however, to various conditions, including the approval of certain  
matters by counsel. The Company and the Selling Stockholders have agreed to     
indemnify the Underwriters against certain liabilities, including liabilities   
under the Securities Act, and, where such indemnification is unavailable, to    
contribute to payments that the Underwriters may be required to make in respect 
of such liabilities.                                                            

The Company and the Selling Stockholders have been advised that the   
Underwriters propose to offer the shares of Common Stock, initially at the      
public offering price set forth on the cover page of this Prospectus and to     
certain selected dealers at such price less a concession not to exceed $0.88 per
share; that the Underwriters may allow, and such selected dealers may reallow, a
concession to certain other dealers not to                                      

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exceed $0.10 per share; and that after the commencement of the Offering, the    
public offering price and the concessions may be changed.                       

   The Company and the Selling Stockholders have granted the Underwriters an
option to purchase in the aggregate up to 1,200,000 additional shares of Common 
Stock solely to cover over-allotments, if any. The option may be exercised in   
whole or in part at any time within 30 days after the date of this Prospectus.  
To the extent the option is exercised, the Underwriters will be severally       
committed, subject to certain conditions, to purchase the additional shares of  
Common Stock in proportion to their respective commitments as indicated in the  
preceding tables.                                                               

No action has been taken in any jurisdiction by the Company or the    
Underwriters that would permit a public offering of the Common Stock offered    
pursuant to the Offering in any jurisdiction where action for that purpose is   
required, other than the United States. The distribution of this Prospectus and 
the offering or sale of the shares of Common Stock offered hereby in certain    
jurisdictions may be restricted by law. Accordingly, the shares of Common Stock 
offered hereby may not be offered or sold, directly or in directly, and neither 
this Prospectus nor any other offering material or advertisements in connection 
with the Common Stock may be distributed or published, in or from any           
jurisdiction, except under circumstances that will result in compliance with    
applicable rules and regulations of any such jurisdiction. Such restrictions may
be set out in applicable Prospectus supplements. Persons into whose possession  
this Prospectus comes are required by the Company and the Underwriters to inform
themselves about and to observe any applicable restrictions. This Prospectus    
does not constitute an offer of, or an invitation to subscribe for purchase of, 
any shares of Common Stock and may not be used for the purpose of an offer to,  
or solicitation by, anyone in any jurisdiction or in any circumstances in which 
such offer or solicitation is not authorized or is unlawful.                    

The Senior Executive Officers and the Selling Stockholders, who       
collectively are the beneficial owners of an aggregate of 18,180,420 shares of  
Common Stock (14,180,420 shares after consummation of the Offering), and the    
Company, have agreed with the Underwriters, subject to certain exceptions, not  
to, directly or indirectly, offer, sell, contract to sell, grant any option to  
purchase or otherwise dispose of, without the prior written consent of Bear     
Stearns, any shares of Common Stock or any securities convertible into or       
exercisable or exchangeable for, or warrants, options or rights to purchase or  
acquire, Common Stock or in any other manner transfer all or a portion of the   
economic consequences associated with the ownership of any Common Stock, or     
enter into any agreement to do any of the foregoing, for a period of 90 days    
after the date of this Prospectus. See "Shares Eligible for Future Sale."       

   In order to facilitate the Offering, certain persons participating in the
Offering may engage in transactions that stabilize, maintain or otherwise affect
the price of the Common Stock during and after the Offering. Specifically, the  
Underwriters may over-allot or otherwise create a short position in the Common  
Stock for their own account by selling more shares of Common Stock than have    
been sold to them by the Company. The Underwriters may elect to cover any such  
short position by purchasing shares of Common Stock in the open market or by    
exercising the over-allotment options granted to the Underwriters. In addition, 
such persons may stabilize or maintain the price of the Common Stock by bidding 
for or purchasing shares of Common Stock in the open market and may impose      
penalty bids, under which selling concessions allowed to syndicate members or   
other broker-dealers participating in the Offering are reclaimed if shares      
previously distributed in the Offering are repurchased in connection with       
stabilization transactions or otherwise. The effect of these transactions may be
to stabilize or maintain the market price of the Common Stock at a level above  
that which might otherwise prevail in the open market. The imposition of a      
penalty bid may also affect the price of the Common Stock to the extent that it 
discourages resales thereof. No representation is made as to the magnitude or   
effect of any such stabilization or other transactions. Such transactions, if   
commenced, may be discontinued at any time.                                     

    Certain persons participating in the Offering may engage in passive market
making transactions in the Common Stock on the Nasdaq National Market in        
accordance with Rule 103 of Regulation M under the 1934 Act. Rule 103 permits,  
upon the satisfaction of certain conditions, underwriting and selling group     
members participating in a distribution that are also registered Nasdaq market  
makers in the security being distributed (or a related security) to engage in   
limited passive market making transactions during the period when               

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Regulation M would otherwise prohibit such activity. In general, a passive      
market maker may not bid for or purchase a security at a price that exceeds the 
highest independent bid for those securities by a person that is not            
participating in the distribution and must identify its passive market making   
bids on the Nasdaq electronic inter-dealer reporting system. In addition, the   
net daily purchases made by a passive market maker generally may not exceed 30% 
of such market maker's average daily trading volume in the security for the two 
full consecutive calendar months (or any 60 consecutive days ending within 10   
days) immediately preceding the date of filing of the Registration Statement of 
which this Prospectus forms a part.                                             

Certain of the Underwriters have in the past provided, and may in the 
future provide, investment banking services for the Company. In particular, Bear
Stearns, DLJ and Adams, Harkness & Hill, Inc. and certain of their respective   
affiliates served as underwriters for the Company's initial public offering in  
November 1996. In addition, in May 1996 DLJ and Chase acted as initial          
purchasers of Twin's 10 1/4% Senior Subordinated Notes due 2006.                

   DLJ Investment Partners, L.P., DLJ Investment Funding, Inc. and DLJ First
ESC L.P. (collectively, the "DLJ Affiliates"), each of which is an affiliate of 
DLJ, are collectively the owners of 323,750 shares of Common Stock and are      
Selling Stockholders in the Offering. The DLJ Affiliates are selling 131,455    
shares in the Offering and as a result will receive approximately $4.6 million  
of the net proceeds of the Offering. In addition, Bear Stearns and DLJ each have
in the past provided, and may in the future provide, investment banking services
for GEI and its affiliates. Affiliates of Bear Stearns and DLJ each own         
approximately 1.6% of the limited partnership interests in GEI.                 

   Chase Equity Associates, L.P. ("Chase Equity"), an affiliate of Chase, is
the owner of 323,750 shares of Common Stock and is a Selling Stockholder in the 
Offering. Chase Equity is selling 131,455 shares in the Offering and as a result
will receive approximately $4.6 million of the net proceeds of the Offering. In 
addition, The Chase Manhattan Bank, an affiliate of Chase, is the agent and a   
lender under the Revolving Credit Facility. As a result of the reduction of     
outstanding borrowings under the Revolving Credit Facility with a portion of the
net proceeds of the Offering, The Chase Manhattan Bank will receive             
approximately $1.6 million of the net proceeds of the Offering.                 

