I've mentioned it before, but it bears repeating, Battletoads is a tough game. And you can take certain measures to pad your lives a bit, but you'll find out pretty quickly that you need more.
So, make your way to Level 2, the big tree-thing. And find these weird silver bugs with stingers.
They only take one hit to defeat, but they kind of bounce up when you hit them. Hit them again when they bounce off the wall. Then hit them again and again until.
1up!
Once they give up the 1up, they fall down off the bottom of the screen. And you can do this once for each of the bugs that you find in the tree.
Just be warned that the other bugs can sting the one that you're bouncing off the wall and if they get the last hit in, you get nothing.