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U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 (Amendment No. 1)
  þ
    
    ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2008
 OR
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No. 000-30518
 GENELINK, INC.
  Pennsylvania
State of Incorporation
    
    23-2795613
I.R.S. Employer I.D. No.
 317 Wekiva Springs Road, #200
Longwood, FL 32779    (800) 588-4363
 None
 Common Stock, $.01 Par Value
  o þ
  o þ
  þ o
  o o
 o
 12b-2
 Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
  o þ




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TABLE OF CONTENTS
 
 ITEM 1. DESCRIPTION OF BUSINESS
    
    
    2ITEM 1A. RISK FACTORS
    
    
    10ITEM 1B. UNRESOLVED STAFF COMMENTS
    
    
    21ITEM 2. PROPERTIES
    
    
    21ITEM 3. LEGAL PROCEEDINGS
    
    
    21ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
    
    
    23ITEM 5. MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
    
    
    24ITEM 6. SELECTED FINANCIAL DATA
    
    
    27ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
    
    
    27ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    35ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTS
    
    
    35ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
    
    
    64ITEM 9A. CONTROLS AND PROCEDURES
    
    
    64ITEM 9B. OTHER INFORMATION
    
    
    65ITEM 10. DIRECTORS; EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
    
    
    66ITEM 11. EXECUTIVE COMPENSATION
    
    
    72ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
    
    
    80ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
    
    
    82ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    82ITEM 15. EXHIBITS
    
    
    83Exhibit 3.1Exhibit 10.1Exhibit 21Exhibit 31.1Exhibit 32.1




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FORWARD LOOKING STATEMENTS
   1




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GENERAL
    TM ®
     2




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Oxidative Stress Profiles
     Oxidative Stress for Skin Health and Skin Aging Profile
     3




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Other SNP Profiles Developed by the Company
    Intellectual Property
 ®
 ®
  4




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® ®
  ® ® ® ®
 Scientific Advisory Board
  GeneWize Life Sciences, Inc.
  
  
  5




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Affiliates and Licensing and Distribution Partners
     6




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State and Federal Regulation
       7




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Federal Trade Commission Regulations
  FDA Regulation of Nutritional Supplements
   8




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Privacy Protection and HIPAA
  Dermagenetics
   9




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DNA Banking
  Competition
   
   IF OUR FORMER CHIEF EXECUTIVE OFFICER PREVAILS WITH RESPECT TO HIS LITIGATION AGAINST US, WE MAY
NOT BE ABLE TO PAY ANY JUDGMENT AND COULD BE FORCED TO CEASE OUR OPERATIONS.
    10




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WE NEED TO RAISE ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE, TO CONTINUE OUR OPERATIONS.
   
    
    the successful commercialization of our existing products and services;
    
    progress in our product development efforts;
    
    progress with regulatory affairs activities;
    
    the growth and success of effective sales and marketing activities;
    
    the cost of filing, prosecuting, defending and enforcing patent claims and other
intellectual property rights; and
    
    the development of strategic alliances for the marketing of our products.
   11




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THE GLOBAL ECONOMIC DOWNTURN COULD RESULT IN A REDUCED DEMAND FOR OUR PRODUCTS AND INCREASED
VOLATILITY IN OUR STOCK PRICE.
    CHANGES IN CREDIT CARD ASSOCIATION AND DEBIT NETWORK FEES OR PRODUCTS COULD INCREASE COSTS OR
OTHERWISE LIMIT OUR OPERATIONS.
  INCREASED HOLDBACKS BY CREDIT CARD PROCESSORS MAY ADVERSELY AFFECT OUR CASH FLOW AND FINANCIAL
CONDITION.
   12




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GENELINK AND ITS SUBSIDIARIES MAY BECOME AFFECTED BY LAWS, GOVERNMENTAL REGULATIONS, ADMINISTRATIVE
DETERMINATIONS, COURT DECISIONS AND SIMILAR CONSTRAINTS WHICH COULD MAKE COMPLIANCE COSTLY AND
SUBJECT GENELINK AND ITS SUBSIDIARIES TO ENFORCEMENT ACTIONS BY GOVERNMENTAL AGENCIES.
      13




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WE ARE SUBJECT TO GOVERNMENT REGULATION, WHICH MAY SIGNIFICANTLY INCREASE OUR COSTS AND DELAY
INTRODUCTION OF FUTURE PRODUCTS.
  WE HAVE A HISTORY OF LOSSES AND MAY HAVE CONTINUED LOSSES FOR THE FORESEEABLE FUTURE.
  OUR BUSINESS CURRENTLY DEPENDS PRIMARILY ON THE SUCCESS OF PRODUCT SALES AND OUR TECHNOLOGY
LICENSING PROGRAM, WHICH IF UNSUCCESSFUL, WILL THREATEN OUR SURVIVAL.
   14




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OUR COMMON STOCK PRICE IS VOLATILE AND WE HAVE A THIN TRADING MARKET.
  WE EXPECT FUTURE DILUTION TO SHAREHOLDERS AND INVESTORS.
   15




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OUR LIMITED OPERATING HISTORY AND RECENT CHANGE IN MARKETING STRATEGY MAKE IT DIFFICULT TO EVALUATE
OUR PROSPECTS.
  IF ETHICAL AND OTHER CONCERNS SURROUNDING THE USE OF GENETIC INFORMATION BECOME WIDESPREAD, WE MAY
HAVE LESS DEMAND FOR OUR PRODUCTS.
  DUE TO THE HIGH LEVEL OF COMPETITION IN OUR INDUSTRY, WE MIGHT FAIL TO RETAIN OUR CUSTOMERS AND
DISTRIBUTORS, WHICH WOULD HARM OUR FINANCIAL CONDITION AND OPERATING RESULTS.
   16




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THE MARKET FOR OUR PRODUCTS AND SERVICES IS UNPROVEN.
  NEW PRODUCTS MAY RENDER OUR PRODUCTS OBSOLETE AND OUR SALES MAY SUFFER.
  THE SALE OF OUR PRODUCTS INVOLVES PRODUCT LIABILITY AND RELATED RISKS THAT COULD EXPOSE US TO
SIGNIFICANT INSURANCE AND LOSS EXPENSES.
     17




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WE ARE DEPENDENT ON A LIMITED NUMBER OF INDEPENDENT SUPPLIERS, LABORATORIES AND MANUFACTURERS OF
OUR PRODUCTS.
   WE ARE DEPENDENT ON KEY PERSONNEL.
  OUR BUSINESS COULD BE ADVERSELY AFFECTED IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY OR
SOMEONE CLAIMS THAT WE ARE INFRINGING ON THEIR PROPRIETARY TECHNOLOGY.
   18




