<PAGE>
                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

                        ANNUAL REPORT FOR THE FISCAL YEAR
                             ENDED DECEMBER 31, 2001

                           COMMISSION FILE NO. 0-28077

                                 GENELINK, INC.
                 ----------------------------------------------
                 (Name of Small Business Issuer in its charter)


<TABLE>
<S>                                                          <C>
               PENNSYLVANIA                                      23-2795613
               ------------                                      ----------
     (State or other jurisdiction of                          (I.R.S. Employee
      incorporation or organization)                         Identification No.)

          100 S. Thurlow Street
           Margate, New Jersey                                      08402
 --------------------------------------                          ----------
(Address of principal executive offices)                         (Zip Code)
</TABLE>

                    ISSUER'S TELEPHONE NUMBER: (609) 823-6991

         Securities registered under Section 12(b) of the Exchange Act

                                      None

          Securities Registered under Section 12(g) of the Exchange Act

                               Title of each class

                          Common Stock, $.01 par value

         Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
<PAGE>
         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure will
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or amendment to this form 10-KSB. [X]



         State issuer's revenues for its most recent fiscal year. $16,930.

         State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the
common equity was sold, or the average bid and asked price of such common
equity, as of a specified date within the past 60 days. (See definition of
affiliate in Rule 12b-2 of the Exchange Act). $7,373,000.

         APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of the latest
practicable date.


                  Number of Shares of Common Stock
                  Outstanding on March 1, 2001                16,856,410

         Transitional Small Business Disclosure Format        Yes ___  No X


         Statements in this Annual Report on Form 10-KSB may constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements involve a number of risks,
uncertainties and other factors that could cause actual results to differ
materially from those projected in such statements.


                                       2
<PAGE>
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
         PART I                                                                                             PAGE
                                                                                                            ----
<S>                        <C>                                                                              <C>
         Item 1.           Business...........................................................................4
         Item 2.           Properties........................................................................14
         Item 3.           Legal Proceedings.................................................................14
         Item 4.           Submission Of Matters To A Vote Of Security Holders...............................14

         PART II

         Item 5.           Market For Registrant's Common Equity And
                           Related Stockholder Matter........................................................15
         Item 6.           Management's Discussion And Analysis Of
                           Financial Condition And Results Of Operations.....................................16
         Item 7.           Financial Statements and Supplementary Data.......................................19
         Item 8.           Changes in and Disagreements With Accountants on Accounting
                           and Financial Disclosure..........................................................40

         PART III

         Item 9.           Directors and Executive Officers of the Registrant ...............................40
         Item 10.          Executive Compensation............................................................40
         Item 11.          Security Ownership of Certain Beneficial Owners and Management....................40
         Item 12.          Certain Relationships and Related Transactions....................................40

         PART IV.

         Item 13.          Exhibits, Financial Statement Schedules, and Reports on Form 8-K..................40
</TABLE>


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<PAGE>
ITEM 1.  DESCRIPTION OF BUSINESS.

GENERAL

         We are a publicly-held Pennsylvania corporation listed on the NASDAQ
OTC Bulletin Board trading under the symbol "GNLK." We are a bioscience company
and were organized to offer to the public the safe collection and preservation
of a family's DNA material for later use by the family to identify and
potentially prevent inherited diseases. Most recently we have created a
breakthrough methodology for SNPs based (single nucleotide polymorphisms)
genetic profiling (patents pending) and will soon license these proprietary
assessments to companies that manufacture or market to the $100 Billion plus
nutraceutical, personal care, skin care and weight-loss industries.

         We have never achieved a profit, having realized net losses each year,
including losses of $920,491 in 1999, $895,844 in 2000 and $882,578 in 2001.
There can be no assurance that we will ever realize significant sales or become
profitable.

         We were founded in response to the explosion of information being
generated in the field of human molecular genetics. Scientists are discovering
an increasing number of connections between genes and specific diseases. These
findings are a direct result of the National Institutes of Health Genome
Project, which has as its goal the total mapping of the human genome by the year
2005. Doctors and scientists have known for years that many individuals and
their family members are predisposed to certain diseases. This inherited
disposition is contained within DNA. DNA, the hereditary material of life, is
contained in all of the genes which make up who we are. If one of these genes is
defective it can cause disease. The ability to diagnose genetic disease has
greatly expanded over the past ten years. In decades past, once a family member
becomes deceased, the opportunity to know whether living family members have
inherited defective genes was lost forever. Future generations could not benefit
from the DNA store of knowledge. For this reason, we have created a DNA banking
service which stores one's genes through the collection and preservation of pure
DNA. Our DNA bank is located at the University of North Texas Health Science
Center in Fort Worth, Texas a 105 year old medical facility. This DNA can be
used to establish whether or not the disease or disorder that caused death was
genetic in origin. As researchers continue to identify diseases linked to
defective genes, living family members can use the stored DNA to discover if
they are at risk for certain diseases such as cancer. DNA banking shifts the
emphasis from diagnosis and treatment, to disease prediction and prevention. It
allows future generations to access their family genetic history. In addition,
our expansion into the bioscience field with its innovative genetic profiles
will help companies create and deliver more effective products - personalized
wellness and `quality of life' products tailored to their customer's individual
needs - based on the science of genetics, thereby allowing the consumer to
determine what vitamin supplements or skin-care products are best for their
individual needs.

THE PRODUCT

         We have developed and received a patent on a non-invasive DNA
Collection Kit(R) for the collection of DNA specimens of our clients. No
licensing or training is necessary for the collection by a client of his or her
DNA specimen. The DNA Collection Kit(R) consists of six swabs and an envelope
for mailing. The collection process is self administered and non-invasive (the
DNA specimen is obtained by scraping the inside of the cheek) and takes less
than five


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minutes to complete. The collection kit is bar-coded for tracking and to ensure
complete confidentiality. For the purpose of DNA banking, the client forwards
the swabs to the University of North Texas Health Science Center (the "Health
Science Center") and completes and forwards a data form to us. Specimens can be
collected during an individual's lifetime or up to 36 to 40 hours after death.
The Health Science Center will store the DNA specimen for 75 year intervals.
Upon a client's request, and upon the payment of a retrieval fee, the stored DNA
specimen can be retrieved and sent to a laboratory for testing. More than one
test can be made on the same DNA specimen.

Our genetic profiling will utilize our patented DNA Collection Kit(R) for the
extraction of DNA to be forwarded in self-addressed mailers to our lab for the
analyzation of SNP's extracted from the DNA to provide each customer with a
personalized genetic assessment to have a nutritional or skin-care regimen
specifically customized to support their unique genetic profile.

AFFILIATES

         GeneLink's DNA Banking: We have an agreement with the Health Science
Center through March 2006 for the storage of the genetic material obtained using
our DNA Collection Kit(R). The Health Science Center will continue to store any
DNA specimens after such date for the balance of the 75 year storage period, but
after March 2006 will no longer be obligated to receive and store any additional
DNA specimens. We have established procedures with the Health Science Center
whereby the Health Science Center will receive a sample in an envelope enclosed
with the DNA Collection Kit(R). The Health Science Center will then analyze the
sample to determine the quantity and quality of the DNA to insure that enough
genetic material is present, extract and store the pure DNA in a frozen state.

         GeneLink biosciences business: We have entered into an agreement with
Orchid BioSciences, Inc. pursuant to which Orchid will perform SNPs genotyping
of samples provided by us for any genetics-based products that we may develop.
We have entered into an agreement with Garden State Nutritionals, Inc., a
division of Vitaquest International, to create a new class of customized vitamin
and nutritional formulations based upon our SNPs based genetic profiling tests.
We do not sell vitamin supplements or skin care products. We will license others
to do that.

MARKETING

         DNA Banking: Since our inception, we have considered a number of
alternatives for the marketing of our DNA Collection Kits(R). Because of our
limited financial resources and the size of our staff, we have elected to
concentrate our marketing activities for DNA banking in the funeral home or
death-care industry. Our strategy in capturing the death-care industry is to
reach the individual funeral home and cremation locations, whether
corporate-owned or independently operated, through our own servicing
representatives. The funeral home provides the last chance opportunity to
collect the DNA of a loved one. The sales approach currently undertaken by us is
to have the funeral home or cremation facility collect the DNA specimen with the
permission of the representative of the deceased, or the deceased if agreed to
prior to death, as part of the pre-need package sold to the deceased, and send
the swabs directly to the Health Science Center for DNA extraction and storage.
The Health Science Center sends us the certificate guaranteeing the DNA storage
for 75 years, and we send the certificate back to the funeral home or cremation
facility to be used as a sales tool for its pre-need sales.


                                       5
<PAGE>
         Our bioscience marketing is through alliances with Arch Chemical and
Garden State Nutritionals who will sell vitamin supplements and skin care
products to their customers.

INTELLECTUAL PROPERTY

         We have received a patent on our method of DNA gathering (Patent
#6,291,171). There is no assurance that the patent will prevent others from
gathering DNA in a similar manner. We have received trademark protection for our
name and logo and for the name "DNA Collection Kit(R)."

         We have filed a series of U.S. patent applications relating to its DNA
Collection Kit(R) and methods for assessing a human subject's susceptibility to
various medical conditions, including oxidative damage, osteoporosis and other
bone density disorders and obesity and for methods of selecting and measuring
the dosage of preventative agents for such conditions. There can be no assurance
that we will receive patent protection on our methods or procedures. We are
negotiating licensing these proprietary assessments to companies that
manufacture or market to the $100 billion plus nutraceutical, personal care,
skin care, and weight-loss industries.