LEGAL MATTERS 

The validity of the shares offered hereby will be passed upon for the 
Company by Kramer, Levin, Naftalis & Frankel, New York, New York. Certain legal 
matters will be passed upon for the Underwriters by Skadden, Arps, Slate,       
Meagher & Flom LLP, New York, New York.                                         

EXPERTS 

  The consolidated financial statements of Twinlab as of December 31, 1996
and 1997 and for each of the three years in the period ended December 31, 1997  
included in this Prospectus and the related financial statement schedule        
included elsewhere in the Registration Statement, have been audited by Deloitte 
& Touche LLP, independent auditors, as stated in their reports appearing herein 
and elsewhere in the Registration Statement and have been so included in        
reliance upon the reports of such firm given upon their authority as experts in 
accounting and auditing.                                                        

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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                [Download Table]

                                                              PAGE
                                                              ----
                                                                  
Independent Auditors' Report................................  F-2 
Financial Statements                                              
  Consolidated Balance Sheets as of December 31, 1996 and         
     1997...................................................  F-3 
  Consolidated Statements of Income for the Years Ended           
     December 31, 1995, 1996 and 1997.......................  F-4 
  Consolidated Statements of Shareholders' Equity for the         
     Years Ended December 31, 1995, 1996 and 1997...........  F-5 
  Consolidated Statements of Cash Flows for the Years Ended       
     December 31, 1995, 1996 and 1997.......................  F-6 
  Notes to Consolidated Financial Statements................  F-7 

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INDEPENDENT AUDITORS' REPORT

To the Shareholders of                                                          
Twinlab Corporation and subsidiaries                                            
Ronkonkoma, New York                                                            

 We have audited the accompanying consolidated balance sheets of Twinlab
Corporation and subsidiaries as of December 31, 1996 and 1997, and the related  
consolidated statements of income, shareholders' equity and cash flows for each 
of the three years in the period ended December 31, 1997. These financial       
statements are the responsibility of the Company's management. Our              
responsibility is to express an opinion on these financial statements based on  
our audits.                                                                     

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain 
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting 
the amounts and disclosures in the financial statements. An audit also includes 
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

   In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of Twinlab Corporation and        
subsidiaries as of December 31, 1996 and 1997, and the results of their         
operations and their cash flows for each of the three years in the period ended 
December 31, 1997 in conformity with generally accepted accounting principles.  

DELOITTE & TOUCHE LLP                                                           

Jericho, New York                                                               
February 4, 1998                                                                

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TWINLAB CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS 
DECEMBER 31, 1996 AND 1997
(IN THOUSANDS OF DOLLARS EXCEPT SHARE AND PER SHARE AMOUNTS)

                                                                [Download Table]

                                                               1996        1997    
                                                             ---------   --------- 
                                                                                   
ASSETS (NOTE 8)                                                                    
CURRENT ASSETS:                                                                    
  Cash and cash equivalents................................. $   3,794   $   4,029 
  Accounts receivable, net of allowance for bad debts of                           
     $208 and $406, respectively (Note 13)..................    31,027      44,059 
  Inventories (Note 4)......................................    29,443      37,254 
  Deferred tax assets (Note 10).............................     1,218       1,615 
  Prepaid expenses and other current assets.................     1,076       1,288 
                                                             ---------   --------- 
          Total current assets..............................    66,558      88,245 
PROPERTY, PLANT AND EQUIPMENT, Net (Note 5).................    14,157      13,958 
DEFERRED TAX ASSETS (Note 10)...............................    52,858      48,777 
OTHER ASSETS (Note 6).......................................     7,964      20,344 
                                                             ---------   --------- 
          Total............................................. $ 141,537   $ 171,324 
                                                             =========   ========= 
LIABILITIES AND SHAREHOLDERS' EQUITY                                               
CURRENT LIABILITIES:                                                               
  Current portion of long-term debt (Note 8)................ $  20,231   $  13,993 
  Accounts payable..........................................    10,313      16,534 
  Accrued expenses and other current liabilities (Note 7)...     8,882      10,208 
                                                             ---------   --------- 
          Total current liabilities.........................    39,426      40,735 
LONG-TERM DEBT, less current portion (Note 8)...............   100,423     100,245 
                                                             ---------   --------- 
          Total liabilities.................................   139,849     140,980 
                                                             ---------   --------- 
COMMITMENTS AND CONTINGENCIES (Notes 11 and 12)                                    
SHAREHOLDERS' EQUITY (Notes 1 and 9):                                              
  Preferred stock, $.01 par value; 2,000,000 shares                                
     authorized; none issued................................        --          -- 
  Common stock, $1.00 par value; 75,000,000 shares                                 
     authorized; 27,000,000 shares outstanding as of                               
     December 31, 1996 and 27,320,100 as of December 31,                           
     1997...................................................    27,000      27,320 
  Additional paid-in capital................................   141,338     147,003 
  Accumulated deficit.......................................  (166,650)   (143,979)
                                                             ---------   --------- 
          Total shareholders' equity........................     1,688      30,344 
                                                             ---------   --------- 
          Total............................................. $ 141,537   $ 171,324 
                                                             =========   ========= 

See notes to consolidated financial statements. 
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TWINLAB CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME 
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS OF DOLLARS EXCEPT PER SHARE AMOUNTS)

                                                        [Enlarge/Download Table]

                                                               1995       1996       1997   
                                                             --------   --------   -------- 
                                                                                            
NET SALES (Note 13)......................................... $148,735   $170,075   $213,229 
COST OF SALES...............................................   89,932     99,827    120,947 
                                                             --------   --------   -------- 
GROSS PROFIT................................................   58,803     70,248     92,282 
OPERATING EXPENSES..........................................   27,191     30,784     43,433 
                                                             --------   --------   -------- 
INCOME FROM OPERATIONS......................................   31,612     39,464     48,849 
                                                             --------   --------   -------- 
OTHER (EXPENSE) INCOME:                                                                     
  Interest income...........................................      313        593        204 
  Interest expense..........................................     (866)   (10,005)   (12,315)
  Transaction expenses (Note 1).............................     (656)      (400)        -- 
  Nonrecurring non-competition agreement expense (Note 1)...       --    (15,300)        -- 
  Other.....................................................       61         32         27 
                                                             --------   --------   -------- 
                                                               (1,148)   (25,080)   (12,084)
                                                             --------   --------   -------- 
INCOME BEFORE PROVISION FOR INCOME TAXES AND EXTRAORDINARY                                  
  ITEM......................................................   30,464     14,384     36,765 
PROVISION FOR INCOME TAXES (Note 10)........................      240        796     14,094 
                                                             --------   --------   -------- 
INCOME BEFORE EXTRAORDINARY ITEM............................   30,224     13,588     22,671 
EXTRAORDINARY ITEM, net of income tax benefit of $1,134                                     
  (Note 1)..................................................       --     (1,792)        -- 
                                                             --------   --------   -------- 
NET INCOME..................................................   30,224     11,796     22,671 
PREFERRED STOCK DIVIDENDS...................................       --      4,862         -- 
                                                             --------   --------   -------- 
NET INCOME APPLICABLE TO COMMON STOCK....................... $ 30,224   $  6,934   $ 22,671 
                                                             ========   ========   ======== 
BASIC AND DILUTED INCOME PER SHARE (Note 9):                                                
  Income before extraordinary item.......................... $   1.12   $   0.33   $   0.84 
  Extraordinary item........................................       --      (0.07)        -- 
                                                             --------   --------   -------- 
  Net income................................................ $   1.12   $   0.26   $   0.84 
                                                             ========   ========   ======== 
  Basic weighted average shares outstanding.................   27,000     27,000     27,042 
                                                             ========   ========   ======== 
  Diluted weighted average shares outstanding...............   27,000     27,000     27,078 
                                                             ========   ========   ======== 
PRO FORMA RELATING TO CHANGE IN TAX STATUS                                                  
  (Note 1):                                                                                 
  Historical income before provision for income taxes and                                   
     extraordinary item..................................... $ 30,464   $ 14,384            
  Pro forma provision for income taxes......................   12,060      5,466            
                                                             --------   --------            
  Pro forma income relating to change in tax status before                                  
     extraordinary item.....................................   18,404      8,918            
  Extraordinary item........................................       --     (1,792)           
                                                             --------   --------            
  Pro forma net income relating to change in tax status.....   18,404      7,126            
  Preferred Stock dividends.................................       --      4,862            
                                                             --------   --------            
  Pro forma net income relating to change in tax status                                     
     applicable to common stock............................. $ 18,404   $  2,264            
                                                             ========   ========            
PRO FORMA BASIC AND DILUTED INCOME PER SHARE                                                
  (Note 9):                                                                                 
  Income before extraordinary item.......................... $   0.68   $   0.15            
  Extraordinary item........................................       --      (0.07)           
                                                             --------   --------            
  Net income................................................ $   0.68   $   0.08            
                                                             ========   ========            
  Basic and diluted weighted average shares outstanding.....   27,000     27,000            
                                                             ========   ========            

See notes to consolidated financial statements. 
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TWINLAB CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY 
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS EXCEPT SHARE DATA)

                                                        [Enlarge/Download Table]

                                          COMMON STOCK      ADDITIONAL  RETAINED              
                                      --------------------   PAID-IN    EARNINGS              
                                        SHARES     AMOUNT    CAPITAL    (DEFICIT)     TOTAL   
                                      ----------   -------  ----------  ---------   --------- 
                                                                                              