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INTERRUPTIONS TO OR FAILURE OF OUR INFORMATION PROCESSING SYSTEMS MAY DISRUPT OUR BUSINESS AND OUR
SALES MAY SUFFER.
  THE FAILURE TO RECRUIT, MAINTAIN AND MOTIVATE A LARGE BASE OF PRODUCTIVE INDEPENDENT DISTRIBUTORS
COULD LIMIT GENEWIZES ABILITY TO GENERATE REVENUES.
   19




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ADVERSE PUBLICITY ASSOCIATED WITH GENEWIZES PRODUCTS, INGREDIENTS OR NETWORK MARKETING PROGRAM, OR
THOSE OF SIMILAR COMPANIES, COULD HARM GENEWIZES FINANCIAL CONDITION AND OPERATING RESULTS.
  WE ARE SUBJECT TO, AMONG OTHER THINGS, REQUIREMENTS REGARDING THE EFFECTIVENESS OF INTERNAL CONTROL
OVER FINANCIAL REPORTING AND OUR FAILURE TO IDENTIFY OR CORRECT DEFICIENCIES AND AREAS OF WEAKNESS
IN THE COURSE OF THESE AUDITS COULD ADVERSELY AFFECT OUR FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
   20




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OUR ARTICLES OF INCORPORATION AND BYLAWS COULD DELAY OR DISCOURAGE A TAKEOVER ATTEMPT.
  
   
   
   John R. DePhillipo v. Robert P. Ricciardi
  21




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John R. DePhillipo v.
GeneLink, Inc.,
  
 DePhillipo, et.al. v. GeneLink, Inc. t/a GeneLink Biosciences, Inc., et. al.
 
   22




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23




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2008
    
    High
    
    
    Low1st Quarter
    
    $
    0.12
    
    
    $
    0.072nd Quarter
    
    
    0.53
    
    
    
    0.073rd Quarter
    
    
    0.56
    
    
    
    0.224th Quarter
    
    
    0.35
    
    
    
    0.10
 2007
    
    High
    
    
    Low1st Quarter
    
    $
    0.07
    
    
    $
    0.052nd Quarter
    
    
    0.11
    
    
    
    0.043rd Quarter
    
    
    0.20
    
    
    
    0.094th Quarter
    
    
    0.21
    
    
    
    0.08
    24




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EQUITY COMPENSATION PLAN INFORMATION
 Number ofsecurities remainingavailable for futureNumber of
    
    
    
    
    
    
    issuance undersecurities to be
    
    
    
    
    
    
    equityissued upon exercise
    
    
    Weighted-average
    
    
    compensation plansof outstanding
    
    
    exercise price of
    
    
    (excluding securitiesoptions, warrants
    
    
    outstanding options
    
    
    reflected in columnand rights
    
    
    warrants and rights
    
    
    (a))Plan Category
    
    (a)
    
    
    (b)
    
    
    (c)Equity
compensation
plans approved
by security
holders1
    
    
    5,850,000
    
    
    $
    0.19
    
    
    
    150,000Equity
compensation
plans not
approved
by security
holders
    
    
    10,437,499
    
    
    $
    0.21
    
    
    
    0Total
    
    
    16,287,499
    
    
    $
    0.20
    
    
    
    150,000
 
 1
    
    Granted pursuant to the Companys 2007 Stock Option Plan RECENT SALES OF UNREGISTERED SECURITIES.
     25




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Number of
    
    Original Exercise Price
    
    
    RevisedExisting Warrants
    
    of Existing Warrants
    
    
    Exercise Price7,346,577
    
    $0.075-$0.10
    
    
    $0.054,872,704
    
    $0.20-$0.25
    
    
    $0.062,755,500
    
    $0.40-$0.50
    
    
    $0.082,246,250
    
    $0.60-$1.00
    
    
    $0.09
  John R. DePhillipo v. GeneLink, Inc.
  1 4
     26




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You should read the following discussion and analysis in conjunction with our consolidated
financial statements and related notes in Item 8 in this Annual Report on Form 10-K.
 Overview
   Results of Operations
  Assets
   27




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Liabilities
  Equity
  Revenues
    28




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Cost of Goods Sold
  Expenses
  Losses
   Assets.
  29




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Liabilities
 Losses
 Revenues.
 Expenses.
  30




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Segment Operating Results
  GeneLink
    
    
    Dermagenetics
    
    
    GeneWize LifeInc.
    
    
    Inc.
    
    
    Sciences, Inc.Net Revenues
    
    $
    291,206
    
    
    $
    29,738
    
    
    $
    6,056,499Operating expenses
    
    
    1,973,028
    
    
    
    40,113
    
    
    
    6,980,049Other income
    
    
    12,238
    
    
    
    
    
    
    
    Pre-tax earnings (loss)
    
    
    (1,669,584
    )
    
    
    (10,375
    )
    
    
    (923,550
    )
  GeneLink
    
    
    DermageneticsInc.
    
    
    Inc.Net Revenues
    
    $
    30,458
    
    
    $
    67,286Operating expenses
    
    
    1,479,300
    
    
    
    190,648Other income
    
    
    10,956
    
    
    
    624Pre-tax earnings (loss)
    
    
    (1,437,886
    )
    
    
    (122,738
    )
 Liquidity and Capital Resources
    31




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Cash and Cash Equivalents
     32




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Critical Accounting Policies
 Stock options:
  Intangible assets and amortization of patents:
  Revenue and cost recognition:
      33




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Allowance for sales returns and allowances:
   Accounts receivable:
  Use of Estimates:
   34




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INDEX TO FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    36Financial StatementsConsolidated Balance Sheets
    
    
    37-38Consolidated Statements of Operations
    
    
    39Consolidated Statements of Changes in Stockholders Equity
(Deficiency)
    
    
    40Consolidated Statements of Cash Flows
    
    
    41-42Notes to Consolidated Financial Statements
    
    
    43-63
  35




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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
  36




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GENELINK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 December 31, 2008 and 2007
 ASSETS
 2008
    
    
    2007CURRENT ASSETSCash and cash equivalents
    
    $
    435,197
    
    
    $
    972,371Accounts receivable
    
    
    713,565
    
    
    
    35,327Inventory
    
    
    739,515
    
    
    
    3,646Prepaid expenses
    
    
    53,688
    
    
    
    11,273Total current assets
    
    
    1,941,965
    
    
    
    1,022,617PROPERTY AND EQUIPMENT
    
    
    281,984
    
    
    
    38,476OTHER ASSETS
    
    
    321,277
    
    
    