         Our innovative "gene profiles" now offer companies the information they
need to create and sell more effective products - unique wellness and `quality
of life' products tailored to their customer's individual needs - based on the
science of genetics. No longer will people be forced to speculate, guess or use
trial and error to determine which nutritional supplements or skin-care products
are best for them. For the first time, by simply swabbing the inside of one's
mouth (using our patented DNA Collection Kit(R)) and sending the collected
sample to our laboratories - people can be directed to personalized products -
specifically formulated to help compensate for predicted deficiencies.

GENELINK BIOSCIENCES - OXIDATIVE STRESS PROFILES:

         The Oxidative Stress (OS) Profile (patent pending) provides a means of
predicting an individual's inherent genetic capacity to combat oxidative stress.
The profile can measure a person's potential to efficiently control oxygen free
radical damage, eliminate hydrogen peroxide, protect and repair oxidized
phospholipids and destroy harmful environmental compounds.

         This profile information will enable nutritional and skin care
companies to recommend a specific and targeted regime of antioxidant vitamins,
nutrients or skin-care formulations that have been specifically designed to
compensate for predicted deficiencies. Thus, the OS profile can be used to make
rational choices to help optimize nutritional and skin care needs to provide the
best of health and appearance.

         The profile examines genes of the OS family for the existence of single
nucleotide polymorphisms (SNPs). These SNPs exist as naturally occurring
variations in genes in the human population. Many genes exhibit just a single
nucleotide difference that can result in a single amino acid substitution in the
protein that is encoded by that gene. If such a protein is an OS enzyme, it may
be less efficient in enzymatic activity, in which case oxidative damage to
cellular proteins and DNA accumulates over time. It appears that some tissues
are more vulnerable than are others to oxidative stress. SNPs in other oxidative
stress genes have been associated with heart disease, cancer, neurological
degeneration and aging.


                                       6
<PAGE>
         A search for SNPs has the advantage of identifying genetic variations
that reduce antioxidant defense capacity. It can detect changes that are
life-long and predicted to chronically affect the ability to defend against
oxidative stress, aging and age related disease. Genetic profiling information
based on SNPs analyses can be used to design appropriate antioxidant vitamin,
nutrient and skin-care formulations that are specifically tailored to each
individual.

OXIDATIVE STRESS FOR SKIN HEALTH AND AGING PROFILE

         Now, by simply swabbing the inside of one's mouth and sending the
collected sample to our laboratories, a person can have a skin or personal care
formulation specifically designed to compensate for associated deficiencies.

         Currently, when a person sees wrinkles or lines, they begin to apply a
variety of products and creams that contain antioxidants such as retinoids. This
approach is only partially effective because it typically begins only after the
signs of aging have appeared. A much better strategy is to predict the aging of
the skin and initiate a therapy that is designed to match the individual's
genetic pattern and genetic risk of skin aging. Additionally, individuals with
moderate or high risk of oxidative stress could be encouraged to initiate a
therapy much earlier - even before outward signs of skin aging.

         Our OS gene test for skin aging (Patent Pending) is designed to measure
SNPs, which are small variations in DNA. The test looks for SNPs in several key
OS genes that are associated with oxidative stress. Test results can be used to
guide consumers to skin therapies or skin products containing unique active
ingredients and formulations designed to help alleviate specific oxidative
stress deficiencies in the skin.

OBESITY SUSCEPTIBILITY PROFILE

         Obesity is a condition that affects over 70 million Americans, more
than one-third of all adults and one in five children. It is considered an
important risk factor that can lead to the development of diabetes, hypertension
and cardiovascular disease. Obesity also increases one's risk of developing
conditions such as high blood pressure, diabetes, heart disease, stroke, gall
bladder disease and cancer of the breast, prostate and colon. Some people are
more susceptible to obesity than others.

         Our genetics based obesity test (Patent Pending) is designed to look
for SNPs in several key genes that are associated with obesity. The test
provides a score that can be used as a guide to determine what level of
intervention or therapy would be helpful to combat or prevent the problems
associated with obesity.

OSTEOPENIA SUSCEPTIBILITY PROFILE

         Osteopenia is a condition that often leads to osteoporosis - a disease
characterized by low bone density. The World Health Organization formed a
committee in 1994 to define osteoporosis and created four diagnostic categories:
Normal, Osteopenia, Osteoporosis, and Established Osteoporosis. Osteoporosis is
responsible for 1.5 million fractures each year including fractures of the
vertebrae, forearms, wrists and hips. According to the National Osteoporosis
Foundation, 1 in 3 women and at least 1 in 12 men will develop osteoporosis
during their lifetime.


                                       7
<PAGE>
         Our Osteopenia gene test (Patent Pending) looks for SNPs in several key
genes that are associated with bone density. Since osteoporosis can develop
undetected for decades, this test can be a very important tool to help determine
the future risk for fractures and related clinical conditions such as spinal
column compression and bone breaks with or without falls. Our Osteopenia
Susceptibility Assessment can be a very useful guide to early interventions or
therapies that help combat or prevent the condition.

AFFILIATIONS

         We have entered into an agreement with Orchid BioSciences, Inc.
pursuant to which Orchid will perform SNPs genotyping of samples provided by us
for any genetics-based products that we may develop.

         We have entered into an agreement with Garden State Nutritionals, Inc,.
a division of Vitaquest International, to create a new class of customized
vitamin and nutritional formulations based upon our SNPs based genetic profiling
tests.

GOVERNMENT REGULATION

         Pursuant to a letter dated January 23, 1996, the Food and Drug
Administration has determined that our kit is a device, but is not subject to
active regulations by the Center for Devices and Radiological Health. However,
any change in the current regulations could result in the kit becoming a
regulated device.

INTELLECTUAL PROPERTY

         In September 2001, we received a patent, Patent #6,291,171 on our
method of DNA gathering. We have received trademark protection for our name and
logo and for the name "DNA Collection Kit(R)."

EMPLOYEES AND LABOR RELATIONS

         We consider our labor relations to be good, and none of our employees
is covered by a collective bargaining agreement. As of December 31, 2001, we
employed a total of 11 people, 4 on a full time basis, in the following areas:

<TABLE>
<CAPTION>
Category                                                     Number of                   Full Time
--------                                                     Employees                   Employees
                                                             ----------                  ---------
<S>                                                          <C>                         <C>
Sales and marketing................................             4                          4

Business Development...............................             2                          2
General and administration, including
         customer service..........................             1                          1
Lab Director and Scientists at the
         Health Science Center.....................             3                          0
Consultants .......................................             11                         0
</TABLE>


                                       8
<PAGE>
                                   COMPETITION

         DNA Banking: DNA collection and banking is offered on a regional basis
by hospitals and laboratories throughout the United States. To the best of our
knowledge, its other competitor which targets the funeral home industry is DNA
Analysis, Inc. However, DNA Analysis, Inc.'s product is more expensive to the
funeral home than our product, involves an invasive collection procedure (the
drawing of blood with a needle), and is stored at funeral homes and laboratories
of the owners. The DNA collected with our kit is extracted via swabs and stored
at the Health Science Center. The advantage to storage at the Health Science
Center is that the client can feel confident that the Health Science Center,
which is located at a university with over a 100 year history, will continue to
exist throughout the term of the storage agreement. Most funeral homes and
laboratories owned by funeral homes do not have a comparable history or standing
in the community.

         Neither us nor DNA Analysis, Inc. nor any other company, has realized
any significant market penetration. Methods of competition include sales through
funeral homes and hospitals and marketing directly to consumers.

         Biosciences: We believe that we are the only company to utilize genetic
profiling using SNPs markers to customize nutrition and skin-care products. We
believe that we are the only company in this business and know of no other
competition at this time.


                                  RISK FACTORS

         Our business and the value of our shares are subject to the risk
described above and certain additional risks described below.

WE NEED TO RAISE ADDITIONAL CAPITAL, WHICH MAY NOT BE AVAILABLE.

         We have spent, and expect to continue to spend in the future,
substantial funds to complete our planned product development efforts and expand
our sales and marketing activities. We need to raise additional funds to
implement our business plan, and we cannot be certain that we will be able to
obtain additional financing on favorable terms or at all.

         Our future capital requirements and the adequacy of available funds
will depend on numerous factors, including:

         -        the successful commercialization of our existing products;

         -        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.

         If funds generated from our operations, together with our existing
capital resources, are insufficient to meet current or planned operating
requirements, we will have to obtain additional


                                       9
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funds through equity or debt financing, strategic alliances with corporate
partners and others, or through other sources. We do not have any committed
sources of additional financing, and we cannot provide assurance that additional
funding, if necessary, will be available on acceptable terms, if at all. If
adequate funds are not available, we may have to delay, scale-back or eliminate
certain aspects of our operations or attempt to obtain funds through
arrangements with collaborative partners or others. This may result in the
relinquishment of our rights to certain of our technologies, product candidates,
products or potential markets. Therefore, the inability to obtain adequate funds
could have a material adverse impact on our business, financial condition and
results of operations.

EXPECTED FUTURE DILUTION TO SHAREHOLDERS.

         As discussed above, we believe it is likely that we will be required to
raise funds to fund our future operations. If additional funds are raised by us
through issuing equity securities, dilution to shareholders may occur.

WE HAVE A HISTORY OF LOSSES AND EXPECT CONTINUED LOSSES FOR THE FORESEEABLE
FUTURE.