Balance at January 1, 1995...........    450,000   $   450   $     68   $  48,153   $  48,671 
Net income...........................         --        --         --      30,224      30,224 
Distributions to shareholders........         --        --         --     (23,490)    (23,490)
                                      ----------   -------   --------   ---------   --------- 
Balance at December 31, 1995.........    450,000       450         68      54,887      55,405 
Net income...........................         --        --         --      11,796      11,796 
Distributions to shareholders........         --        --         --      (8,929)     (8,929)
Issuance of common stock (Note 1)....    550,000       550      4,950          --       5,500 
Repurchase of shareholders' common                                                            
  stock and recapitalization                                                                  
  including income tax effects (Note                                                          
  1).................................         --        --     68,654    (219,542)   (150,888)
Additional shares issued in 18.5 for                                                          
  1 stock split effected in the form                                                          
  of a stock dividend (Note 9)....... 17,500,000    17,500    (17,500)         --          -- 
Dividends on Preferred Stock.........         --        --         --      (4,862)     (4,862)
Initial public offering of common                                                             
  stock..............................  8,500,000     8,500     85,166          --      93,666 
                                      ----------   -------   --------   ---------   --------- 
Balance at December 31, 1996......... 27,000,000    27,000    141,338    (166,650)      1,688 
Net income...........................         --        --         --      22,671      22,671 
Shares issued in connection with the                                                          
  acquisition of Changes                                                                      
  International (Note 3).............    312,500       312      5,547          --       5,859 
Shares issues in connection with the                                                          
  exercise of stock options and                                                               
  related tax benefit................      7,600         8        118          --         126 
                                      ----------   -------   --------   ---------   --------- 
Balance at December 31, 1997......... 27,320,100   $27,320   $147,003   $(143,979)  $  30,344 
                                      ==========   =======   ========   =========   ========= 

See notes to consolidated financial statements. 
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TWINLAB CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS 
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(IN THOUSANDS OF DOLLARS) 

                                                        [Enlarge/Download Table]

                                                                1995       1996        1997   
                                                              --------   ---------   -------- 
                                                                                              
CASH FLOWS FROM OPERATING ACTIVITIES:                                                         
  Net income................................................  $ 30,224   $  11,796   $ 22,671 
  Adjustment to reconcile net income to net cash provided by                                  
    operating activities:                                                                     
    Extraordinary item......................................        --       1,792         -- 
    Depreciation and amortization...........................     1,011       1,880      1,949 
    Gain on sale of equipment...............................       (58)         --         (3)
    Bad debt expense........................................       169         125        200 
    Deferred income taxes...................................        --      (3,484)     3,684 
    Nonrecurring non-competition agreement expense..........        --      15,300         -- 
    Changes in operating assets and liabilities (net of                                       
      effect of business acquired):                                                           
      Accounts receivable...................................    (6,649)     (6,780)   (13,232)
      Inventories...........................................    (2,541)     (4,170)    (7,093)
      Prepaid expenses and other current assets.............       307        (204)      (212)
      Accounts payable......................................     3,242       3,459      5,494 
      Accrued expenses and other current liabilities........     1,123       5,758     (2,047)
                                                              --------   ---------   -------- 
        Net cash provided by operating activities...........    26,828      25,472     11,411 
                                                              --------   ---------   -------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                                         
  Purchase of business, net of cash acquired................        --          --     (3,726)
  Maturities of marketable securities.......................     1,178         201         -- 
  Proceeds from sales of property, plant and equipment......       825          10      3,099 
  Acquisition of property, plant and equipment..............    (2,641)     (2,252)    (3,842)
  (Increase) decrease in other assets.......................         6         411       (417)
                                                              --------   ---------   -------- 
        Net cash used in investing activities...............      (632)     (1,630)    (4,886)
                                                              --------   ---------   -------- 
CASH FLOWS FROM FINANCING ACTIVITIES:                                                         
  Proceeds from issuance of debt............................     4,685     173,000         -- 
  Proceeds from issuance of Preferred Stock.................        --      67,000         -- 
  Dividends on Preferred Stock..............................        --      (4,862)        -- 
  Distributions to shareholders.............................   (23,490)     (8,929)        -- 
  Payments of debt..........................................    (5,056)    (61,002)    (6,270)
  Redemption of Preferred Stock.............................        --     (67,000)        -- 
  Issuance of common stock..................................        --       5,500        126 
  Repurchase of shareholders' common stock and                                                
    recapitalization........................................        --    (216,780)        -- 
  Net proceeds from initial public offering of common                                         
    stock...................................................        --      93,666         -- 
  Payment of financing costs................................        --      (8,450)        -- 
  Principal payments of capital lease obligations...........      (125)       (136)      (146)
                                                              --------   ---------   -------- 
        Net cash used in financing activities...............   (23,986)    (27,993)    (6,290)
                                                              --------   ---------   -------- 
Net increase (decrease) in cash and cash equivalents........     2,210      (4,151)       235 
Cash and cash equivalents at beginning of year..............     5,735       7,945      3,794 
                                                              --------   ---------   -------- 
Cash and cash equivalents at end of year....................  $  7,945   $   3,794   $  4,029 
                                                              ========   =========   ======== 
Supplemental disclosures of cash flow information:                                            
  Cash paid during the years for:                                                             
    Interest................................................  $    853   $   8,020   $ 12,251 
                                                              ========   =========   ======== 
    Income taxes............................................  $    216   $   3,063   $  9,726 
                                                              ========   =========   ======== 

See notes to consolidated financial statements. 
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TWINLAB CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

1.  DESCRIPTION OF ENTITY, BASIS OF PRESENTATION AND INITIAL PUBLIC OFFERING    

Prior to May 7, 1996, Twin Laboratories Inc. ("Old Twin") and its     
affiliates, Twinlab Export Corp. ("Export"), Twinlab Specialty Corporation      
("Specialty"), Alvita Products, Inc. ("Alvita"), Natur-Pharma, Inc.             
("Natur-Pharma"), B. Bros. Realty Corporation ("B. Bros.") and Advanced Research
Press, Inc. ("ARP") (collectively, the "Companies") operated as separate        
corporations, all of which were wholly-owned by the same individuals (with some 
companies having different ownership percentages among such individuals) except 
for Natur-Pharma and B. Bros., which were 97 percent owned by such individuals. 

On February 27, 1996, Twinlab Corporation (formerly TLG Laboratories  
Holding Corp.) ("Twinlab") was incorporated in contemplation of the Acquisition 
(as hereinafter defined). The accompanying consolidated financial statements    
include the accounts of Twinlab and subsidiaries (the "Company") after giving   
retroactive effect, in a manner similar to a pooling of interests, to the merger
of the Companies pursuant to the Acquisition.                                   