    322,731Total assets
    
    $
    2,545,226
    
    
    $
    1,383,824
   37




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GENELINK, INC. AND SUBSIDIARIES
 
 LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIENCY)
December 31, 2008 and 2007
 2008
    
    
    2007CURRENT LIABILITIESCurrent maturity of long-term debt
    
    $
    60,269
    
    
    $
    0Accounts payable and accrued expenses
    
    
    2,034,322
    
    
    $
    439,399Accrued compensation
    
    
    218,664
    
    
    
    144,168Deferred revenue
    
    
    161,727
    
    
    
    100,922Loans payable
    
    
    18,000
    
    
    
    18,000Total current liabilities
    
    
    2,492,982
    
    
    
    702,489Convertible secured promissory notes payable, net of
debt issuance and stock conversion discounts
    
    
    0
    
    
    
    487,968Total liabilities
    
    
    2,492,982
    
    
    
    1,190,457STOCKHOLDERS EQUITY (DEFICIENCY)Common stock, par value $0.01 per share; authorized:125,000,000 and 75,000,000 shares as of December 31,
2008 and 2007, respectively; issued: 104,561,291 and
66,673,591 shares as of December 31, 2008 and 2007,
respectively; outstanding: 100,202,132 and 66,267,422
shares as of December 31, 2008 and 2007, respectively
    
    
    1,045,613
    
    
    
    666,736Additional paid in capital
    
    
    12,235,833
    
    
    
    8,277,692Stock warrants
    
    
    2,608,240
    
    
    
    4,245,692Accumulated deficit
    
    
    (15,285,207
    )
    
    
    (12,681,698
    )Treasury stock, 4,359,159 and 406,169 shares as of
December 31, 2008 and 2007, respectively, at cost
    
    
    (552,235
    )
    
    
    (315,055
    )Total stockholders equity (deficiency)
    
    
    52,244
    
    
    
    193,367Total liabilities and stockholders equity (deficiency)
    
    $
    2,545,226
    
    
    $
    1,383,824
   38




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GENELINK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
Years Ended December 31, 2008 and 2007
 2008
    
    
    2007Revenues:
    
    $
    6,377,443
    
    
    $
    97,744Cost of goods sold:
    
    
    1,812,488
    
    
    
    70,809Gross profit
    
    
    4,564,955
    
    
    
    26,935Expenses:Selling, general and administrative
    
    
    6,749,406
    
    
    
    1,268,022Research and development
    
    
    48,950
    
    
    
    24,4006,798,356
    
    
    
    1,292,422OPERATING LOSS
    
    
    (2,233,401
    )
    
    
    (1,265,487
    )OTHER EXPENSESDebt conversion costs
    
    
    229,025
    
    
    
    48,053Amortization and depreciation
    
    
    87,053
    
    
    
    58,406Interest expense
    
    
    57,030
    
    
    
    188,678370,108
    
    
    
    295,137NET LOSS BEFORE PROVISION FOR
INCOME TAXES
    
    
    (2,603,509
    )
    
    
    (1,560,624
    )PROVISION FOR INCOME TAXES
    
    
    0
    
    
    
    0NET LOSS
    
    $
    (2,603,509
    )
    
    $
    (1,560,624
    )Loss per share, basic and diluted:
    
    $
    (0.03
    )
    
    $
    (0.03
    )Weighted average common shares and
diluted potential common shares
    
    
    82,530,959
    
    
    
    48,117,402
   39




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GENELINK, INC. AND SUBSIDIARIES
Consolidated Statements of  Changes in Stockholders Equity (Deficiency)
YEARS ENDED DECEMBER 31, 2008 AND 2007
 ADDITIONALCOMMON STOCK
    
    
    TREASURY
    
    
    PAID IN
    
    
    STOCK
    
    
    ACCUMULATEDSHARES
    
    
    AMOUNT
    
    
    STOCK
    
    
    CAPITAL
    
    
    WARRANTS
    
    
    DEFICIT
    
    
    TOTALBalance, December 31, 2006
    
    
    41,739,000
    
    
    $
    417,390
    
    
    $
    (315,055
    )
    
    $
    7,148,427
    
    
    $
    3,011,009
    
    
    $
    (11,121,074
    )
    
    $
    (859,303
    )Issuance of common stock and stock warrants
related to convertible secured promissory
notes
    
    
    687,500
    
    
    
    6,875
    
    
    
    
    
    
    
    22,163
    
    
    
    
    
    
    
    
    
    
    
    29,038Conversion of secured promissory notes and
accrued interest to common stock
    
    
    5,093,024
    
    
    
    50,931
    
    
    
    
    
    
    
    203,722
    
    
    
    
    
    
    
    
    
    
    
    254,653Stock conversion discount related to
convertible secured promissory notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,500
    
    
    
    
    
    
    
    
    
    
    
    27,500Issuance of common stock and stock warrants
for fundraising services
    
    
    68,750
    
    
    
    688
    
    
    
    
    
    
    
    (447,731
    )
    
    
    447,043
    
    
    
    
    
    
    
    Issuance of common stock and warrants
pursuant to private placement offering
    
    
    19,085,329
    
    
    
    190,852
    
    
    
    
    
    
    
    970,306
    
    
    
    270,240
    
    
    
    
    
    
    
    1,431,398Issuance of stock warrants as payment of
accrued compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    508,617
    
    
    
    154,000
    
    
    
    
    
    
    
    662,617Commissions paid for fundraising costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (155,312
    )
    
    
    
    
    
    
    
    
    
    
    (155,312
    )Issuance of stock warrants for services
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    363,400
    
    
    
    
    
    
    
    363,400Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,560,624
    )
    
    
    (1,560,624
    )24,934,603
    
    
    
    249,346
    
    
    
    
    
    
    
    1,129,265
    
    
    
    1,234,683
    
    
    
    (1,560,624
    )
    
    
    1,052,670Balance, December 31, 2007
    
    
    66,673,603
    
    
    
    666,736
    
    
    
    (315,055
    )
    
    
    8,277,692
    
    
    
    4,245,692
    
    
    
    (12,681,698
    )
    
    
    193,367Purchase of treasury stock from former officer
    
    
    
    
    
    
    
    
    
    
    (237,180
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (237,180
    )Fair value of vested stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    384,081
    
    
    
    
    
    
    
    384,081Conversion of secured promissory notes and
accrued interest to common stock
    
    
    17,640,813
    
    
    
    176,408
    
    
    
    
    
    
    
    705,633
    
    
    
    
    
    
    
    
    
    
    
    882,041Exercise of stock warrants
    
    
    11,711,527
    
    
    
    117,119
    
    
    
    
    
    
    