         We commenced operations in 1994. We have incurred significant losses to
date and our revenues have been limited. Our expenses have exceeded revenues in
each year since inception. Given our planned levels of operating expenses, we
expect to continue to incur losses for the foreseeable future. Our accumulated
deficit as of December 31, 2001 was $4,718,395. We incurred a net loss of
approximately $882,578 for the fiscal year ended December 31, 2001. Our expenses
have consisted principally of research and development and of general and
administrative expenses incurred while building our business infrastructure. We
expect to continue to experience significant operating losses in the future as
we continue our research and development efforts and expand our marketing and
sales force in an effort to commercialize our products and services. We plan to
increase our operating expenses in anticipation of increasing revenues. If our
revenue growth is slower than we anticipate or our operating expenses exceed our
expectations, our losses will significantly increase. Even if we were to achieve
profitability, we may not be able to sustain or increase our profitability on a
quarterly or annual basis.

IF ETHICAL AND OTHER CONCERNS SURROUNDING THE USE OF GENETIC INFORMATION BECOME
WIDESPREAD, WE MAY HAVE LESS DEMAND FOR OUR PRODUCTS.

         Genetic testing has raised ethical issues regarding confidentiality and
the appropriate uses of the resulting information. For these reasons,
governmental authorities may call for limits on or regulation of the use of
genetic testing or prohibit testing for genetic predisposition to certain
conditions, particularly for those that have no known cure. Any of these
scenarios could reduce the potential markets for our DNA banking services.

WE DEPEND ON THIRD-PARTY PRODUCTS AND SERVICES AND SOLE OR LIMITED SOURCES OF
SUPPLY TO DEVELOP AND MANUFACTURE SOME COMPONENTS OF OUR PRODUCTS.

         We rely to a substantial extent on outside vendors to manufacture many
of the components that are used in our products. Some of these components are
obtained from a single supplier or a


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limited group of suppliers. Our reliance on outside vendors generally, and a
sole or a limited group of suppliers in particular, involves several risks,
including:

         -        the inability to obtain an adequate supply of required
                  components due to manufacturing capacity constraints, a
                  discontinuance of a product by a third-party manufacturer or
                  other supply constraints;

         -        reduced control over quality and pricing of components; and

         -        delays and long lead times in receiving materials from
                  vendors.

WE HAVE LIMITED SALES AND MARKETING EXPERIENCE.

         We have limited sales and marketing experience and may be unable to
successfully establish and maintain a significant sales and marketing
organization. Due to the relatively limited market awareness of our products, we
believe that the marketing effort may be a lengthy process.

OUR INDUSTRY IS HIGHLY COMPETITIVE AND WE MAY NOT HAVE THE RESOURCES REQUIRED TO
SUCCESSFULLY COMPETE.

         The medical diagnostic and biotechnology industries are highly
competitive. We compete with companies in the United States and abroad that are
engaged in these fields: They include

         -        biotechnology, pharmaceutical, chemical and other companies;

         -        academic and scientific institutions;

         -        governmental agencies; and

         -        public and private research organizations.

         Many of our competitors have much greater financial, technical,
research, marketing, sales, distribution, service and other resources than we
do. Moreover, our competitors may offer broader product lines and have greater
name recognition than we do, and may offer discounts as a competitive tactic. In
addition, several development stage companies are currently making or developing
products and services that compete with or will compete with our products and
services. Our competitors may develop or market technologies or products that
are more effective or commercially attractive than our current or future
products and services, or that may render our technologies and products and
services obsolete.

WE HAVE SIGNIFICANT FIXED OPERATING COSTS AND OUR OPERATING RESULTS ARE SUBJECT
TO FLUCTUATIONS.

         A high percentage of our operating expenses, particularly personnel,
are fixed in advance of any particular quarter. As a result, unanticipated
variations in the number, or progress toward completion of our projects, or in
employee utilization rates may cause significant variations in


                                       11
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operating results in any particular quarter and could result in greater than
expected losses for such quarter.

VOLATILITY OF COMMON STOCK PRICE AND THIN TRADING MARKET.

         Although our Common Stock is listed on the NASDAQ OTC Bulletin Board,
recently daily trading volume of our Common Stock has generally been limited.
The prices for securities of diagnostic or biotechnology companies have
historically been volatile. The trading price of the Common Stock has
experienced considerable fluctuation since we began public trading in 1998.

WE MAY NOT BE ABLE TO ATTRACT AND RETAIN PROFESSIONAL STAFF.

         Our success will depend in large part upon our ability to attract,
retain, train and motivate highly skilled employees. We cannot be certain that
we will be successful in attracting a sufficient number of highly skilled
employees in the future, or that we will be successful in retaining, training
and motivating the employees we are able to attract. Any inability to retain,
train and motivate our employees could impair our ability to adequately manage
and complete our existing projects and to bid for or obtain new projects.
Hiring, training, motivating, retaining and managing employees with the
strategic, technical and creative skills we need is both time consuming and
expensive. If our employees are unable to achieve expected performance levels,
our business, financial condition and results of operations could be adversely
affected.

WE ARE DEPENDENT ON A NUMBER OF KEY PERSONNEL.

         Our success will depend in large part upon the continued services of a
number of key employees. The loss of the services of any of these individuals or
of one or more of our other key personnel could have a material adverse effect
on us. In addition, if one or more of our key employees resigns to join a
competitor or to form a competing company, the loss of such personnel and any
resulting loss of existing or potential clients to any such competitor could
have a material adverse effect on our business, financial condition and results
of operations. In the event of the loss of any such personnel, there can be no
assurance that we would be able to prevent the unauthorized disclosure or use of
our technical knowledge, practices or procedures by such 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.

         Our success depends, in part, upon our proprietary methodologies and
other intellectual property rights. There can be no assurance that the steps
taken by us to protect our propriety information will be adequate to deter
misappropriation of our proprietary information or that we will be able to
detect unauthorized use and take appropriate steps to enforce our intellectual
property rights. In addition, although we believe that our services and products
do not infringe on the intellectual property rights of others, there can be no
assurance that such a claim will not be asserted against us in the future, or
that if asserted any such claim will be successfully defended. A successful
claim against us could materially and adversely affect our business, financial
condition and results of operations.


                                       12
<PAGE>
         Our success will depend on our ability to obtain and protect patents on
our technology and to protect our trade secrets. Our patents, which have been or
may be issued, may not afford meaningful protection for our technology and
products. Others may challenge our patents and, as a result, our patents could
be narrowed, invalidated or unenforceable. In addition, our current and future
patent applications may not result in the issue of patents in the United States
or foreign countries. Competitors may develop products similar to ours that do
not conflict with our patents. In order to protect or enforce our patent rights,
we may initiate patent litigation against third parties, such as infringement
suits or interference proceedings. These lawsuits could be expensive, take
significant time and divert management's attention from other business concerns.
We may also provoke these third parties to assert claims against us.

CONCENTRATION OF OWNERSHIP OF OUR OWN COMMON STOCK AMONG OUR EXISTING EXECUTIVE
OFFICERS, DIRECTORS AND PRINCIPAL SHAREHOLDERS MAY PREVENT NEW INVESTORS FROM
INFLUENCING SIGNIFICANT CORPORATE DECISIONS.

         Our executive officers, directors and beneficial owners of 5% or more
of our common stock and their affiliates, in aggregate, beneficially own a
majority of our outstanding common stock. As a result, if these persons act
together, they would have the ability to determine the outcome of all matters
submitted to our shareholders for approval, including the election and removal
of directors and any merger, consolidation or sale of all or substantially all
of our assets. In addition, such persons, if they act together, would have the
ability to control the management and affairs of our company. Accordingly, this
concentration of ownership may harm the market price of our common stock by:

         -        delaying, deferring or preventing a change in control of our
                  company;

         -        impeding a merger, consolidation, takeover or other business
                  combination involving our company; or

         -        discouraging a potential acquirer from making a tender offer
                  or otherwise attempting to obtain control of our company.

OUR ARTICLES OF INCORPORATION AND BYLAWS COULD DELAY OR DISCOURAGE A TAKEOVER
ATTEMPT.

         Our articles of incorporation and bylaws contain provisions that may
delay or discourage a takeover attempt that a shareholder might consider in
their best interest, including takeover attempts that might result in a premium
being paid on shares of our common stock. These provisions, among other things:

         -        provide that only the board of directors or president may call
                  special meetings of the shareholders;

         -        establish certain advance notice procedures for nominations of
                  candidates for election as directors and for shareholder
                  proposals to be considered at shareholders' meetings;


                                       13
<PAGE>
ITEM 2.  PROPERTIES

         We lease our principal executive offices located in Margate, New Jersey
at no cost from John and Maria DePhillipo. John DePhillipo is our Chief
Executive Officer and President and a member of our Board of Directors and Maria
DePhillipo is the beneficial owner of 13.4% of the shares of our Common Stock.

ITEM 3.  LEGAL PROCEEDINGS

         On February 15, 2000, a Petition for Cancellation was filed in the
United States Patent and Trademark Office Before the Trademark Trial and Appeal
Board, No. 30, 200 for the cancellation of our Trademark Registration No.
1,956,014 that was granted on February 13, 1996 to us for DNA testing and
storage of DNA material for medical diagnostics and identity testing. The
Petitioner is a company in the State of New York by the name of GENELINK, INC.,
which believes it is damaged by said Trademark Registration. The litigation is
in the discovery stage.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.


                                       14
<PAGE>
                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

         Our common stock is listed on the NASDAQ and OTC Bulletin Board under
the System "GNLK". Set forth below, for the periods indicated, is the range of
high and low bid information for our common stock since November, 1998, when our
common stock began trading. These quotations reflect inter-dealer prices without
retail mark-up, mark-down or commission, and may not represent actual
transactions.