  The shareholders of the Companies entered into a stock purchase and sale
agreement dated as of March 5, 1996 and which was consummated on May 7, 1996    
pursuant to which (i) Green Equity Investors II, L.P. ("GEI") acquired 8,880,000
shares (adjusted for the 18.5 for 1 stock split -- see Note 9a) (48 percent) of 
the common stock of Twinlab for aggregate consideration of $4,800 and shares of 
11.25 percent non-voting junior redeemable preferred stock of Twinlab (the      
"Junior Preferred Stock") for aggregate consideration of $37,000, (ii) certain  
other investors acquired 1,295,000 shares (adjusted for the 18.5 for 1 stock    
split -- see Note 9a) (7 percent) of the common stock of Twinlab (each of these 
other investors owns less than 5 percent of the common stock of Twinlab) for    
aggregate consideration of $700 and shares of 14 percent non-voting senior      
redeemable preferred stock of Twinlab for aggregate consideration of $30,000    
(the "Senior Preferred Stock", and together with the Junior Preferred Stock, the
"Preferred Stock"), (iii) certain of the shareholders of the Companies (the     
"Continuing Shareholders") exchanged certain of their shares of common stock of 
Natur-Pharma for 8,325,000 shares (adjusted for the 18.5 for 1 stock            
split -- see Note 9a) (45 percent) of the outstanding shares of common stock of 
Twinlab, valued at $4,500, (iv) Twinlab purchased all of the remaining shares of
common stock of Natur-Pharma from the existing shareholders for cash, resulting 
in Natur-Pharma becoming a wholly-owned subsidiary of Twinlab, (v) Old Twin,    
Alvita, Export, Specialty, and B. Bros. merged into Natur-Pharma and ARP merged 
with Natur-Pharma II, Inc., a wholly-owned subsidiary of Natur-Pharma (the      
surviving entity in such merger is referred to herein as "ARP"), and (vi) in    
connection with such mergers, the existing shareholders received cash in        
consideration for all their shares of capital stock of Old Twin, Alvita, Export,
Specialty, B. Bros., and ARP. The total cash consideration that the existing    
shareholders received was approximately $212,500, approximately $15,300 of which
represented consideration for non-competition agreements with each of the       
existing shareholders, which was recognized as a nonrecurring expense upon the  
consummation of the Acquisition. The transactions described above are           
hereinafter referred to as the "Acquisition." Concurrently with the consummation
of the Acquisition, the Company entered into a credit facility (which provided  
for a term loan facility in the amount of $53,000 and a revolving credit        
facility in the amount of $15,000) (the "Original Credit Facility") and issued  
$100,000 aggregate principal amount of senior subordinated notes in a private   
placement (the "Note Offering", and, collectively with the Acquisition and the  
Original Credit Facility, the "Transactions"), which notes were subsequently    
exchanged in October 1996 for publicly registered notes. The net cash proceeds  
of the Note Offering were used, together with borrowings under the Original     
Credit Facility, the proceeds from the issuance of the common stock and         
Preferred Stock of Twinlab and available cash of the Company, to finance the    
Acquisition, to refinance approximately $7,000 aggregate principal amount of    
debt of the Company and to pay related fees and expenses. In connection with the
Acquisition, Natur-Pharma's name was changed to Twin Laboratories Inc. ("Twin").
In connection with the Transactions, the Company has expensed $656 and $400 of  
professional fees for the year ended December 31, 1995 and 1996, respectively   
(the "Transaction Expenses").                                                   
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

     Because the Acquisition did not result in a change in control as defined in
Emerging Issues Task Force Issue No. 88-16, "Basis in Leveraged Buyout          
Transactions" ("EITF 88-16"), the transactions were accounted for as a          
recapitalization under the guidance of EITF 88-16 and the Companies' historical 
basis of accounting were applied to the consolidated financial statements of    
Twinlab.                                                                        

 The Company manufactures and markets high quality nutritional products,
including a complete line of vitamins, minerals, and nutraceuticals,            
antioxidants, fish and marine oils and sports nutrition supplements through its 
Twinlab Division; a full line of herbs and phytonutrients through its Nature's  
Herbs Division; herbal teas through its Alvita Division; and a line of          
nutritional supplements through its network marketing subsidiary, Changes       
International of Fort Walton Beach, Inc. ("Changes International"). Twinlab     
Corporation also publishes "All Natural Muscular Development", a sports and     
fitness magazine, and health and fitness related books, audios, and newsletters 
through its publishing subsidiary, ARP.                                         

The following unaudited pro forma results of operations assume the    
Transactions occurred on January 1, 1995 and excludes the effect of (i) the     
nonrecurring non-competition agreement expense, and (ii) the Transaction        
Expenses, and reflects the additional interest expense relating to the financing
of the Acquisition and the change in tax status. The pro forma operations data  
has been prepared for comparative purposes only and does not purport to         
represent what the Company's actual results of operations would have been had   
the Transactions in fact occurred on January 1, 1995.                           

                                                                [Download Table]

                                                               1995      1996  
                                                             --------  --------
                                                                               
Net sales................................................... $148,735  $170,075
Interest expense............................................   15,684    15,395
Income before extraordinary item............................    9,418    14,942
Basic and diluted income before extraordinary item per                         
  share.....................................................     0.35      0.55
Weighted average shares outstanding (in thousands)..........   27,000    27,000

     On November 15, 1996, the Company consummated an initial public offering of
common stock (the "IPO"), with the sale to the public of 8,500,000 shares of    
common stock at $12.00 per share. In connection with the consummation of the    
IPO, the Company entered into an amended credit agreement which provides for a  
revolving credit facility of $50,000 (the "Revolving Credit Facility") (see Note
8). The net proceeds to the Company of the IPO of approximately $93,666 (after  
underwriters' discounts of $6,630 and offering expenses of $1,704), together    
with available cash resources of the Company and approximately $20,000 of       
borrowings under the Revolving Credit Facility, were used to repay all of the   
Company's outstanding indebtedness under the term loan contained in the Original
Credit Facility, plus accrued and unpaid interest thereon of approximately $233,
and to redeem all of the outstanding shares of Preferred Stock having an        
aggregate liquidation preference of $67,000, plus accrued and unpaid dividends  
thereon of approximately $4,862 (the "Repayments"). In connection with the      
prepayment of outstanding indebtedness under the term loan facility and the     
establishment of the Revolving Credit Facility, the Company recorded an         
extraordinary charge representing the write-off of previously deferred finance  
costs incurred in connection with the Original Credit Facility of approximately 
$1,792 (net of tax benefit of $1,134).                                          

The following unaudited pro forma results of operations assume the    
Transactions and the subsequent IPO occurred on January 1, 1995 and excludes the
effect of (i) the nonrecurring non-competition agreement expense, (ii) the      
Transaction Expenses, (iii) the extraordinary item, and (iv) the dividends paid 
on the Preferred Stock which was redeemed in connection with the IPO, and       
reflects the additional interest expense relating to the financing of the       
Acquisition and the change in tax status. The pro forma operations data has been
prepared for comparative purposes only and does not purport to represent what   
the Company's actual                                                            

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

results of operations would have been had the Transactions and the subsequent   
IPO in fact occurred on January 1, 1995.                                        

                                                                [Download Table]

                                                               1995      1996  
                                                             --------  --------
                                                                               
Net sales................................................... $148,735  $170,075
Interest expense............................................   12,355    12,372
Net income..................................................   11,429    16,729
Basic and diluted net income per share......................     0.42      0.62
Weighted average shares outstanding (in thousands)..........   27,000    27,000

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                  

  A. PRINCIPLES OF CONSOLIDATION -- All material intercompany accounts and
transactions have been eliminated.                                              

     B. CASH EQUIVALENTS -- Investments with original maturities of three months
or less are considered cash equivalents.                                        

  C. INVENTORIES -- Inventories are stated at the lower of cost (first-in,
first-out method) or market value.                                              

D. PROPERTY, PLANT AND EQUIPMENT -- Depreciation is computed using the
straight-line method based upon the estimated useful lives of the related assets
which range from three to forty years. Amortization of leasehold improvements is
computed by the straight-line method over the shorter of the estimated useful   
lives of the related assets or lease term.                                      

     E. INTANGIBLE ASSETS -- Trademarks are being amortized on the straight-line
method over their expected lives, not to exceed forty years. Goodwill, which    
represents the excess of purchase price over fair value of net assets acquired, 
is being amortized on the straight-line method over periods ranging from twenty 
to forty years. Other intangible assets acquired in connection with Changes     
International are being amortized on the straight-line method over five years.  

F. INCOME TAXES -- The Company accounts for income taxes under the    
provisions of Statement of Financial Accounting Standards ("SFAS") No. 109,     
"Accounting For Income Taxes", which requires recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have    
been included in the Company's financial statements or tax returns. Under this  
method, deferred tax assets and liabilities are determined based on the         
differences between the financial accounting and tax bases of assets and        
liabilities using enacted tax rates in effect for the year in which the         
differences are expected to reverse.                                            

   G. REVENUE RECOGNITION -- Revenue from product sales is recognized at the
time of shipment to the customer. Revenue from magazine subscriptions is        
recorded as deferred revenue at the time of sale and a pro rata share is        
included in revenue as magazines are delivered to subscribers. Advertising      
revenue is recognized when the related magazines are issued.                    