    2,611,403
    
    
    
    (2,021,533
    )
    
    
    
    
    
    
    706,989Common stock issued for cash, net
    
    
    8,535,000
    
    
    
    85,350
    
    
    
    
    
    
    
    641,105
    
    
    
    
    
    
    
    
    
    
    
    726,455Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,603,509
    )
    
    
    (2,603,509
    )37,887,340
    
    
    
    378,877
    
    
    
    (237,180
    )
    
    
    3,958,141
    
    
    
    (1,637,452
    )
    
    
    (2,603,509
    )
    
    
    (141,123
    )Balance, December 31, 2008
    
    
    104,560,943
    
    
    
    1,045,613
    
    
    
    (552,235
    )
    
    
    12,235,833
    
    
    
    2,608,240
    
    
    
    (15,285,207
    )
    
    
    52,244
   40




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GENELINK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Years Ended December 31, 2008 and 2007
 2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (2,603,509
    )
    
    $
    (1,560,624
    )Adjustments to reconcile net loss to net cash used in
operating activities:Loss on abandonment of leasehold improvements
    
    
    0
    
    
    
    62,420Depreciation and amortization
    
    
    87,053
    
    
    
    58,406Amortization of discounts on loans payable
    
    
    240,844
    
    
    
    140,196Fair value of options granted for services
    
    
    384,081
    
    
    
    363,400Changes in assets and liabilities:Accounts receivable
    
    
    (678,238
    )
    
    
    (3,142
    )Inventory
    
    
    (735,869
    )
    
    
    2,126Prepaid expenses
    
    
    (42,415
    )
    
    
    3,148Other assets
    
    
    13,700
    
    
    
    (44,801
    )Deferred revenue
    
    
    60,805
    
    
    
    85,441Accounts payable and accrued expenses
    
    
    1,748,152
    
    
    
    91,882Accrued compensation
    
    
    74,496
    
    
    
    96,462Net cash used in operating activities
    
    
    (1,450,900
    )
    
    
    (705,086
    )CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures
    
    
    (244,393
    )
    
    
    (6,633
    )Patent acquisition costs
    
    
    (37,015
    )
    
    
    (84,194
    )Net cash used in investing activities
    
    
    (281,408
    )
    
    
    (90,827
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from loans and notes payable
    
    
    54,582
    
    
    
    272,462Proceeds from issuance of common stock and
warrants, net
    
    
    726,455
    
    
    
    1,431,400Purchase of treasury stock
    
    
    (237,180
    )
    
    
    0Proceeds from exercise of stock warrants
    
    
    706,989
    
    
    
    0Principal payments on capital lease obligations
    
    
    (25,222
    )
    
    
    0Principal payments on note payable
    
    
    (30,490
    )
    
    
    0Common stock issued for bridge loans conversion
    
    
    0
    
    
    
    70,038Commissions paid for fundraising costs
    
    
    0
    
    
    
    (155,311
    )Net cash provided by financing activities
    
    
    1,195,134
    
    
    
    1,618,589
   41




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GENELINK, INC. AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended December 31, 2008 and 2007
 2008
    
    
    2007NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS
    
    
    (537,174
    )
    
    
    822,676CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
    
    972,371
    
    
    
    149,695CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    435,197
    
    
    $
    972,371SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATIONCash payments for:Interest:
    
    $
    2,988
    
    
    
    0Non-cash financing transactions:Stock options and warrants granted for services
    
    $
    303,616
    
    
    $
    363,400Common stock and warrants granted for fundraising
    
    $
    80,465
    
    
    $
    450,731Conversion of secured promissory notes into
common stock
    
    $
    487,968
    
    
    $
    0
   42




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##### Table of Contents



GENELINK, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 YEARS ENDED DECEMBER 31, 2008 AND 2007
 Note 1. Organization
   ®
 TM ®
   43




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Note 2. Summary of Significant Accounting Policies
 Principles of consolidation:
  Use of estimates:
  Cash and cash equivalents:
  Property and equipment:
   44




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Revenue and cost recognition:
        45




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Allowance for Sales Returns and Allowances:
   Accounts Receivable:
  Intangible Assets and Amortization of Patents:
 ® ®
 Research and Development:
   46




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##### Table of Contents



Inventory:
  Income taxes:
  Long lived assets:
  Per share data:
   47




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Stock-Based Compensation:
 Share-Based Payment
 Recent Accounting Pronouncements:
 Fair Value Measurements
 The Fair Value Option for Financial
Assets and Financial Liabilities-Including an amendment of FASB Statement No. 115
   48




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##### Table of Contents



Reclassifications:
  Note 3. Property and Equipment
  2008
    
    
    2007Office furniture and equipment
    
    $
    82,803
    
    
    $
    50,598Equipment
    
    
    143,421
    
    
    
    8,050Leasehold improvements
    
    
    6,781
    
    
    
    0Software
    
    
    234,147
    
    
    
    102,712467,152
    
    
    
    161,360Less accumulated depreciation
and amortization
    
    
    185,168
    
    
    
    122,884$
    281,984
    
    
    $
    38,476
   49




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##### Table of Contents



Note 4. Other Assets
  2008
    
    
    2007Patents and trademarks
    
    $
    394,485
    
    
    $
    357,470Deposits
    
    
    31,101
    
    
    
    41,001Less accumulated
amortization
    
    
    104,309
    
    
    
    79,540$
    321,277
    
    
    $
    318,931
   Year endingDecember 31,2009
    
    $
    27,1992010
    
    
    27,1992011
    
    
    27,1992012
    
    
    27,1992013
    
    
    27,199Thereafter
    
    
    258,491$
    394,486
 Note 5. Income Taxes
    50




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##### Table of Contents



Note 6. Stockholders Equity Transactions
 Common Stock
     Number of
    
    Original Exercise Price
    
    
    RevisedExisting Warrants
    
    of Existing Warrants
    
    
    Exercise Price7,346,577
    
   $0.075-$0.10
    
    
    $0.054,872,704
    
   $0.20-$0.25
    
    
    $0.062,755,500
    
   $0.40-$0.50
    
    
    $0.082,246,250
    
   $0.60-$1.00
    
    
    $0.09
  John R. DePhillipo v. GeneLink, Inc.
  51




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1 4
       Stock Options and Warrants
   52




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Number of
    
    Original Exercise Price
    
    RevisedExisting Warrants
    
    of Existing Warrants
    
    Exercise Price7,346,577
    
    $0.075-$0.10
    
    $
    0.054,872,704
    
    $0.20-$0.25
    
    $
    0.062,755,500
    
    $0.40-$0.50
    
    $
    0.082,246,250
    
    $0.60-$1.00
    
    $
    0.09
     53




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##### Table of Contents



2008
    
    
    2007Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    Exercise
    
    
    Average
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceOptions/warrants outstanding
at beginning of year
    