                1999                             High              Low
                ----                             ----              ---
                1st Quarter                      $1.47             $0.50
                2nd Quarter                      $0.88             $0.25
                3rd Quarter                      $0.63             $0.18
                4th Quarter                      $0.53             $0.12

                2000                             High              Low
                ----                             ----              ---
                1st Quarter                      $0.74             $0.10
                2nd Quarter                      $0.50             $0.19
                3rd Quarter                      $0.51             $0.25
                4th Quarter                      $0.50             $0.17

                2001                             High              Low
                ----                             ----              ---
                1st Quarter                      $0.44             $0.26
                2nd Quarter                      $0.34             $0.22
                3rd Quarter                      $0.45             $0.19
                4th Quarter                      $0.97             $0.25

         As of March 1, 2002, there were 123 holders of record of our common
stock. We have never paid dividends and do not anticipate paying any dividends
in the future. We anticipate that we will retain all future revenues for working
capital purposes.

         The payment of cash dividends in the future will be at the discretion
of the Board of Directors and will depend upon such factors as earnings levels,
capital requirements, our financial condition and other factors deemed relevant
to the Board of Directors. In addition, our ability to pay dividends may become
limited under future loan agreements which may restrict or prohibit the payment
of dividends.

RECENT SALES OF UNREGISTERED SECURITIES.

         We issued 796,500 and 360,000 common shares of stock for consulting
services rendered to us valued at $289,180 and $83,138 for the years ended
December 31, 2001 and 2000, respectively. These shares were issued in reliance
upon Rule 506 of Regulation D under the Securities Act of 1933.

         During the year ended December 31, 2001, we issued 1,513,334 shares of
common stock and 1,513,334 warrants to purchase common stock for cash
consideration of $520,000. These shares were issued in reliance upon Rule 506 of
Regulation D under the Securities Act of 1933.


                                       15
<PAGE>
         We issued 465,000 shares of common stock as additional consideration
for Debenture Notes Payable valued at $126,641 during the year ended December
31, 2000. These shares were issued in reliance upon Rule 506 of Regulation D
under the Securities Act of 1933.

         We converted $485,000 of Debenture Notes Payable and $36,690 of accrued
interest into 1,554,494 common shares of stock valued at $521,691 at the date of
conversion during the year ended December 31, 2001. These shares were issued in
reliance upon Rule 506 of Regulation D under the Securities Act of 1933. We
converted $115,000 of Debenture Notes Payable into 479,721 common shares of
stock valued at $122,684 at the date of conversion during the year ended
December 31, 2000. These shares were issued in reliance upon Rule 506 of
Regulation D under the Securities Act of 1933.

         Certain of our Officers exercised Options in 2000 to purchase 1,000,000
shares of common stock. These shares were issued in reliance upon Rule 506 of
Regulation D under the Securities Act of 1933. The Company received cash
proceeds of $10,000 for one hundred thousand, $.10 Options. Six hundred thousand
$.10 Options valued at $60,000 offset accrued compensation due to an officer and
three hundred thousand, $.20 Options, valued at a fair market price of $.28 at
the exercise date, were recorded as additional subscriptions receivable and as
compensation expense to an officer in the amount of $60,000 and $24,360,
respectively.

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS.

                              RESULTS OF OPERATIONS

COMPARISON OF FISCAL YEAR ENDED DECEMBER 31, 2001 TO FISCAL YEAR ENDED DECEMBER
31, 2000.

         Assets. Our assets increased from $126,866 at December 31, 2000 to
$365,392 at December 31, 2001, an increase of $238,526. This increase was
primarily due to an increase in cash from $13,801 at December 31, 2000 to
$121,434 at December 31, 2001 and an increase in prepaid expenses from $47,072
at December 31, 2000 to $152,878 at December 31, 2001.

         Liabilities. Our liabilities decreased from $825,044 at December 31,
2000 to $516,216 December 31, 2001, a decrease of $308,828. This decrease in
liabilities was primarily due to a reduction in Notes Payable from $448,757 at
December 31, 2000 to $0 at December 31, 2001 resulting from the conversion of
Notes Payable into Common Stock of the Company upon maturity, as partially
offset by an increase in accrued compensation from $172,318 at December 31, 2000
to $357,807 at December 31, 2001, resulting from officers of the Company
deferring payment of salaries to officers.

         Losses. We incurred a loss of $882,578 for the fiscal year ended
December 31, 2001, as compared to a loss of $895,844 for the fiscal year ended
December 31, 2000, a decrease of $13,266.

         Revenues. Our total revenues for the fiscal year ended December 31,
2001 were $16,930, compared to $37,324 for the fiscal year ended December 31,
2000, a decrease of $20,394. This decrease in revenues is primarily due to a
decrease in emphasis on the Company's DNA banking business and an increase in
emphasis on starting its nutraceuticals business.


                                       16
<PAGE>
         Expenses. Total expenses for fiscal year ended December 31, 2001 were
$911,583, a decrease of $19,046 from our total expenses of $930,629 for the
fiscal year ended December 31, 2000. Decreased expenses are primarily due to a
decrease in interest expense from $168,179 for 2000 to $53,057 for 2001
resulting from conversion of Notes Payable into Common Stock, as partially
offset by an increase in general and administrative expenses from $594,081 in
2000 to $654,942 in 2001, resulting from expenses associated with the initiation
of the Company's nutraceuticals business.

COMPARISON OF FISCAL YEAR ENDED DECEMBER 31, 2000 TO DECEMBER 31, 1999.

         Assets. Our assets increased from $86,145 at December 31, 1999 to
$126,866 at December 31, 2000, an increase of $40,721. This increase was
primarily due to the increase in prepaid expenses from $12,778 at December 31,
1999 to $47,072 at December 31, 2000 and an increase in cash from $5,977 at
December 31, 1999 to $13,804 at December 31, 2000.

         Liabilities. Our liabilities increased from $510,068 at December 31,
1999 to $825,044 December 31, 2000, an increase of $314,976. This increase in
liabilities was primarily due to increase in accounts payable and accrued
expenses from $95,530 at December 31, 1999 to $131,997 at December 31, 2000, an
increase in accrued compensation from $127,742 at December 31, 1999 to $172,318
at December 31, 2000, an increase in accrued interest payable from $6,183 at
December 31, 1999 to $23,782 at December 31, 2000 and an increase in notes
payable from $232,987 at December 31, 1999 to $448,757 at December 31, 2000.

         Losses. We incurred a loss of $895,844 for the fiscal year ended
December 31, 2000, as compared to a loss of $920,491 for the fiscal year ended
December 31, 1999, a decrease of $24,647.

         Revenues. Our total revenues for the fiscal year ended December 31,
2000 were $37,324, compared to $12,448 for the fiscal year ended December 31,
1999, an increase of $24,876. This increase in revenues is primarily as a result
of our sales and marketing efforts in the cremation industry.

         Expenses. Total expenses for fiscal year ended December 31, 2000 were
$930,629, an increase of $15,915 from our total expenses of $914,714 for the
fiscal year ended December 31, 1999. Increased expenses are primarily due to an
increase in professional fees from $46,288 for the fiscal year ended December
31, 1999 to $100,939 for the fiscal year ended December 31, 2000, an increase in
selling, general and administrative expenses from $529,964 for the fiscal year
ended December 31, 1999 to $594,081 for the fiscal year ended December 31 2000
and an increase in interest expense from $87,794 for the fiscal year ended
December 31, 1999 to $168,179 for the fiscal year ended December 31, 2000, as
partially offset by a decrease in consulting expense from $208,784 in 1999 to
$48,434 in 2000. The increase in interest expense primarily resulted from the
issuance by the company of $350,000 of Debenture Notes in the fiscal year ended
December 31, 2000.

Liquidity and Capital Resources

         Our primary liquidity requirement has been the implementation and
funding of our sales and marketing efforts and the payment of compensation to
our officers. For 2002, our primary


                                       17
<PAGE>
liquidity requirement will be the funding of our research and development
efforts and the funding of our sales and marketing efforts.

         Cash and Cash Equivalents. On December 31, 2001, our cash and cash
equivalents amounted to $121,434 as to compared to $13,804 at December 31, 2000,
an increase of $107,630. During 2001, our operating activities utilized $189,792
as compared to utilizing $315,133 in 2000. Cash utilized during these periods
resulted from our net losses for such periods.

         Investing activities utilized $80,739, in 2000, as compared to
utilizing $23,120 in 2000. Financing activities provided $378,161 in 2001, as
compared to $346,080 in 2000, primarily through the issuance common stock and
warrants.

         We will require approximately $1,000,000 to fund our sales and
marketing efforts and to fund our research and development efforts for fiscal
year 2002. We intend to raise funds through one or more private placements of
securities. Unless we can increase our revenues and increase our stock price, it
is not likely that we will be able to secure such financing. If we are unable to
secure such additional required capital, we will continue to realize negative
cash flow and losses and it is unlikely that we will be able to implement our
sales and marketing strategy or to fund our research and development programs.


                                       18
<PAGE>
ITEM 7.  FINANCIAL STATEMENTS

                          INDEX TO FINANCIAL STATEMENTS

                                                                       PAGE
                                                                       ----
Independent Auditors' Report                                              20

Financial Statements

     Balance Sheets                                                       21

     Statements of Operations                                             22

     Statements of Changes in Stockholders' Equity (Deficit)              23

     Statements of Cash Flows                                          24-25

Notes to Financial Statements                                          26-39



                                       19
<PAGE>
                          INDEPENDENT AUDITORS' REPORT

GeneLink, Inc.
Margate, New Jersey

We have audited the accompanying balance sheets of GeneLink, Inc. as of December
31, 2001 and 2000, and the related statements of operations, changes in
stockholders' equity (deficit) and cash flows for the years then ended. 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 have conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audits 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, the financial statements referred to above present fairly, in
all material respects, the financial position of GeneLink, Inc. as of December
31, 2001 and 2000 and the results of its operations and its cash flows for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.