  H. RESEARCH AND DEVELOPMENT EXPENSES -- The Company charges research and
development expenses to operations as incurred. Research and development        
expenses were $1,140, $1,119 and $1,095 for the years ended December 31, 1995,  
1996 and 1997, respectively.                                                    

  I. EARNINGS PER SHARE -- The Company retroactively adopted SFAS No. 128,
"Earnings Per Share" during 1997. SFAS No. 128 changed the computation,         
presentation and disclosure requirements for earnings per share. SFAS No. 128   
requires presentation of "basic" and "diluted" earnings per share. The adoption 
of SFAS No. 128 did not have a material impact on the Company's income per      
share.                                                                          

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

J. IMPAIRMENT OF LONG-LIVED ASSETS -- In accordance with SFAS No. 121,
"Accounting For the Impairment of Long-Lived Assets and For Long-Lived Assets To
Be Disposed Of", the Company reviews its long-lived assets, including property  
and equipment, goodwill and intangible assets for impairment whenever events or 
changes in circumstances indicate that the carrying amount of the assets may not
be fully recoverable. To determine recoverability of its long-lived assets, the 
Company evaluates the probability that future undiscounted net cash flows will  
be less than the carrying amount of the assets. Impairment costs, if any, are   
measured by comparing the carrying amount of the related assets to their fair   
value.                                                                          

K. USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS -- The 
preparation of financial statements in conformity with generally accepted       
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of         
contingent assets and liabilities at the date of the financial statements and   
the reported amounts of revenues and expenses during the reporting period.      
Actual results could differ from those estimates.                               

    L. RECLASSIFICATIONS -- Certain prior year balances have been reclassified
to conform with current year classifications.                                   

3.  ACQUISITION                                                                 

 In November 1997, the Company acquired all of the outstanding shares of
Changes International. Changes International is a network marketer of           
nutritional supplements. The Company paid $7,888 in cash, including acquisition 
costs, and issued 312,500 shares of its common stock (which had a market value  
of approximately $5,859 on the date of the acquisition).                        

     This acquisition has been accounted for as a purchase and, accordingly, the
results of Changes International are included in the consolidated statements of 
income of the Company since the date of acquisition and the purchase price      
(including acquisition costs) has been allocated on a preliminary basis to net  
assets acquired based upon their fair values. Goodwill relating to the          
acquisition of $10,768 is being amortized over 20 years. The following unaudited
pro forma information assumes that the acquisition of Changes International had 
occurred as of January 1, 1996, including the impact of the amortization expense
associated with intangible assets acquired, increased interest expense on       
acquisition debt and related income tax effects. The pro forma operations data  
has been prepared for comparative purposes only and does not purport to         
represent what the Company's actual results of operations would have been had   
the acquisition, in fact, occurred on January 1, 1996.                          

                                                                [Download Table]

                                                               1996      1997  
                                                             --------  --------
                                                                               
Net sales................................................... $189,879  $247,636
Net income..................................................   11,154    23,628
Basic and diluted net income per share......................     0.23      0.87
Diluted weighted average shares outstanding (in                                
  thousands)................................................   27,313    27,391

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

4.  INVENTORIES                                                                 

Inventories consist of the following:                                 

                                                                [Download Table]

                                                              1996     1997  
                                                             -------  -------
                                                                             
Raw materials............................................... $10,802  $16,340
Work in process.............................................   8,712    7,393
Finished goods..............................................   9,929   13,521
                                                             -------  -------
          Total............................................. $29,443  $37,254
                                                             =======  =======

5.  PROPERTY, PLANT AND EQUIPMENT                                               

Property, plant and equipment consist of the following:               

                                                                [Download Table]

                                                              1996     1997  
                                                             -------  -------
                                                                             
Land, building and leasehold improvements................... $12,197  $12,322
Plant equipment.............................................   7,006    7,461
Office equipment............................................   2,292    2,606
Automobiles.................................................      12       33
                                                             -------  -------
                                                              21,507   22,422
Less: accumulated depreciation and amortization.............   7,350    8,464
                                                             -------  -------
  Property, plant and equipment -- net...................... $14,157  $13,958
                                                             =======  =======
  Depreciation and amortization expense..................... $ 1,121  $ 1,120
                                                             =======  =======

   Included in plant equipment at December 31, 1996 and 1997 are assets held
under capital leases with net carrying values totalling $343 and $206,          
respectively. Accumulated amortization on these assets at December 31, 1996 and 
1997 was $343 and $480, respectively.                                           

6.  OTHER ASSETS                                                                

Other assets consist of the following:                                

                                                                [Download Table]

                                                               1996      1997  
                                                              ------    -------
                                                                               
Goodwill and related intangible assets, net of accumulated                     
  amortization of $131 and $274, respectively...............  $  573    $13,197
Deferred finance costs, net of accumulated amortization of                     
  $321 and $872, respectively...............................   4,915      4,337
Trademarks, net of accumulated amortization of $213 and                        
  $324, respectively........................................   1,400      1,391
Other.......................................................   1,076      1,419
                                                              ------    -------
          Total.............................................  $7,964    $20,344
                                                              ======    =======

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

7.  ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES                              

  Accrued expenses and other current liabilities consist of the following:

                                                                [Download Table]

                                                               1996      1997  
                                                              ------    -------
                                                                               
Accrued salaries, employee benefits and payroll taxes.......  $1,957    $ 2,477
Other.......................................................   6,925      7,731
                                                              ------    -------
          Total.............................................  $8,882    $10,208
                                                              ======    =======

8.  LONG-TERM DEBT                                                              

Long-term debt consists of the following:                             

                                                                [Download Table]

                                                               1996      1997  
                                                             --------  --------
                                                                               
Revolving Credit Facility(a)................................ $ 20,000  $ 13,750
Senior subordinated notes(b)................................  100,000   100,000
Note payable to a power authority, payable in monthly                          
  installments of $2, including interest at 6.38 percent,                      
  maturing February 2011....................................      277       266
Obligations under capital lease.............................      304       158
Other.......................................................       73        64
                                                             --------  --------
                                                              120,654   114,238
Less: current portion.......................................   20,231    13,993
                                                             --------  --------
          Total............................................. $100,423  $100,245
                                                             ========  ========

---------------                                                                 
(a) The Revolving Credit Facility expires on May 7, 2002 and provides for       
borrowings up to $50,000. Borrowings under the Revolving Credit Facility
  bear interest, at the Company's discretion, at either the Alternative Base
    Rate, as defined, or at the Eurodollar Rate (maximum six-month term), plus a
margin of 1.25 percent, as defined. The effective interest rate on      
borrowings under the Revolving Credit Facility ranged from 6.75 to 8.5  
   percent as of December 31, 1997. Interest rates are subject to increases or
    reduction based upon Twin's meeting certain financial tests. The proceeds of
    the Revolving Credit Facility are available for working capital requirements
and for general corporate purposes, including up to $35,000 of which is 
available to fund permitted acquisitions, as defined, subject to certain
  conditions and reductions. (At December 31, 1997, approximately $21,250 of
this portion of the Revolving Credit Facility was available to fund     
  permitted acquisitions). A portion of the Revolving Credit Facility not to
exceed $15,000 is available for the issuance of letters of credit which 
generally have an initial term of one year or less. The Revolving Credit
Facility is secured by first priority security interests in all of the  
 tangible and intangible assets of Twin and its direct subsidiaries and is
guaranteed by Twinlab, ARP, and Changes International. In addition, the 
   Revolving Credit Facility contains certain restrictive covenants including,
    among other things, the maintenance of certain debt coverage ratios, as well
as restrictions on additional indebtedness, dividends and certain other 
significant transactions. The Company was in compliance with all such   
covenants as of December 31, 1997.                                      

(b) The senior subordinated notes mature on May 15, 2006 and bear interest at a 
   rate of 10 1/4 percent per annum. The senior subordinated notes are jointly
and severally guaranteed by Twinlab, ARP, and Changes International on a
full and unconditional unsecured senior subordinated basis. The senior  
  subordinated notes are callable after five years at a premium to par which
  declines to par after eight years. Until May 15, 1999, Twin has the option
   to redeem up to 35 percent of the subordinated notes with the proceeds of a
  public offering at a redemption price of 109 1/2 percent. Upon a change of
control, as defined,                                                    

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

    Twin is required to offer to redeem the subordinated notes at 101 percent of
    the principal amount plus accrued and unpaid interest. Restrictive covenants
contained in the indenture governing the subordinated notes (the "Note  
Indenture") include, among other things, limitations on additional      
indebtedness, investments, dividends and certain other significant      
 transactions. The Company was in compliance with all such covenants as of
December 31, 1997.                                                      

   The Revolving Credit Facility and the Note Indenture restrict the payment
of dividends and the making of loans, advances or other distributions of assets 
to Twinlab, except in certain limited circumstances.                            