    
    31,043,535
    
    
    $
    0.19
    
    
    
    14,992,987
    
    
    $
    0.38Granted
    
    
    7,112,249
    
    
    
    0.37
    
    
    
    17,721,581
    
    
    
    0.08Exercised
    
    
    (12,137,453
    )
    
    
    (0.06
    )
    
    
    
    
    
    
    Expired
    
    
    (2,995,000
    )
    
    
    (0.44
    )
    
    
    (1,671,033
    )
    
    
    (0.80
    )Cancelled
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Options/warrants outstanding
at end of year
    
    
    23,023,331
    
    
    $
    0.17
    
    
    
    31,043,535
    
    
    $
    0.19Options/warrants exercisable
at end of year
    
    
    15,039,162
    
    
    
    
    
    
    
    26,886,035Weighted-average fair value
of options granted during
the year
    
    
    
    
    
    $
    0.38
    
    
    
    
    
    
    $
    0.11
  Weighted-AverageNumber
    
    
    RemainingExercise
    
    Outstanding
    
    
    Contractual Life
    
    
    ExercisablePrice
    
    at 12/31/08
    
    
    (Years)
    
    
    Warrants0.05
    
    
    1,915,000
    
    
    
    2.70
    
    
    
    1,915,0000.075
    
    
    2,310,200
    
    
    
    6.75
    
    
    
    2,310,2000.08
    
    
    8,700,000
    
    
    
    8.58
    
    
    
    6,094,9960.10
    
    
    3,135,633
    
    
    
    4.07
    
    
    
    3,135,6330.12
    
    
    1,800,000
    
    
    
    9.00
    
    
    
    1,075,0000.20
    
    
    375,000
    
    
    
    1.09
    
    
    
    375,0000.25
    
    
    50,000
    
    
    
    0.57
    
    
    
    50,0000.50
    
    
    4,737,498
    
    
    
    9.58
    
    
    
    83,33223,023,331
    
    
    
    
    
    
    
    15,039,162
  Risk free interest rate of return
    
    4.5 - 5%Expected option life
    
    5 - 10 yrs.Expected dividends
    
    $0.00Expected volatility
    
    169 - 170%
  54




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Note 7. Net Loss Per Share
   2008
    
    
    2007Net loss
    
    $
    (2,603,509
    )
    
    $
    (1,560,624
    )Weighted average number of common shares
outstanding for computing basic earning per share
    
    
    82,530,959
    
    
    
    48,117,402Dilutive effect of warrants and stock options after
application of the treasury stock method
    
    
    
    
    
    
    Weighted average number of common shares out-
standing for computing diluted earnings per share
    
    
    82,530,959
    
    
    
    48,117,402Net loss per share  basic and diluted
    
    $
    (0.03
    )
    
    $
    (0.03
    )
  Years Ended December 312008
    
    
    2007Warrants and stock options
    
    
    23,023,331
    
    
    
    31,043,535
 Note 8. Advertising
  Note 9. Rent
   55




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Year endingDecember 31,2009
    
    $
    66,0002010
    
    
    66,000$
    132,000
 Note 10. Related Party Transactions and Convertible Secured Promissory Notes
      56




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Short Term Loans Payable
  2008
    
    
    2007Note payable, due no specific maturity with
no stated interest. All interest and principal
due at maturity
    
    $
    10,000
    
    
    $
    10,000Note payable, no specific maturity with no stated
Interest. All interest and principal
due at maturity
    
    
    8,000
    
    
    
    8,00018,000
    
    
    
    18,000Less: Discount for warrants issued
    
    
    (
    )
    
    
    (
    )Total short term loans payable
    
    $
    18,000
    
    
    $
    18,000
 Employees and Consultants
     57




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Convertible Secured Promissory Notes Payable
  2008
    
    
    2007Notes payable, due May 12, 2011
with interest at 12%. All
interest and principal due at
maturity. All Company assets
pledged as collateral
    
    $
    
    
    
    $
    728,812
    
    
    
    728,812Less: Debt issue discount
    
    
    
    
    
    
    (105,864
    )Less: Stock conversion discount
    
    
    
    
    
    
    (134,980
    )Less: Debt proceeds not received
    
    
    
    
    
    
    Total short term loans payable
    
    $
    
    
    
    $
    487,968
      58




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Note 11. Segment Information
   GeneWize LifeGeneLink
    
    
    Dermagenetics
    
    
    SciencesInc.
    
    
    Inc.
    
    
    Inc.2008Net Revenues
    
    $
    291,206
    
    
    $
    29,738
    
    
    $
    6,056,499Operating expenses
    
    
    1,973,028
    
    
    
    40,113
    
    
    
    6,980,049Other income
    
    
    12,238Pre-tax earnings (loss)
    
    
    (1,669,584
    )
    
    
    (10,375
    )
    
    
    (923,550
    )2007Net Revenues
    
    
    30,458
    
    
    $
    67,286Operating expenses
    
    
    1,479,300
    
    
    
    190,648Other income
    
    
    10,956
    
    
    
    624Pre-tax earnings (loss)
    
    
    (1,437,886
    )
    
    
    (122,738
    )
 Note 12. Going Concern
   59




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Note 13. Commitments and Contingencies
  John R. DePhillipo v. Robert P. Ricciardi
 John R. DePhillipo v.
GeneLink, Inc.,
   60




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DePhillipo, et.al. v. GeneLink, Inc. t/a GeneLink Biosciences, Inc., et. al.
    Note 14. Quarterly Results of Operations (unaudited)
  2008
    
    First
    
    
    Second
    
    
    Third
    
    
    FourthSales
    
    $
    26,424
    
    
    $
    124,503
    
    
    $
    1,829,669
    
    
    $
    4,396,847Gross profit
    
    
    1,104
    
    
    
    15,331
    
    
    
    1,403,963
    
    
    
    3,144,557Net income (loss)
    
    
    (448,250
    )
    
    
    (1,107,479
    )
    
    
    (513,472
    )
    
    
    (534,308
    )Net income (loss)
per
common share
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.005
    )
    
    
    (0.005
    )
 2007
    
    First
    
    
    Second
    
    
    Third
    
    
    FourthSales
    
    $
    31,385
    
    
    $
    27,182
    
    
    $
    26,150
    
    
    $
    13,027Gross profit
    
    
    6,262
    
    
    
    6,935
    
    
    
    14,252
    
    
    
    (514
    )Net income (loss)
    
    
    (359,792
    )
    
    
    (225,196
    )
    
    
    (550,747
    )
    
    
    424,889Net income (loss)
per
common share
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.01
    )
    
    
    (0.01
    )
  61




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Note 15. Subsequent Events
      Note 16. Industry Risk and Concentration
   62




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63




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Evaluation of Disclosure Controls and Procedures
   Change In Internal Controls
   64




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Managements Annual Report on Internal Control over Financial Reporting
    
    65




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Name
    
    Age
    
    PositionDr. Bernard L. Kasten, Jr.
    