                                            SIEGAL & DROSSNER, P.C., CPA's
                                            CERTIFIED PUBLIC ACCOUNTANTS
                                            PHILADELPHIA, PENNSYLVANIA

January 24, 2002


                                       20
<PAGE>
                                                                  GENELINK, INC.
                                                                  BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER  31,                                                                        2001                        2000
                                                                                  -----------                 -----------
<S>                                                                               <C>                         <C>
ASSETS
Cash                                                                              $   121,434                 $    13,804
Accounts receivable                                                                     1,448                       2,324
Inventory                                                                              10,089                      10,358
Prepaid expenses                                                                      152,878                       7,072
                                                                                  -----------                 -----------
         Total current assets                                                         285,849                      73,558

Property and equipment                                                                 55,662                      50,378
Other assets                                                                           23,881                       2,930
                                                                                  -----------                 -----------
                                                                                  $   365,392                 $   126,866
                                                                                  -----------                 -----------
LIABILITIES

Accounts payable & accrued expenses                                               $    88,816                 $   131,997
Accrued payroll taxes                                                                  11,593                       4,960
Accrued interest payable                                                                    0                      23,782
Current maturities of long-term debt                                                        0                     448,757
                                                                                  -----------                 -----------
         Total current liabilities                                                    100,409                     609,496
                                                                                  -----------                 -----------

Accrued compensation                                                                  357,807                     172,318
Loans payable affiliates                                                               58,000                      43,230
                                                                                  -----------                 -----------
                                                                                      415,807                     215,548
                                                                                  -----------                 -----------
STOCKHOLDERS' EQUITY (DEFICIT)

Common stock, $.01 par value, 75,000,000 shares authorized
16,801,590 and 12,917,262 shares issued, 16,705,410 and 12,821,082
outstanding as of December 31, 2001 and 2000, respectively                            168,015                     129,172
Treasury stock, 96,180 shares                                                        (109,860)                   (109,860)
Additional paid in capital                                                          5,279,271                   4,336,631
Stock subscriptions receivable                                                       (920,189)                   (818,304)
Stock warrants                                                                        350,334                           0
Deferred compensation                                                                (200,000)                   (400,000)
Accumulated deficit                                                                (4,718,395)                 (3,835,817)
                                                                                  -----------                 -----------
                                                                                     (150,824)                   (698,178)
                                                                                  -----------                 -----------
                                                                                  $   365,392                 $   126,866
                                                                                  -----------                 -----------
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                       21
<PAGE>
                                                                  GENELINK, INC.
                                                        STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                                              2001                        2000
                                                                                  ------------                 ------------
<S>                                                                               <C>                          <C>
REVENUE                                                                           $     16,930                 $     37,324

COSTS OF GOODS SOLD                                                                      1,935                        2,539
                                                                                  ------------                 ------------

GROSS PROFIT                                                                            14,995                       34,785
                                                                                  ------------                 ------------

EXPENSES
         Selling, general & administrative                                             654,942                      594,081
         Consulting                                                                     53,525                       48,434
         Professional fees                                                             103,832                      100,939
         Advertising & promotion                                                        41,235                       15,577
         Amortization & depreciation                                                     4,992                        3,419
                                                                                  ------------                 ------------
                                                                                       858,526                      762,450
                                                                                  ------------                 ------------

INTEREST EXPENSE                                                                        53,057                      168,179
                                                                                  ------------                 ------------

NET LOSS BEFORE EXTRAORDINARY ITEM                                                    (896,588)                    (895,844)

EXTRAORDINARY ITEM-FORGIVENESS OF DEBT                                                  14,010                            0
                                                                                  ------------                 ------------

NET LOSS BEFORE PROVISION FOR INCOME TAXES                                            (882,578)                    (895,844)

PROVISION FOR INCOME TAXES                                                                   0                            0
                                                                                  ------------                 ------------

NET LOSS                                                                          $   (882,578)                $   (895,844)
                                                                                  ------------                 ------------

NET LOSS PER SHARE, BASIC & DILUTED                                               $      (0.06)                $      (0.08)
                                                                                  ------------                 ------------

Weighted average common shares and diluted potential common shares                  14,766,515                   11,895,842
                                                                                  ------------                 ------------
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                       22
<PAGE>
                                                                  GENELINK, INC.
                         STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                          YEARS ENDED DECEMBER 31, 2001 AND 2000


<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------------
                                                                                                      ADDITIONAL        STOCK
                                                               COMMON STOCK               TREASURY     PAID ON      SUBSCRIPTIONS
                                                               # OF SHARES      AMOUNT    STOCK        CAPITAL        RECEIVABLE
                                                               -----------      ------    -----        -------        ----------
<S>                                                            <C>            <C>        <C>          <C>           <C>
BALANCE AT JANUARY 1, 2000                                       10,612,541   $106,126   $(109,860)    $3,814,731       $(694,947)

FAIR VALUE OF VESTED STOCK OPTIONS                                        0          0           0             0                0

EXERCISE OF OPTIONS FOR COMMON STOCK                              1,000,000     10,000           0       144,360         (60,000)

ISSUANCE OF COMMON STOCK FOR SERVICES                               360,000      3,600           0        79,538                0

FAIR VALUE OF OPTIONS GRANTED FOR CONSULTING SERVICES
                                                                          0          0           0        11,326                0
ISSUANCE OF COMMON STOCK-ADDITIONAL CONSIDERATION FOR
DEBENTURES                                                          465,000      4,649           0       121,992                0

CONVERSION OF DEBT TO COMMON STOCK                                  479,721      4,797           0       117,887                0

ISSUANCE / REPAYMENTS OF STOCKHOLDERS SUBSCRIPTIONS
RECEIVABLES (NET OF PAYMENTS)                                             0          0           0             0          (16,560)

INTEREST ACCRUED ON SUBSCRIPTIONS RECEIVABLE                              0          0           0        46,797          (46,797)


NET LOSS                                                                  0          0           0             0                0
----------------------------------------------------------------------------------------------------------------------------------

BALANCE AT DECEMBER 31, 2000                                     12,917,262   $129,172   $(109,860)   $4,336,631        $(818,304)

FAIR VALUE OF VESTED STOCK OPTIONS                                        0          0           0             0                0

EXERCISE OF OPTIONS FOR COMMON STOCK                                 20,000        200           0         1,800                0

ISSUANCE OF COMMON STOCK AND STOCK WARRANTS PURSUANT TO
PRIVATE PLACEMENT OFFERINGS                                       1,513,334     15,133           0       154,533                0

ISSUANCE OF COMMON STOCK FOR SERVICES                               796,500      7,965           0       211,106                0

FAIR VALUE OF OPTIONS GRANTED FOR CONSULTING SERVICES                     0          0           0        16,570                0

CONVERSION OF DEBENTURES AND ACCRUED INTEREST TO COMMON STOCK     1,554,494     15,545           0       506,146                0

ISSUANCE / REPAYMENTS OF STOCKHOLDERS SUBSCRIPTIONS
RECEIVABLES (NET OF PAYMENTS)                                             0          0           0             0          (49,400)

INTEREST ACCRUED ON SUBSCRIPTIONS RECEIVABLE                              0          0           0        52,485          (52,485)

NET LOSS                                                                             0           0             0                0
----------------------------------------------------------------------------------------------------------------------------------

BALANCE AT DECEMBER 31, 2001                                     16,801,590   $168,015   $(109,860)   $5,279,271        $(920,189)
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------

                                                                   STOCK        DEFERRED       ACCUMULATED
                                                                  WARRANTS    COMPENSATION      DEFICIT         TOTAL
                                                                  --------    ------------      -------         -----
<S>                                                               <C>         <C>              <C>          <C>
BALANCE AT JANUARY 1, 2000                                              $0       $(600,000)    $(2,939,973) $(423,923)

FAIR VALUE OF VESTED STOCK OPTIONS                                       0         200,000               0    200,000

EXERCISE OF OPTIONS FOR COMMON STOCK                                     0               0               0     94,360

ISSUANCE OF COMMON STOCK FOR SERVICES                                    0               0               0     83,138

FAIR VALUE OF OPTIONS GRANTED FOR CONSULTING SERVICES                    0               0               0     11,326

ISSUANCE OF COMMON STOCK-ADDITIONAL CONSIDERATION FOR
DEBENTURES                                                               0               0               0    126,641

CONVERSION OF DEBT TO COMMON STOCK                                       0               0               0    122,684

ISSUANCE / REPAYMENTS OF STOCKHOLDERS SUBSCRIPTIONS
RECEIVABLES (NET OF PAYMENTS)                                            0               0               0    (16,560)

INTEREST ACCRUED ON SUBSCRIPTIONS RECEIVABLE                             0               0               0          0


NET LOSS                                                                 0               0        (895,844)  (895,844)
---------------------------------------------------------------------------------------------------------------------

BALANCE AT DECEMBER 31, 2000                                            $0       $(400,000)    $(3,835,817) $(698,178)