Maturities of long-term debt are as follows:                          

                                                                [Download Table]

                  YEAR ENDING DECEMBER 31,                              
                  ------------------------                              
                                                                        
1998........................................................    $ 13,993
1999........................................................          14
2000........................................................          15
2001........................................................          16
2002........................................................          17
Thereafter..................................................     100,183
                                                                --------
          Total.............................................    $114,238
                                                                ========

    The carrying amount of the Company's debt approximates fair value based on
borrowing rates currently available to the Company for loans with similar terms.

9.  SHAREHOLDERS' EQUITY                                                        

(a) CHANGES IN AUTHORIZED CAPITAL AND STOCK SPLIT -- In July 1996, the
Board of Directors (the "Board") and the stockholders authorized an increase in 
the number of common shares authorized to 75,000,000 and an increase in the     
number of shares of preferred stock authorized to 2,000,000, which preferred    
stock may be issued by the Board on such terms and with such rights, preferences
and designations as the Board may determine, without further stockholder action.
Prior to the IPO, on November 15, 1996, the Board authorized a stock split      
(effected in the form of a stock dividend) of all issued and outstanding common 
shares at the rate of 18.5 for 1, which increased the number of issued and      
outstanding shares from 1,000,000 to 18,500,000. The stock split and the change 
in authorized common stock have been retroactively reflected for purposes of    
calculating income per share for all periods presented herein.                  

     (b) STOCK INCENTIVE PLAN -- In November 1996, the Board and stockholders of
the Company approved and adopted the Twinlab Corporation 1996 Stock Incentive   
Plan (the "1996 Plan"). The 1996 Plan provides for the issuance of a total of up
to 400,000 authorized and unissued shares of common stock, treasury shares      
and/or shares acquired by the Company for purposes of the 1996 Plan. Awards     
under the 1996 Plan may be made in the form of (i) incentive stock options; (ii)
nonqualified stock options; (iii) stock appreciation rights; (iv) restricted    
stock; and (v) performance shares. Options become exercisable over five years   
from the date of grant at the rate of 20 percent of the grant each year and     
expire up to ten years after the date of grant. On November 14, 1996, the Board 
granted 120,000 nonqualified stock options under the 1996 Plan to certain key   
persons at an exercise price equal to the initial public offering price of      
$12.00 per share.                                                               

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TWINLAB CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

The following table sets forth summarized information concerning the  
Company's stock options:                                                        

                                                        [Enlarge/Download Table]

                                                                              WEIGHTED
                                                                              AVERAGE 
                                                  NUMBER       EXERCISE       EXERCISE
                                                 OF SHARES    PRICE RANGE      PRICE  
                                                 ---------  ---------------   --------
                                                                                      
Balance, January 1, 1996........................       --         $--          $   -- 
Granted.........................................  120,000       $12.00         $12.00 
                                                  -------   ---------------    ------ 
Balance, December 31, 1996......................  120,000       $12.00         $12.00 
Granted.........................................   56,000   $18.13 -- $19.38   $19.24 
Canceled or expired.............................   (6,000)      $12.00         $12.00 
Exercised.......................................   (7,600)      $12.00         $12.00 
                                                  -------   ---------------    ------ 
Balance, December 31, 1997......................  162,400   $12.00 -- $19.38   $14.50 
                                                  =======   ===============    ====== 
Shares exercisable at December 31, 1997.........   10,400                      $12.00 
                                                  =======                      ====== 
Shares reserved for issuance at December 31,                                          
  1997..........................................  392,400                             
                                                  =======                             

Significant option groups outstanding at December 31, 1997 and related
weighted average price and life information were as follows:                    

                                                                [Download Table]

                                 WEIGHTED                                      
                                  AVERAGE     WEIGHTED                 WEIGHTED
                                 REMAINING    AVERAGE                  AVERAGE 
   RANGE OF         NUMBER      CONTRACTUAL   EXERCISE     NUMBER      EXERCISE
EXERCISE PRICE    OUTSTANDING      LIFE        PRICE     EXERCISABLE    PRICE  
---------------   -----------   -----------   --------   -----------   --------
                                                                               
    $12.00          106,400         8.9        $12.00      10,400       $12.00 
$18.13 -- $19.38     56,000         9.8        $19.24          --          N/A 

     The Company applies Accounting Principles Board Opinion No. 25, "Accounting
For Stock Issued To Employees", and selected interpretations in accounting for  
the 1996 Plan. Accordingly, as all options have been granted at exercise prices 
equal to fair market value on the date of grant, no compensation expense has    
been recognized by the Company in connection with its stock-based compensation  
plan. Had compensation cost for the Company's 1996 Plan been determined based   
upon the fair value at the grant date for awards under the 1996 Plan consistent 
with the methodology prescribed under Statement of Financial Accounting         
Standards No. 123, "Accounting For Stock-Based Compensation", the Company's net 
income would have been reduced by approximately $14 and $188 in 1996 and 1997,  
respectively. The weighted average fair value of the options granted during 1996
and 1997 is estimated at $6.81 and $10.89 on the date of grant (using           
Black-Scholes option pricing model) with the following weighted average         
assumptions for 1996 and 1997, respectively: volatility of 45 percent and 46    
percent, risk-free interest rate of 6.09 percent and 5.75 percent, and an       
expected life of seven years.                                                   

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TWINLAB CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

c. NET INCOME PER SHARE -- In 1997, the Company adopted SFAS No. 128, 
"Earnings Per Share". Basic income per share is determined by using the weighted
average number of shares of common stock outstanding during each period. Diluted
income per share further assumes the issuance of common shares for all dilutive 
outstanding common stock options. The calculation for income before             
extraordinary item per share for each of the three years ended December 31, 1997
was as follows:                                                                 

                                                        [Enlarge/Download Table]

                                  1995                           1996                           1997            
                      ----------------------------   ----------------------------   ----------------------------
                                           PER-                           PER-                           PER-   
                                           SHARE                          SHARE                          SHARE  
                      INCOME    SHARES    AMOUNT     INCOME    SHARES    AMOUNT     INCOME    SHARES    AMOUNT  
                      -------   ------   ---------   -------   ------   ---------   -------   ------   ---------
                                                (IN THOUSANDS, EXCEPT PER SHARE DATA)                           
                                                                                                                
Income before                                                                                                   
  extraordinary                                                                                                 
  item............... $30,224                        $13,588                        $22,671                     
Less: Preferred                                                                                                 
  dividends..........   --                            (4,862)                         --                        
                      -------                        -------                        -------                     
BASIC INCOME PER                                                                                                
  SHARE                                                                                                         
  Income before                                                                                                 
    extraordinary                                                                                               
    item.............  30,224   27,000(a)   $1.12      8,726   27,000(a)   $0.33     22,671   27,042     $0.84  
                                           =====                          =====                          =====  
EFFECT OF DILUTIVE                                                                                              
  SECURITIES:                                                                                                   
  Options............   --        --                   --        --                   --          36            
                      -------   ------               -------   ------               -------   ------            
DILUTED INCOME PER                                                                                              
  SHARE                                                                                                         
  Income before                                                                                                 
    extraordinary                                                                                               
    item............. $30,224   27,000     $1.12     $ 8,726   27,000     $0.33     $22,671   27,078     $0.84  
                      =======   ======     =====     =======   ======     =====     =======   ======     =====  

---------------                                                                 
(a) Amount assumes, as outstanding for the entire year, the 10,175,000 shares   
(adjusted for the 18.5 for one stock split -- see Note 9a) issued in    
connection with the Acquisition and the 8,500,000 shares issued in      
connection with the IPO (see Note 1).                                   

10.  INCOME TAXES                                                               

     Prior to the consummation of the Acquisition, all of the Companies were "S"
corporations and as such Federal and state taxes were generally paid at the     
shareholder level only. The provision for income taxes for the year ended       
December 31, 1995 and through the consummation of the Acquisition on May 7, 1996
represents state taxes for those states that impose a tax on "S" corporations.  