    
    63
    
    
    Executive Chairman of the Board,
DirectorMonte E. Taylor, Jr.
    
    
    60
    
    
    Chief Executive Officer, Chief
Financial Officer,
DirectorDouglas M. Boyle
    
    
    42
    
    
    DirectorRobert Hoekstra
    
    
    58
    
    
    DirectorJames Monton
    
    
    63
    
    
    DirectorRobert P. Ricciardi, Ph.D
    
    
    63
    
    
    Secretary, Chief Science Officer,
DirectorJohn H. Souza
    
    
    47
    
    
    Chief Operating Officer, Director
 
 
 
 st st th
  66




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67




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68




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Audit Committee
 
 
 
  
    69




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Nominating Committee
   Section 16(a) Beneficial Ownership Reporting Compliance.
  Code of Ethics.
  Meeting of Directors
  Communications with the Board of Directors
   70




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##### Table of Contents



REPORT FROM THE AUDIT COMMITTEE
     Robert Hoekstra
Dr. Bernard L. Kasten, Jr.  71




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##### Table of Contents



Compensation Discussion and Analysis
  Overview of Compensation Philosophy and Objectives
  
    
    help attract and retain the most qualified individuals by being
competitive with compensation packages paid to persons having similar
responsibilities and duties in comparable businesses;
    
    motivate and reward individuals who help us achieve our short term and
long term objectives and thereby contribute significantly to the
success of our company;
    
    relate to the value created for shareholders by being directly tied to
our financial performance and condition and the particular executive
officers contribution; and
    
    reflect the qualifications, skills, experience, and responsibilities
of the particular executive officer.
    72




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Executive Compensation Components
  Annual Base Salary
  Stock Options and Stock Awards
   Other Benefits
 
    
    Retirement Benefits.We are looking to establish a 401(k) plan for our
employees. Named executive officers would be eligible to participate
in these plans on the same terms as other eligible employees, subject
to any legal limits on the amount that may be contributed by
executives under the plans.
    
    Medical Benefits. Our employees have a choice of coverage options
under our company-sponsored group health insurance plan. Each option
covers the same services and supplies but differs in the quality of
provider network.
    
    Life Insurance. We maintain a group life insurance plan that provides
for basic life and accidental death and dismemberment coverage. We pay
the premiums under this plan.
    
    Vacation. All employees are eligible for vacation based on years of service.
    
    Other Perquisites. Vehicle and car allowances have been provided for
certain named executives.
  73




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Deductibility of Compensation Expenses
  Accounting and Tax Considerations
  REPORT OF COMPENSATION COMMITTEE
   COMPENSATION COMMITTEE
Dr. Bernard L. Kasten, Jr.
Robert Hoekstra  74




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EXECUTIVE COMPENSATION
 SUMMARY COMPENSATION TABLENon-Equity
    
    
    NonqualifiedStock
    
    
    
    
    
    
    Incentive Plan
    
    
    Deferred
    
    
    All OtherName and
    
    
    
    
    
    
    
    
    
    Bonus
    
    
    Awards
    
    
    Option
    
    
    Compensation
    
    
    Compensation
    
    
    Compensationprincipal position
    
    Year
    
    
    Salary ($)
    
    
    ($)
    
    
    ($)
    
    
    Awards ($)
    
    
    ($)
    
    
    Earnings ($)
    
    
    ($)
    
    
    Total ($)(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)
    
    
    (g)
    
    
    (h)
    
    
    (i)
    
    
    (j)Monte E. Taylor, Jr.
    
    
    2008
    
    
    $
    131,442
    
    
    $
    0
    
    
    $
    0
    
    
    $
    57,000
    1
    
    $
    0
    
    
    $
    0
    
    
    $
    9,562
    2
    
    $
    198,004Chief Executive
Officer
    
    
    2007
    
    
    $
    102,500
    
    
    $
    0
    
    
    $
    0
    
    
    $
    158,000
    1
    
    $
    0
    
    
    $
    0
    
    
    $
    13,170
    2
    
    $
    273,670Robert P.
    
    
    2008
    
    
    $
    22,500
    
    
    $
    0
    
    
    $
    0
    
    
    $
    4,000
    3
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    26,500Ricciardi, Ph.D.
Chief Science
Officer
    
    
    2007
    
    
    $
    97,500
    
    
    $
    0
    
    
    $
    0
    
    
    $
    6,000
    3
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    103,500John A. Souza
    
    
    2008
    
    
    $
    91,506
    
    
    $
    0
    
    
    $
    0
    
    
    $
    49,000
    4
    
    $
    0
    
    
    $
    0
    
    
    $
    8,455
    2
    
    $
    148,961Vice President of
Business
Development
    
    
    2007
    
    
    $
    79,500
    
    
    $
    0
    
    
    $
    0
    
    
    $
    102,000
    4
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    181,500Dr. Bernard L.
    
    
    2008
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    29,000
    5
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    29,000Kasten, Jr.
Chairman
    
    
    2007
    
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    75,000
    5
    
    $
    0
    
    
    $
    0
    
    
    $
    0
    
    
    $
    75,000
 
 1
    
    On June 1, 2007, Mr. Taylor received a fully vested warrant to acquire 1,600,00
shares of common stock of an exercise price of $0.08 per share and received options to acquire
1,500,000 shares of common stock at an exercise price of $0.08 per share, which options vest in
four equal annual installments of 375,000 each, commencing June 1, 2007. On May 20, 2008,
Mr. Taylor received options to acquire 350,000 shares of Common Stock at an exercise price of $0.12
per share, of which 225,000 options have vested and 125,000 options vest on May 20, 2009. On
July 28, 2008, Mr. Taylor received options to acquire 1,883,333 shares of Common Stock at a price
of $0.50 per share, of which 516,666 options vest on July 28, 2011, 516,667 options vest on each of
July 28, 2012 and July 28, 2013, and 333,333 options vest upon the Company becoming listed on the
NASDAQ National Market or a national stock exchange.2
    