FAIR VALUE OF VESTED STOCK OPTIONS                                       0         200,000               0    200,000

EXERCISE OF OPTIONS FOR COMMON STOCK                                     0               0               0      2,000

ISSUANCE OF COMMON STOCK AND STOCK WARRANTS PURSUANT TO
PRIVATE PLACEMENT OFFERINGS                                        350,334               0               0    520,000

ISSUANCE OF COMMON STOCK FOR SERVICES                                    0               0               0    219,071

FAIR VALUE OF OPTIONS GRANTED FOR CONSULTING SERVICES                    0               0               0     16,570

CONVERSION OF DEBENTURES AND ACCRUED INTEREST TO COMMON STOCK            0               0               0    521,691

ISSUANCE / REPAYMENTS OF STOCKHOLDERS SUBSCRIPTIONS
RECEIVABLES (NET OF PAYMENTS)                                            0               0               0    (49,400)

INTEREST ACCRUED ON SUBSCRIPTIONS RECEIVABLE                             0               0               0          0

NET LOSS                                                                 0               0        (882,578)  (882,578)
---------------------------------------------------------------------------------------------------------------------

BALANCE AT DECEMBER 31, 2001                                      $350,334       $(200,000)    $(4,718,395) $(150,824)
---------------------------------------------------------------------------------------------------------------------
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                       23
<PAGE>
                                                                  GENELINK, INC.
                                                        STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,                                                                     2001                      2000
                                                                                          ---------                 ---------
<S>                                                                                       <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss                                                                                  $(882,578)                $(895,844)
Adjustments to reconcile net loss to net cash used in operating activities
         Depreciation and amortization                                                        4,992                     3,419
         Amortization of bond discount                                                       36,243                   134,062
         Fair value of compensation related to vested options                               200,000                   200,000
         Compensation on options exercised                                                        0                    24,360
         Options exercised by reducing accrued compensation                                       0                    60,000
         Common stock issued for services                                                   289,180                    83,138
         Fair value of options granted for consulting services                              105,070                    11,326
         Accrued interest-on subordinated debt converted to common stock                          0                    12,123
         Changes in operating assets and liabilities
                  Accounts receivable                                                           876                    (1,216)
                  Inventory                                                                     269                       517
                  Prepaid expenses                                                         (105,806)                  (34,294)
                  Deposits                                                                      112                       800
                  Accounts payable & accrued expenses                                       (43,181)                   36,467
                  Accrued payroll taxes                                                       6,633                   (12,166)
                  Accrued interest                                                           12,909                    17,599
                  Accrued compensation                                                      185,489                    44,576
                                                                                          ---------                 ---------

Net cash used in operating activities                                                      (189,792)                 (315,133)
                                                                                          ---------                 ---------
CASH FLOWS FROM INVESTING ACTIVITIES

         Capital expenditures                                                                (9,326)                   (2,120)
         Patent acquisition costs                                                           (22,013)                        0
         Increase in subscriptions receivable                                               (49,400)                  (21,000)
                                                                                          ---------                 ---------

         Net cash used in investing activities                                            $ (80,739)                $ (23,120)
                                                                                          ---------                 ---------
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                       24
<PAGE>
                                                                  GENELINK, INC.
                                                        STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,                                                                       2001                    2000
                                                                                             --------                --------
<S>                                                                                          <C>                     <C>
CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from loans and notes payable                                                     $ 14,770                $ 12,730
   Proceeds from debentures issued (net of related fees)                                            0                 323,350
   Proceeds relating to issuance of common stock (net)                                        361,391                  10,000
   Proceeds from exercise of stock options                                                      2,000                       0
                                                                                             --------                --------

Net cash provided by financing activities                                                     378,161                 346,080
                                                                                             --------                --------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                                     107,630                   7,827

Cash and cash equivalents, beginning of year                                                   13,804                   5,977
                                                                                             --------                --------

Cash and cash equivalents, end of year                                                       $121,434                $ 13,804
                                                                                             --------                --------
SUPPLEMENTARY CASH FLOW INFORMATION

Income taxes paid                                                                                   0                       0
Interest paid                                                                                       0                       0

NON-CASH FINANCING TRANSACTIONS:
  Conversion of debt and accrued interest to equity                                           504,266                 115,000
  Increase in subscriptions receivable - officer cashless exercise of options                       0                  60,000
 Stock issued related to debenture financing                                                        0                 126,641
  Accrued interest on subscriptions receivable                                                 52,485                  46,797
</TABLE>

    THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.


                                       25
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

1 - DESCRIPTION OF
    ORGANIZATION
    AND SUMMARY OF
    SIGNIFICANT
    ACCOUNTING
    POLICIES

                  GOING CONCERN

                  The Company's financial statements are prepared using
                  generally accepted accounting principles applicable to a going
                  concern, which contemplates the realization of assets and
                  liquidation of liabilities in the normal course of business.
                  The Company incurred an operating loss of $882,578 and
                  $895,844 for the years ended December 31, 2001 and 2000,
                  respectively. The Company reported a deficit of $4,718,395 and
                  $3,835,817 as of December 31, 2001 and 2000, respectively. The
                  Company has announced marketing plans to enhance sales and
                  therefore, management believes that they will be able to
                  generate sufficient revenue and cash flow for the Company to
                  continue as a going concern. Should the Company be unable to
                  continue as a going concern, assets and liabilities would
                  require restatement on a liquidation basis which would differ
                  materially from the going concern basis.

                  BUSINESS ORGANIZATION

                  GeneLink, Inc. (the Company), operating in New Jersey, was
                  organized under the laws of the Commonwealth of Pennsylvania
                  to offer to the public the safe collection and preservation of
                  a family's DNA material for later use by the family to
                  determine genetic linkage. The Company is the successor by
                  merger to a Delaware Corporation organized under the same name
                  on September 21, 1994. The Company's executive offices are
                  located in Margate, New Jersey.

                  BUSINESS DESCRIPTION

                  The Company was founded in response to the information being
                  generated in the field of human molecular genetics. Management
                  believes future generations could benefit from the DNA store
                  of knowledge, as scientists are discovering an increasing
                  number of connections between genes and specific diseases. For
                  this reason, the Company has created a DNA banking service
                  that stores DNA before and after an individual dies. This
                  genetic history can help families determine if they are at
                  risk for certain inherited diseases. DNA banking shifts the
                  emphasis from diagnosis and treatment to detection and
                  prevention.

                  The Company has developed a patented DNA Collection Kit for
                  the collection of DNA specimens of its clients. The DNA will
                  be stored for 75-year intervals. Upon a client's request, and
                  upon the payment of a retrieval fee, the stored DNA specimen
                  can be retrieved and sent to a laboratory for testing.

                  The Company has also developed three proprietary genetic
                  indicator tests (GeneLink's Genesis 1 Program) and has filed
                  three patent applications. These tests are designed to measure
                  genes that can contribute to disease and aging, predict an
                  individual's risk for skin aging, and predict an individual's
                  susceptibility to obesity. The Company's patented DNA
                  Collection Kit will be


                                       26
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

1 - DESCRIPTION OF
    ORGANIZATION
    AND SUMMARY OF
    SIGNIFICANT
    ACCOUNTING
    POLICIES
    (CONTINUED)

                  used for the Program, which can assist nutritional companies
                  and medical, health and anti-aging practitioners to offer a
                  "more targeted" and improved approach to wellness/nutritional
                  therapies.

                  USE OF ESTIMATES

                  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 reported amounts of revenues and expenses during the
                  reporting period. Actual results could differ from those
                  estimates.

                  CASH AND CASH EQUIVALENTS

                  Highly liquid debt instruments purchased with a maturity of
                  three months or less are considered to be cash equivalents. At
                  times cash and cash equivalents may exceed insured limits. The
                  Company maintains some cash balances with Merrill Lynch, which
                  is SIPC insured up to $300,000.

                  PROPERTY AND EQUIPMENT

                  Property and equipment are stated at cost. Expenditures for
                  maintenance and repairs are charged against operations.
                  Renewals and betterments that materially extend the life of
                  the assets are capitalized. Depreciation is computed using the
                  straight line method over the estimated useful lives of the
                  related assets.

                  REVENUE AND COST RECOGNITION

                  Revenues are recorded when the kits are sold as opposed to
                  when monies are received. The Company receives the entire
                  non-refundable fee up front for the DNA kits and provides the
                  DNA analysis testing at that time, then stores the specimen up
                  to 75 years. If the client requests the DNA specimen back at
                  any time during the storage period, they will be entitled to
                  receive the specimen upon payment of an additional retrieval
                  fee but will not be entitled to any refund of the original
                  storage fee. Direct costs related to sale of kits include
                  purchase of kits, samples and delivery expense. The direct
                  costs of kits are recognized at time of sale to the customers
                  as opposed to the time of purchase by GeneLink, Inc. from
                  vendor. Kits purchased by GeneLink, Inc. not yet sold remain
                  in inventory.

                  AMORTIZATION OF PATENTS

                  Legal and professional fees and expenses in connection with
                  the filing of patent and trademark applications have been
                  capitalized and are amortized over fifteen years on a
                  straight-line basis. The Company has filed for and has patents
                  pending in the USA and foreign countries on its method of DNA
                  gathering, which patent


                                       27
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

1 - DESCRIPTION OF
    ORGANIZATION
    AND SUMMARY OF
    SIGNIFICANT
    ACCOUNTING
    POLICIES
    (CONTINUED)

                  application is pending in foreign countries. The Company also
                  filed for and has patents pending on its three proprietary
                  genetic indicator tests. The Company has registered trademark
                  for its name and logo and for the name "DNA Collection
                  Kit"(R). In March, 2001, the Company reached a Notice of
                  Allowance of Patent on its method of DNA gathering, and has
                  received trademark protection for its name and logo and for
                  the name "DNA Collection Kit"(R).