Upon consummation of the Acquisition, the Companies terminated their S
Corporation status. The mergers of Old Twin, Alvita, Export, Specialty and B.   
Bros. into Natur-Pharma were treated as taxable asset purchases for Federal and 
state income tax purposes and a recapitalization for financial accounting       
purposes. For Federal and state income tax purposes, the purchase price was     
allocated among the various corporations and their respective assets and        
liabilities based on the respective fair values as of the closing of the        
Acquisition. This resulted in different book and tax asset bases for the assets 
of these companies, which resulted in deferred tax assets of approximately      
$55,571.                                                                        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

  The provision for (benefit from) income taxes consists of the following:

                                                                [Download Table]

                                                          1995   1996      1997  
                                                          ----  -------   -------
                                                                                 
Current:                                                                         
  Federal................................................ $ --  $ 3,662   $ 8,916
  State and local........................................  240      618     1,494
                                                          ----  -------   -------
                                                            --    4,280    10,410
                                                          ----  -------   -------
Deferred:                                                                        
  Federal................................................   --   (3,108)    3,515
  State and local........................................   --     (376)      169
                                                          ----  -------   -------
                                                            --   (3,484)    3,684
                                                          ----  -------   -------
                                                          $240  $   796   $14,094
                                                          ====  =======   =======

 The difference between the statutory Federal tax rate and the Company's
effective tax rate is as follows (as a percentage of pre-tax income):           

                                                                [Download Table]

                                                             1995    1996    1997 
                                                             -----   -----   ---- 
                                                                                  
Statutory Federal income tax rate...........................  34.0%   34.0%  35.0%
State and local income taxes (net of Federal tax benefit)...   0.8     1.1    2.9 
Exempt income due to "S" Corporation status................. (34.0)  (26.8)    -- 
Other.......................................................    --    (2.8)   0.4 
                                                             -----   -----   ---- 
Effective tax rate..........................................   0.8%    5.5%  38.3%
                                                             =====   =====   ==== 

   At December 31, 1996 and 1997, the deferred tax assets, which required no
valuation allowance, consisted of:                                              

                                                                [Download Table]

                                                               1996       1997  
                                                              -------    -------
                                                                                
Accounts receivable.........................................  $   856    $ 1,099
Inventories.................................................      238        380
Property, plant and equipment...............................      464         34
Intangible and other assets.................................   52,394     48,743
Other.......................................................      124        136
                                                              -------    -------
                                                              $54,076    $50,392
                                                              =======    =======

11.  EMPLOYEE BENEFIT PLANS                                                     

Old Twin provided a profit sharing plan, and Natur-Pharma provided an 
Employee Savings and Investment Plan to all eligible employees, as defined,     
through July 1, 1996. Effective July 1, 1996, the Company adopted the Twin      
Laboratories Inc. 401(k) Plan (the "401(k) Plan") which is an amendment and     
restatement of the Old Twin profit sharing plan and merged the Natur-Pharma     
Employee Savings and Investment Plan into the 401(k) Plan.                      

Eligible employees may contribute up to 15 percent of their annual    
compensation, subject to certain limitations, and the Company will match 50     
percent of an employee's contribution. Total provisions with respect to these   
plans approximated $287, $164 and $375 for the years ended December 31, 1995,   
1996 and 1997, respectively.                                                    

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TWINLAB CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

12.  COMMITMENTS AND CONTINGENCIES                                              

     A. LEASES -- The Company leases certain warehouse space and equipment under
operating leases. Generally, the leases carry renewal provisions and require the
payment of maintenance costs. Rental payments may be adjusted for increases in  
taxes and other costs above specific amounts. Rental expense charged to         
operations for the years ended December 31, 1995, 1996 and 1997 was             
approximately $1,370, $1,579, and $1,874, respectively.                         

    Future minimum payments under noncancellable operating leases with initial
or remaining terms of more than one year are as follows:                        

                                                                [Download Table]

             YEAR ENDING DECEMBER 31,                           
             ------------------------                           
                                                                
1998...................................................  $ 3,089
1999...................................................    2,408
2000...................................................    2,300
2001...................................................    1,813
2002...................................................    1,697
Thereafter.............................................    1,828
                                                         -------
     Total.............................................  $13,135
                                                         =======

   During 1997, the Company entered into several agreements for the sale and
leaseback of certain production equipment. The Company received $3,099 which    
approximated the net book value of the assets sold. These leases have been      
classified as operating leases.                                                 

 B. LEGAL MATTERS -- The Company, like various other participants in the
nutritional supplement industry, has been a defendant in court actions seeking  
damages for alleged personal injuries resulting from products containing        
allegedly contaminated added manufactured L-Tryptophan. To date, 132 of the 133 
suits in which the Company was a named defendant (the "L-Tryptophan Actions")   
have been dismissed or settled at no cost to the Company pursuant to an         
indemnification agreement (the "Indemnification Agreement") between the Company 
and a U.S. subsidiary of the Japanese manufacturer of the allegedly contaminated
ingredient. The Company believes, after consultation with outside counsel, that 
few new lawsuits are likely to be brought in view of applicable statutes of     
limitation. Based upon consultation with outside counsel, the Company also      
believes that , in light of the Indemnification Agreement and the resolution of 
virtually all of the L-Tryptophan Actions at no cost to the Company, the        
prospect of the remaining L-Tryptophan Actions and any possible future actions  
having a material adverse effect on the Company's consolidated financial        
statements is remote. The Company no longer markets any products containing     
added manufactured L-Tryptophan.                                                

 The Company is also engaged in various other litigation in the ordinary
course of business. Management is of the opinion that the amounts which may be  
awarded or assessed, if any, in connection with these matters will not have a   
material adverse effect on the consolidated financial statements.               

13.  MAJOR CUSTOMERS AND CREDIT CONCENTRATIONS                                  

     The Company has two significant customers which accounted for approximately
27 and 21 percent, respectively, of net sales for 1995; 25 and 20 percent,      
respectively, of net sales for 1996; and 19 and 23 percent, respectively, of net
sales for 1997. No other customer accounted for more than 10 percent of net     
sales in any of the three years ended December 31, 1997.                        

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TWINLAB CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

 The Company's customers are primarily large independent distributors of
health food products. At December 31, 1996 and 1997, approximately 64 and 58    
percent, respectively, of accounts receivable related to two customers.         

14.  CONDENSED AND SUMMARIZED FINANCIAL INFORMATION                             

   As noted in Note 8b, the Revolving Credit Facility and the Note Indenture
restrict the payment of dividends and the making of loans, advances, or other   
distributions to Twinlab, except in certain limited circumstances. After giving 
retroactive effect, in a manner similar to a pooling of interests, to the merger
of the Companies pursuant to the Acquisition, the condensed financial           
information of Twinlab, on a stand-alone basis, is as follows (because Twinlab  
had no cash prior to the consummation of the Acquisition, no condensed statement
of cash flows is presented for the year ended December 31, 1995):               

                                                                [Download Table]

CONDENSED BALANCE SHEETS                                        1996        1997    
------------------------                                      ---------   --------- 
                                                                                    
ASSETS                                                                              
Cash........................................................  $     162   $     169 
Investment in subsidiaries..................................      1,526      30,175 
                                                              ---------   --------- 
                                                              $   1,688   $  30,344 
                                                              =========   ========= 
SHAREHOLDERS' EQUITY                                                                
Preferred stock, $.01 par value; 2,000,000 shares                                   
  authorized; none issued...................................  $      --   $      -- 
Common stock ($1.00 par value; 75,000,000 shares authorized;                        
  27,000,000 and 27,320,100 shares outstanding,                                     
  respectively).............................................     27,000      27,320 
Additional paid-in capital..................................    141,338     147,003 
Accumulated deficit.........................................   (166,650)   (143,979)
                                                              ---------   --------- 
                                                              $   1,688   $  30,344 
                                                              =========   ========= 

                                                                [Download Table]

CONDENSED STATEMENTS OF INCOME                          1995     1996     1997  
------------------------------                         -------  -------  -------
                                                                                
Equity interest in net income of subsidiaries......... $30,224  $11,742  $22,856
Interest income.......................................      --       54        7
                                                       -------  -------  -------
Income before provision for income taxes..............  30,224   11,796   22,863
Provision for income taxes............................      --       --      192
                                                       -------  -------  -------
Net income............................................ $30,224  $11,796  $22,671
                                                       =======  =======  =======