    Represents the cost of health insurance premiums provided from the Company.3
    
    On June 1, 2007, Dr. Ricciardi received a fully-vested warrant to acquire 25,000
shares of common stock at an exercise price of $0.08 per share and received options to acquire
200,000 shares of common stock at an exercise price of $0.08 per share, which options vest in four
equal annual installments of 50,000 each, commencing June 1, 2007. On September 30, 2007, in
connection with the amendment to Dr. Ricciardis consulting agreement, Dr. Ricciardi received a
fully-vested warrant to acquire 1,400,000 shares of common stock at an exercise price of $0.11 per
share.4
    
    On June 1, 2007, Mr. Souza received a fully vested warrant to acquire 1,000,000
shares of common stock at an exercise price of $0.08 per share, and received options to acquire
1,100,000 shares of common stock at an exercise price of $$0.08 per share, which options vest in
four equal installments of 275,000 each, commencing June 1, 2007. On May 20, 2008, Mr. Souza
received options to acquire 350,000 shares of Common Stock, of which 285,000 options have vested
and 125,000 options vest on May 20, 2009. On July 28, 2008, Mr. Souza received options to acquire
1,483,333 shares of Common Stock of which 383,333 options vest on each of July 28, 2011 and
July 28, 2012, 383,374 options vest on July 28, 2013 and 333,333 options vest upon the Company
becoming listed on the NASDAQ or National Market or national stock exchange.5
    
    On June 1, 2007, Dr. Kasten received a fully-vested amount to acquire 735,000 shares
of Common Stock at an exercise price of $0.08 per share and received options to acquire 850,000
shares of Common Stock at an exercise price of $0.08 per share, which options vest in four equal
annual installments of 282,500 each, commencing June 1, 2007. On May 20, 2008, Dr. Kasten received
a fully-vested option to acquire 100,000 shares of Common Stock at an exercise price of $0.12 per
share. On July 28, 2008, Dr. Kasten received options to acquire 1,120,833 shares of Common Stock
at an exercise price of $0.50 per share, of which 262,500 options vest on each of July 28, 2011,
July 28, 2012 and July 28, 2013, and 333,333 options vest upon the Company becoming listed on the
NASDAQ National Market or a national stock exchange.  75




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Employment Agreements with Executive Officers
     76




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OPTION GRANTS
  GRANTS OF PLAN-BASED AWARDSAllOtherStockAwards:
    
    
    All Other
    
    
    Exercise
    
    
    GrantNumber
    
    
    Option
    
    
    or
    
    
    Dateof
    
    
    Awards:
    
    
    Base
    
    
    FairEstimated Future Payouts Under
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Shares
    
    
    Number of
    
    
    Price
    
    
    Value ofNon-Equity Incentive Plan
    
    
    Estimated Future Payouts Under
    
    
    of
    
    
    Securities
    
    
    of
    
    
    StockAwards
    
    
    Equity Incentive Plan Awards
    
    
    Stocks
    
    
    Underlying
    
    
    Option
    
    
    andThreshold
    
    
    Target
    
    
    Maximum
    
    
    Threshold
    
    
    Target
    
    
    Maximum
    
    
    or Units
    
    
    Options
    
    
    Awards
    
    
    OptionsName
    
    Grant Date
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    (#)
    
    
    (#)
    
    
    ($/sh)
    
    
    Awards(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)
    
    
    (g)
    
    
    (h)
    
    
    (i)
    
    
    (j)
    
    
    (k)
    
    
    (l)Monte E. Taylor, Jr.
    
    May 20, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    350,000
    
    
    $
    0.12
    
    
    $
    0.12July 28, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,883,333
    
    
    $
    0.50
    
    
    $
    0.50John H. Souza
    
    May 20, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    350,000
    
    
    $
    0.12
    
    
    $
    0.12July 28, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,483,333
    
    
    $
    0.50
    
    
    $
    0.50Dr. Bernard L. Kasten, Jr.
    
    May 20, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    $
    0.12
    
    
    $
    0.12July 28, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,120,833
    
    
    $
    0.50
    
    
    $
    0.50
  77




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##### Table of Contents



OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END
 OPTION AWARDSEquity Incentive PlanAwards: Number ofSecuritiesNumber of Securities
    
    
    Number of Securities
    
    
    UnderlyingUnderlying
    
    
    Underlying Unexercised
    
    
    Unexercised
    
    
    Option ExerciseUnexercised Options (#)
    
    
    Options (#)
    
    
    Unearned Options
    
    
    Price
    
    
    Option ExpirationName
    
    Exercisable
    
    
    Unexercisable
    
    
    (#)
    
    
    ($)
    
    
    Date(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)Monte E. Taylor, Jr.
    
    
    2,350,000
    
    
    
    750,000
    (1)
    
    
    0
    
    
    $
    0.08
    
    
    June 1, 2017225,000
    
    
    
    125,000
    (2)
    
    
    0
    
    
    $
    0.12
    
    
    May 20, 20180
    
    
    
    1,883,333
    (3)
    
    
    0
    
    
    $
    0.50
    
    
    July 28, 2018Robert P.
Ricciardi, Ph.D
    
    
    125,000
    
    
    
    100,000
    (4)
    
    
    0
    
    
    $
    0.08
    
    
    June 1, 20171,400,000
    
    
    
    0
    
    
    
    0
    
    
    $
    0.11
    
    
    September 30, 2017John H. Souza
    
    
    1,550,000
    
    
    
    550,000
    (5)
    
    
    0
    
    
    $
    0.08
    
    
    June 1, 2017225,000
    
    
    
    125,000
    (2)
    
    
    0
    
    
    $
    0.12
    
    
    May 20, 20180
    
    
    
    1,483,333
    (6)
    
    
    0
    
    
    $
    0.50
    
    
    July 28, 2018Dr. Bernard L.
Kasten, Jr.
    