                  INVENTORY

                  Inventory consists of kits held for resale. Inventory is
                  valued at the lower of cost (using the first-in, first-out
                  method) or market. The shelf life of the DNA kits is estimated
                  by the Company to be in excess of 30 years.

                  INCOME TAXES

                  The Company accounts for income taxes in accordance with
                  Statement of Financial Accounting Standards ("SFAS") NO. 109,
                  "ACCOUNTING FOR INCOME TAXES", which requires the use of an
                  asset and liability approach for financial accounting and
                  reporting for income taxes. Under this method, deferred tax
                  assets and liabilities are recognized based on the expected
                  future tax consequences of temporary differences between the
                  financial statement carrying amounts and tax basis of assets
                  and liabilities as measured by the enacted tax rates that are
                  expected to be in effect when taxes are paid or recovered.

                  LONG LIVED ASSETS

                  The Company reviews for the impairment of long-lived assets
                  and certain identifiable intangibles whenever events or
                  changes indicate that the carrying amount of an asset may not
                  be recoverable. An impairment loss would be recognized when
                  estimated future cash flows expected to result from the use of
                  an asset and its eventual disposition are less than its
                  carrying amount. The Company has not identified any such
                  impairment losses during the years ended December 31, 2001 and
                  2000.

                  PER SHARE DATA

                  Effective November 12, 1998, the Company adopted SFAS No. 128,
                  "Earnings Per Share". The provisions of SFAS No. 128 establish
                  standards for computing and presenting earnings per share
                  (EPS). This standard replaces the presentation of primary EPS
                  with a presentation of basic EPS. Additionally, it requires
                  dual presentation of basic and diluted EPS for all entities
                  with complex capital structures and requires a reconciliation
                  of the numerator and denominator of the diluted EPS
                  computation. Diluted EPS reflects the potential dilution that
                  could occur if securities or other contracts to issue common
                  stock were exercised or


                                       28
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

1 - DESCRIPTION OF
    ORGANIZATION
    AND SUMMARY OF
    SIGNIFICANT
    ACCOUNTING
    POLICIES
    (CONTINUED)

                  converted into common stock. Diluted EPS for 2001 and 2000
                  excludes any effect from such securities as their inclusion
                  would be antidilutive. Per share amounts for all periods
                  presented have been restated to conform with the provisions of
                  SFAS No. 128.

                  STOCK OPTIONS

                  The Financial Accounting Standards Board has issued SFAS 123,
                  which defines a fair value based method of accounting for an
                  employee stock option and similar equity instruments and
                  encourages all entities to adopt that method of accounting for
                  all of their employee stock compensation plans. However, it
                  also allows an entity to continue to measure compensation cost
                  for those plans using the method of accounting prescribed by
                  Accounting Principles Board Opinion No. 25 (APB 25). Entities
                  electing to remain with the accounting in APB 25 must make
                  proforma disclosures of net income (loss) and, if presented,
                  earnings (loss) per share, as if the fair value based method
                  accounting defined in SFAS 123 had been adopted. The Company
                  has elected to account for its stock-based compensation plans
                  under APB 25.

2 - PROPERTY AND
    EQUIPMENT

                  As of December 31, 2001 and 2000, property and equipment
                  consisted of the following:

<TABLE>
<CAPTION>
                                                         2001            2000
                                                        -------        -------
<S>                                                     <C>            <C>
                  Office Furniture                      $ 1,154        $ 1,154
                  Office Equipment                       25,572         16,246
                  Leasehold Improvement                  50,000         50,000
                                                        -------        -------
                                                         76,726         67,400
                  Less: accumulated depreciation         21,064         17,022
                                                        -------        -------
                                                        $55,662        $50,378
                                                        =======        =======
</TABLE>

                  Depreciation expense was to $4,042 and $3,202 for the years
                  ended December 31, 2001 and 2000, respectively.


                                       29
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

3 - DEBENTURE-
    NOTES PAYABLE

                  The Company issued various debenture notes payable in the
                  amount of $600,000 between April, 1999 and December, 2000. The
                  interest rate ranged from 8.5% and 12% and the term ranged
                  from three months to one year. All notes and accrued interest
                  were converted into 2,034,215 shares of common stock as of
                  December 31, 2001.

                  Accrued interest payable on the debenture notes as of December
                  31, 2001 and 2000 was $0 and $23,782, respectively.

                  In connection with the Company issuing the debenture notes
                  payable, additional shares of common stock were issued in
                  amounts equal to the principal amount of the debenture. The
                  fair market value, of the amortizable debenture discounts, was
                  recorded net with the debenture notes payable and will be
                  amortized over the life of the debenture.

                  The Company's Amortizable Debenture Discounts were as follows:

<TABLE>
<CAPTION>
                                                               2001         2000
                                                             ---------   ---------
<S>                                                          <C>         <C>
                  Original Amortizable Debenture Discount    $ 246,448   $ 246,448
                  Less Cumulative Amortization/Interest Exp.  (246,448)   (210,206)
                                                             ---------   ---------
                  Net Amortizable Debenture Discounts        $       0   $  36,242
                                                             =========   =========
</TABLE>

                  The Company's Net Debenture Notes Payable were as follows:

<TABLE>
<CAPTION>
                                                            2001          2000
                                                         ---------     ---------
<S>                                                      <C>           <C>
                  Original Debentures issued             $ 600,000     $ 600,000
                  Less Amounts converted to stock         (600,000)     (115,000)
                  Net Amortizable Debenture Discounts            0       (36,242)
                                                         ---------     ---------
                  Net Debentures Notes Payable           $       0     $ 448,758
                                                         =========     =========
</TABLE>

4 - INCOME TAXES

                  At December 31, 2001, the Company had significant federal and
                  state tax net operating loss carryforwards of approximately
                  $5,650,000. The difference between the operating loss
                  carryforwards on a tax basis and a book basis is due
                  principally to differences in depreciation, amortization, and
                  treatment of stock options. The federal carryforwards will
                  begin to expire in 2009 and the state carryforwards will begin
                  to expire in 2005.

                  The Company had a net deferred tax asset of $684,000 at
                  December 31, 2001 primarily from net operating loss
                  carryforwards. A valuation allowance was recorded to reduce
                  the net deferred tax asset to zero.


                                       30
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

5 - SHAREHOLDERS'
    EQUITY
    TRANSACTIONS

                  A.  COMMON STOCK

                  During the year ended December 31, 2001, the Company issued
                  1,513,334 shares of common stock and 1,513,334 warrants to
                  purchase common stock for cash consideration of $520,000. This
                  is pursuant to the private placement offerings from January
                  and June, 2001 and subsequent amendments in October and
                  November, 2001. Using the Black-Scholes methodology, the
                  warrants were valued at $350,334.

                  The Company issued 796,500 and 360,000 shares of common stock
                  for services rendered valued at $289,180 and $83,138 for the
                  years ended December 31, 2001 and 2000, respectively.

                  The Company issued 465,000 shares of common stock as
                  additional consideration for Debenture Notes Payable valued at
                  $126,641 during the year ended December 31, 2000.

                  The Company converted $485,000 of Debenture Notes Payable and
                  $36,690 of accrued interest into 1,554,494 common shares of
                  stock valued at $521,691 at the date of conversion during the
                  year ended December 31, 2001. The holding period restriction
                  on these shares lapse on May 5, 2002.

                  The Company converted $115,000 of Debenture Notes Payable into
                  479,721 common shares of stock valued at $122,684 at the date
                  of conversion during the year ended December 31, 2000.

                  Officers of the Company exercised Options in 2000 to purchase
                  1,000,000 shares of common stock. The Company received cash
                  proceeds of $10,000 for one hundred thousand, $.10 Options.
                  Six hundred thousand $.10 Options valued at $60,000 offset
                  accrued compensation due to an officer and three hundred
                  thousand, $.20 Options, valued at a fair market price of $.28
                  at the exercise date, were recorded as additional
                  subscriptions receivable and as compensation expense to an
                  officer in the amount of $60,000 and $24,360, respectively.

                  B.  SUBSCRIPTION RECEIVABLE-OFFICERS

                  Since its inception, the Company advanced funds periodically
                  to an officer. Subscription Receivable-Officers represents
                  officers loans and accrued interest of $920,189 and $818,304
                  at December 31, 2001 and December 31, 2000 respectively. The
                  loans accrue interest using the average applicable on-month
                  Federal Rates (AFRs).

                  The officer has executed a note payable to the Company to
                  evidence his obligation on account of his loans. Under the
                  terms of the obligation, in


                                       31
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

5 - SHAREHOLDERS'
    EQUITY
    TRANSACTIONS
    (CONTINUED)

                  repayment thereof, the officer will have the right, at any
                  time on or before December 31, 2003, to transfer to the
                  Company, at the then fair market value, shares of the
                  Company's common stock. Any transfer not in full satisfaction
                  of the obligation will first be applied to accrued interest
                  and then to principal. No payments of interest or principal
                  shall be due on account of the loans prior to December 31,
                  2003. Fair market value of the Company's shares shall be equal
                  to the average between the bid and ask price in the market in
                  which it is publicly-traded on the last date on which such
                  trades occurred prior to the transfer of shares from the
                  officer of the Company.

                  The Company recorded these subscription receivables as a
                  contra-equity account in the Company's balance sheet in
                  accordance with Staff Accounting Bulletin Topic 4G, with
                  related interest income on these notes also being recorded in
                  the Company's equity section.