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TWINLAB CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

                                                                [Download Table]

CONDENSED STATEMENTS OF CASH FLOWS                             1996        1997   
----------------------------------                           ---------   -------- 
                                                                                  
CASH FLOWS FROM OPERATING ACTIVITIES:                                             
  Net income................................................ $  11,796   $ 22,671 
                                                             ---------   -------- 
CASH FLOWS FROM INVESTING ACTIVITIES:                                             
  Equity investment in subsidiaries.........................   119,771    (19,064)
                                                             ---------   -------- 
CASH FLOWS FROM FINANCING ACTIVITIES:                                             
  Purchase of business, net of cash acquired................        --     (3,726)
  Proceeds from issuance of Preferred Stock.................    67,000         -- 
  Dividends on Preferred Stock..............................    (4,862)        -- 
  Distributions to shareholders.............................    (8,929)        -- 
  Redemption of Preferred Stock.............................   (67,000)        -- 
  Issuance of common stock..................................     5,500        126 
  Repurchase of shareholders' common stock and                                    
     recapitalization.......................................  (216,780)        -- 
  Proceeds from initial public offering of common stock.....    93,666         -- 
                                                             ---------   -------- 
          Net cash used in financing activities.............  (131,405)    (3,600)
                                                             ---------   -------- 
Net increase in cash........................................       162          7 
Cash at beginning of year...................................        --        162 
                                                             ---------   -------- 
Cash at end of year......................................... $     162   $    169 
                                                             =========   ======== 

Twin is a direct wholly-owned subsidiary of Twinlab. ARP and Changes  
International are indirect wholly-owned subsidiaries of Twinlab. Twinlab, ARP   
and Changes International have provided joint and several full and unconditional
senior subordinated guarantees of the senior subordinated notes of Twin (see    
Note 8b).                                                                       

     The assets, results of operations and shareholders' equity of Twin comprise
substantially all of the assets, results of operations and shareholders' equity 
of Twinlab on a consolidated basis. Twinlab has no separate operations and has  
no significant assets other than Twinlab's investment in Twin and, through Twin,
in ARP and Changes International. Twin has no direct or indirect subsidiaries   
other than ARP and Changes International; Twin has no other stockholder than    
Twinlab. Accordingly, the Company has determined that separate financial        
statements of Twin, ARP and Changes International would not be material to      
investors and, therefore, are not included herein.                              

Summarized financial information of Twin is as follows:               

                                                                [Download Table]

                                                      1995      1996      1997  
                                                    --------  --------  --------
                                                                                
Current assets..................................... $ 58,663  $ 68,100  $ 88,077
Noncurrent assets..................................   16,646    74,979    83,079
Current liabilities................................   14,233    39,426    44,825
Noncurrent liabilities.............................    5,671   100,423   100,245
Shareholder's equity...............................   55,405     3,230    26,086
Net sales..........................................  148,735   170,075   213,229
Gross profit.......................................   58,803    70,248    92,282
Net income.........................................   30,224    11,742    22,856

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

Summarized financial information of ARP is as follows:                

                                                                [Download Table]

                                               1995        1996        1997  
                                             --------    --------    --------
                                                                             
Current assets.............................  $  1,266    $  1,577    $  1,399
Noncurrent assets..........................       168         182         193
Current liabilities........................     1,211       1,200         568
Noncurrent liabilities.....................        --          --          --
Shareholder's equity.......................       223         559       1,024
Net sales..................................     5,200       5,862       5,661
Gross profit...............................       259         886       1,329
Net income (loss)..........................      (128)        392         465

  Summarized financial information of Changes International is as follows:

                                                                [Download Table]

                                                               1997  
                                                              -------
                                                                     
Current assets..............................................  $ 4,005
Noncurrent assets...........................................   13,026
Current liabilities.........................................    3,010
Noncurrent liabilities......................................       --
Shareholder's equity........................................   14,021
Net sales...................................................    7,037
Gross profit................................................    5,854
Net income..................................................      273

15.  SUBSEQUENT EVENTS (UNAUDITED)                                              

    a. PROPOSED PUBLIC OFFERING -- In February 1998, the Company determined to
work towards a proposed public offering of the Company's common stock (the      
"Offering") on a firm commitment basis. The proposed Offering contemplates that 
a total of 8,000,000 shares of common stock will be offered to the public, of   
which 4,000,000 shares will be sold by certain of the Company's stockholders.   
The net proceeds to the Company from the Offering are estimated to be           
approximately $139,400. Of the net proceeds to the Company, approximately       
$56,500 will be used to pay the purchase price for the Bronson Acquisition (as  
defined in Note 15.b.), including related fees and expenses; approximately      
$40,100 will be used to exercise the Company's option to redeem $35,000 of the  
senior subordinated notes at a redemption price of 109 1/2 percent, plus accrued
and unpaid interest; and approximately $9,900 will be used to reduce outstanding
borrowings under the Revolving Credit Facility, including accrued and unpaid    
interest. The remaining net proceeds to the Company will be used for working    
capital and other general corporate purposes.                                   

   b. POTENTIAL ACQUISITION -- On March 17, 1998, the Company entered into a
definitive agreement to acquire substantially all of the assets and assume      
certain liabilities of the Bronson division ("Bronson") of Jones Medical        
Industries, Inc. (the "Bronson Acquisition"). The Company expects that the      
closing of the Bronson Acquisition will occur during the second quarter of      
fiscal 1998. Bronson's net sales and operating income for the fiscal year ended 
December 31, 1997, were approximately $32,105, and $9,505, respectively. The    
purchase price is $55,000 in cash (excluding related fees and expenses), subject
to certain adjustments, which the Company intends to finance with a portion of  
the net proceeds of the Offering. In the event the Offering is not consummated, 
the Company would seek to amend its Revolving Credit Facility to increase the   
permitted borrowings and to finance the Bronson Acquisition with borrowings     
thereunder.                                                                     

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TWINLAB CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
(DOLLAR AMOUNTS ARE IN THOUSANDS OF DOLLARS)

 c. STOCK OPTION PLAN -- In January 1998, the Board approved, subject to
approval at the Company's 1998 annual meeting of stockholders, a new stock      
option plan providing for the issuance of options to purchase up to 1,000,000   
shares of common stock.                                                         

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======================================================                          

NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY     
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS   
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT  
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING            
STOCKHOLDERS OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER  
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SHARES BY ANYONE IN ANY 
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH 
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. UNDER NO      
CIRCUMSTANCES SHALL THE DELIVERY OF THIS PROSPECTUS OR ANY SALE MADE PURSUANT TO
THIS PROSPECTUS CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED IN THIS   
PROSPECTUS IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF THIS PROSPECTUS. 

------------------

TABLE OF CONTENTS 

                                                                [Download Table]

                                         PAGE
                                         ----
                                             
Additional Information.................    3 
Incorporation of Certain Information By      
  Reference............................    4 
Prospectus Summary.....................    5 
Summary Historical Financial Data......   11 
Risk Factors...........................   13 
Price Range of Common Stock............   19 
Use of Proceeds........................   19 
Dividend Policy........................   20 
Capitalization.........................   20 
Selected Historical Financial Data.....   21 
Management's Discussion and Analysis of      
  Financial Condition and Results of         
  Operations...........................   23 
Business...............................   28 
Management.............................   43 
Principal and Selling Stockholders.....   46 
Description of Certain Indebtedness....   48 
Description of Capital Stock...........   50 
Shares Eligible for Future Sale........   51 
Certain United States Federal Tax            
  Consequences to Non-United States          
  Holders..............................   52 
Underwriting...........................   55 
Legal Matters..........................   57 
Experts................................   57 
Index to Consolidated Financial              
  Statements...........................  F-1 

======================================================                          
======================================================                          
8,000,000 SHARES

[TWINLAB LOGO]
COMMON STOCK
----------------------- 

PROSPECTUS
----------------------- 
Joint Book-Running Managers 

BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION                                
------------------
ADAMS, HARKNESS & HILL, INC.
LEHMAN BROTHERS 
SALOMON SMITH BARNEY
APRIL 7, 1998 
======================================================                          

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