    
    1,200,000
    
    
    
    425,000
    (7)
    
    
    0
    
    
    $
    0.08
    
    
    June 1, 2017100,000
    
    
    
    0
    
    
    
    0
    
    
    $
    0.12
    
    
    May 20, 20180
    
    
    
    1,120,833
    (8)
    
    
    0
    
    
    $
    0.50
    
    
    July 28, 2018
 (1)
    
    375,000 options vest on each of June 1, 2009 and
June 1, 2010.(2)
    
    The remaining unvested options vest on May 20, 2009.(3)
    
    516,666 options vest on July 28, 2011, 516,667 options vest on each of July 28,
2012 and July 28, 2013, and 333,333 options vest upon the Company becoming listed on the NASDAQ
National Market or a national stock exchange.(4)
    
    50,000 options vest on each of June 1, 2009 and June 1, 2010.(5)
    
    275,000 options vest on each of June 1, 2009 and June 1, 2010.(6)
    
    383,333 options vest on each of July 28, 2011 and July 28, 2012, 383,334 options
vest on July 28, 2013, and 333,333 options vest upon the Company becoming listed on the NASDAQ
National Market or national stock exchange.(7)
    
    212,500 options vest on each of June 1, 2009 and June 1, 2010.(8)
    
    262,500 options vest on each of July 28, 2011, July 28, 2012 and July 28, 2013, and
333,333 options vest upon the Company becoming listed on the NASDAQ   78




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##### Table of Contents



DIRECTOR COMPENSATION
  DIRECTOR COMPENSATIONChange inPension ValueNon-Equity
    
    
    and NonqualifiedFees
    
    
    Stock
    
    
    Options
    
    
    Incentive Plan
    
    
    Deferred
    
    
    All OtherEarned
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    Compensation
    
    
    Compensation
    
    
    TotalName
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)
    
    
    ($)(a)
    
    (b)
    
    
    (c)
    
    
    (d)
    
    
    (e)
    
    
    (f)
    
    
    (g)
    
    
    (h)Robert Hoekstra
    
    
    0
    
    
    
    0
    
    
    $
    26,000
    (1)
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    $
    26,000
 (1)
    
    On May 20, 2008, Mr. Hoekstra received options to acquire 500,000 shares of Common
Stock, of which 200,000 options vested on May 20, 2008 and 100,000 options vest on each of May 20,
2009, May 20, 2010 and May 20, 2011. Compensation Committee Interlocks and Insider Participation
   79




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##### Table of Contents



PRINCIPAL SHAREHOLDERS
     80




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##### Table of Contents



Number of Shares
    
    
    Approximate PercentageName
    
    Beneficially Owned
    
    
    Of Stock OutstandingChesed
Congregation of America
One State Street Plaza, 29th Floor 
New York, NY 10004
    
    
    10,625,000
    (1)
    
    
    5.9
    %Dr. Bernard L. Kasten, Jr. 
4380 27th Court, SW #104
Naples, FL 34116
    
    
    6,346,192
    (2)
    
    
    4.2
    %Kenneth R. Levine 
2 Oaklawn Road 
Short Hills, NJ 07078
    
    
    6,302,046
    (3)
    
    
    5.9
    %Robert Hoekstra 
317 Wekiva Spring Road, #200
Longwood, Florida 32779
    
    
    4,537,196
    (4)
    
    
    3.9
    %Robert P. Ricciardi, Ph.D.
317 Wekiva Spring Road, #200
Longwood, Florida 32779
    
    
    4,235,000
    (5)
    
    
    3.9
    %John H. Souza 
317 Wekiva Spring Road, #200
Longwood, Florida 32779
    
    
    3,351,331
    (6)
    
    
    3.1
    %Monte E. Taylor, Jr. 
317 Wekiva Spring Road, #200
Longwood, Florida 32779
    
    
    2,727,250
    (7)
    
    
    2.5
    %Directors and Officers as a
Group
    
    
    21,371,971
    (2)(4)(5)(6)(7)
    
    
    18.4
    %
 (1)
    
    Includes 10,000,000 shares of Common Stock issuable upon the conversion of convertible notes.(2)
    
    Includes currently exercisable options and warrants to acquire 2,420,833 shares of Common
Stock.(3)
    
    Includes 6,182,046 shares held directly and 70,000 shares held in a retirement plan. Includes
currently exercisable options and warrants to acquire 50,000 shares of Common Stock.(4)
    
    Includes currently exercisable options and warrants to acquire 620,455 shares of Common Stock.
Includes 1,697,000 shares of Common Stock and warrants to exercise 500,000 shares of Common Stock
held by a family trust for which Mr. Hoekstra is a trustee. Mr. Hoekstra disclaims beneficial
ownership of those shares and warrants.(5)
    
    Includes currently exercisable options and warrants to acquire 1,525,000 shares of Common
Stock.(6)
    
    Includes currently exercisable warrants to acquire 2,506,661 shares of Common Stock.(7)
    
    Include 16,000 shares held by Mr. Taylor and various family members in joint tenancy. Includes
currently exercisable options and warrants to acquire 2,700,000 shares of Common Stock.  81




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##### Table of Contents



Fees for Independent Auditors for Fiscal Years 2008 and 2007
  2008
    
    
    2007Audit Fees
    
    $
    22,000
    
    
    $
    22,000Audit-Related Fees
    
    
    0
    
    
    
    0Tax Fees
    
    
    0
    
    
    
    0All Other Fees
    
    
    0
    
    
    
    0Total Fees
    
    $
    22,000
    
    
    $
    22,000
   82




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##### Table of Contents



(1)
    
    Financial Statements. The financial statements required to be filed are
presented beginning on page 36.
 (2)
    
    Exhibits. The following Exhibits have been filed pursuant to Item 601 of
Regulation S-K.
 
 Exhibit Number
    
    Description3.1
    
    
    Amended Articles of Incorporation10.1
    
    
    Letter Agreement with Robert P. Ricciardi, Ph.D. dated
September 30, 200721
    
    
    Subsidiaries of the Registrant31.1
    
    
    Certification of Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
 
  83




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##### Table of Contents



SIGNATURES
  
 GENELINK, INC.
RegistrantDate:  November 5, 2009
    Monte E. Taylor, Jr.Monte E. Taylor, Jr., Chief Executive Officerand Chief Financial Officer 
  
 Signatures
    
    Capacity
    
    Date/s/ Monte E. Taylor, Jr.

Monte E. Taylor
    
    Principal Executive Officer, Principal Financial Officer,
Principal Accounting Officer and Director
    
    November 5, 2009Douglas Boyle
    
    Director/s/ Robert Hoekstra
    
    Director
    
    November 5, 2009Robert Hoekstra/s/ Bernard L. Kasten, Jr.
    
    Chairman and Director
    
    November 5, 2009Dr. Bernard L. Kasten, Jr.James Monton
    
    Director/s/ Robert P. Ricciardi
    
    Director
    
    November 5, 2009Robert P. Ricciardi, Ph.D./s/ John H. Souza
    
    Director
    
    November 5, 2009John H. Souza
 
  84




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##### Table of Contents



EXHIBIT INDEX
 Exhibit Number
    
    Description3.1
    
    
    Amended Articles of Incorporation10.1
    
    
    Letter Agreement with Robert P. Ricciardi, Ph.D. dated
September 30, 200721
    
    
    Subsidiaries of the Registrant31.1
    
    
    Certification of Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 200232.1
    
    
    Certification pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
  85