                  C.  STOCK OPTIONS AND WARRANTS

                  The Financial Accounting Standards Board has issued SFAS 123,
                  which defines a fair value based method of accounting for an
                  employee stock option and similar equity instruments and
                  encourages all entities to adopt that method of accounting for
                  all of their employee stock compensation plans. However, it
                  also allows an entity to continue to measure compensation cost
                  for those plans using the method of accounting prescribed by
                  Accounting Principles Board Opinion No. 25 (APB 25). Entities
                  electing to remain with the accounting in APB 25 make proforma
                  disclosures of net income (loss) and, if presented earnings
                  (loss) per share, as if the fair value based method of
                  accounting defined in SFAS 123 had been adopted. The Company
                  has elected to account for its stock-based compensation plans
                  under APB 25.

                  During September, 1997, an officer of the Company was granted
                  options to acquire 1,200,000 shares at $.10 per share, for
                  services provided to the Company from its inception, 400,000
                  of which vested upon the execution of the employment agreement
                  with the remaining balance vesting in four (4) equal annual
                  installments of 200,000 each commencing January, 1998.

                  During September, 1997, the Company also issued another
                  officer of the Company 1,000,000 options that will enable him
                  to acquire shares of the Company's common stock exercisable at
                  the price of $.10 per share for services provided to the
                  Company from its inception. These options will expire December
                  31, 2003 and vest 200,000 upon the execution of the agreement,
                  with the remaining balance vesting in four equal annual
                  installments of 200,000 each, commencing January, 1999.


                                       32
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

5 - SHAREHOLDERS'
    EQUITY
    TRANSACTIONS
    (CONTINUED)

                  Pursuant to APB No. 25 compensation has been recognized based
                  upon the difference of the fair value of the Company's stock
                  at grant date and the officers exercise price as follows:

<TABLE>
<CAPTION>
                                                       FAIR VALUE
                  GRANT        # OF OPTIONS           OF OPTIONS AT           EXERCISE          ADDITIONAL
                  DATE           GRANTED              DATE OF GRANT            PRICE           COMPENSATION
                  ------         -------              -------------          ---------         ------------
<S>               <C>           <C>                       <C>                  <C>               <C>
                  1997          2,200,000                 $ .60                $ .10             1,100,000
                  1998                  0                    --                   --                    --
</TABLE>

                  In connection with the Company issuing the options to the
                  officers noted above, the Company recorded a deferred
                  compensation charge of $1,100,000 reflected in the equity
                  section. The deferred compensation is being amortized to
                  expense over the vesting periods, and totaled $200,000 for the
                  years ended December 31, 2001 and 2000, respectively.

                  During the three months ended March 31, 2000, the Company
                  issued 25,000 stock options/warrants to purchase the Company's
                  common stock at a price of $1.50 per share with expiration
                  dates in 2003.

                  On May 18, 2000, an officer of the Company exercised 600,000
                  options to acquire 600,000 shares of common stock at an
                  exercise price of $.10 per share. The amount due to the
                  Company, $60,000, was offset against monies the Company
                  previously owed to the officer for accrued compensation.

                  On May 22, 2000, the Company established an incentive stock
                  option plan pursuant to which the Company is entitled to issue
                  options to acquire 2,500,000 shares of it stock. During the
                  second quarter of 2000, the Company granted an officer of the
                  Company an option to acquire 500,000 shares of common stock at
                  an exercise price of $.20 per share (equal to 110% of the per
                  share fair market price as of the date of the grant). These
                  options were vested on the date of issue, May 22, 2000.

                  On May 22, 2000, the Company established a non-qualified stock
                  option agreement in which it granted 300,000 shares to an
                  officer of the Company. The option price was determined to be
                  $.20 (110% of the fair market value of the company stock as of
                  the date of the grant). These options vested immediately at
                  the date of the grant.

                  During the quarter ended June 30, 2000, the Company issued
                  options to acquire 10,000 shares of common stock at $1.00 per
                  share. These options vest 5,000 annually on April 17, 2000 and
                  April 17, 2001. These options were issued in consideration for
                  marketing services to be rendered over the next two years.


                                       33
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

5 - SHAREHOLDERS'
    EQUITY
    TRANSACTIONS
    (CONTINUED)

                  Pursuant to FAS 123, consulting expense of $11,326 was
                  recorded based on the fair value of the options granted.

                  On January 23, 2001, the Company issued incentive stock
                  options to two officers to acquire 1,500,000 shares of common
                  stock at $.40 per share. These options expire on January 23,
                  2006 and vest 500,000 on January 23, 2001, 500,000 on January
                  23, 2002, 350,000 on January 23, 2003, and 150,000 on January
                  23, 2004.

                  On January 30, 2001, warrants granted during 1999 to acquire
                  100,000 shares of common stock at $1.50 per share were
                  cancelled. The Company issued replacement warrants to acquire
                  250,000 shares at $.33 per share.

                  During the quarter ended March 31, 2001, the Company issued
                  warrants to acquire 550,000 shares of common stock at $.44 per
                  share pursuant to a consulting agreement. These warrants vest
                  275,000 on January 17, 2001, and 275,000 on January 17, 2002.
                  Pursuant to FAS 123, consulting expense of $52,250 was
                  recorded based on the fair value of the vested options
                  granted. This was charged against additional paid in capital
                  as a fund raising expenditure.

                  On May 11, 2001, warrants granted for services during 2000 to
                  acquire 25,000 shares of common stock at $1.50 per share were
                  cancelled. The Company issued replacement warrants to acquire
                  100,000 shares at $.35 per share. Pursuant to FAS 123,
                  consulting expense of $87,650 was recorded based on the
                  difference in value between the original options and the
                  replacement warrants.

                  During the quarter ended June 30, 2001, the Company issued
                  warrants to acquire 12,000 shares of common stock at $1.00 per
                  share and 40,000 shares of common stock at $.50 per share
                  pursuant to consulting agreements. Of the warrants issued,
                  12,000 vest in twelve monthly installments of 1,000 commencing
                  June 1, 2001, and the other 40,000 vest 20,000 on April 1,
                  2002 and 20,000 on April 1, 2003. Pursuant to FAS 123,
                  consulting expense of $420 was recorded based on the fair
                  value of the warrants granted.

                  During the quarter ended December 31, 2001, the Company issued
                  warrants to acquire 237,500 shares of common stock at $.50 per
                  share pursuant to consulting agreements. Of the warrants
                  issued, 150,000 vest in monthly installments of 6,250
                  commencing September 1, 2001 and 87,500 vest immediately.
                  Pursuant to FAS 123, consulting expense of $8,500 was recorded
                  and fundraising expenditures of $36,250 was charged against
                  additional paid in capital based on the fair value of the
                  vested options granted.


                                       34
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

5 - SHAREHOLDERS'
    EQUITY
    TRANSACTIONS
    (CONTINUED)

                  A summary of the status of the Company's stock options and
                  warrants as of December 31, 2001 and 2000, and changes during
                  the years ending of those dates presented below:

<TABLE>
<CAPTION>
                                                                                     WEIGHTED                         WEIGHTED
                                                                       2001           AVERAGE          2000            AVERAGE
                                                                       ----          EXERCISE          ----           EXERCISE
                                                                      SHARES           PRICE           SHARES           PRICE
                                                                     ---------     -------------      ---------     -------------
<S>                                                                  <C>           <C>                <C>           <C>
                  Options/Warrants outstanding at beginning          3,623,195     $        0.69      3,788,195     $        0.64
                  of year
                  Granted                                            4,202,834              0.47        835,000              0.25
                  Exercised                                            (20,000)            (0.10)    (1,000,000)            (0.13)
                  Canceled                                            (125,000)            (1.50)             0              0.00
                                                                     ---------                        ---------

                  Options/Warrants outstanding at end of             7,681,029              0.56      3,623,195              0.69
                  year                                               =========                        =========

                  Options/Warrants exercisable at end of
                  Year                                               5,436,030                        2,018,195
                  Weighted-average fair value of options granted
                  during the year                                                  $        0.40                    $        0.49
</TABLE>

                  The following table summarizes information about stock options
                  and warrants outstanding at December 31, 2001:

<TABLE>
<CAPTION>
                                   WEIGHTED-AVERAGE
                                                      REMAINING
                                        NUMBER       CONTRACTUAL
                         EXERCISE     OUTSTANDING       LIFE       EXERCISABLE
                          PRICE       AT 12/31/01      (YEARS)       WARRANTS
                           ----        ---------        ----        ---------
<S>                      <C>          <C>            <C>           <C>
                           0.10          858,820        2.00          458,820
                           0.20          500,000        4.00          500,000
                           0.33          250,000        2.00          250,000
                           0.35          100,000        4.25          100,000
                           0.40        1,500,000        4.00          500,000
                           0.44          550,000        4.00          275,000
                           0.50        1,560,834        4.79        1,395,834
                           0.75           45,000        3.00           45,000
                           1.00        2,252,000        2.29        1,847,000
                           1.50           64,375        2.00           64,375
</TABLE>

                  Had compensation cost of GeneLink, Inc.'s incentive stock
                  options issued to officers been determined based on the fair
                  value of options at the dates of award under the fair value
                  method of SFAS 123, the Company's net loss and net loss per
                  common share would have been reduced to the proforma amounts
                  indicated below:


                                       35
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

5 - SHAREHOLDERS'
    EQUITY
    TRANSACTIONS
    (CONTINUED)

<TABLE>
<CAPTION>
                                                           2001           2000
                                                           ----           ----
<S>                                                   <C>            <C>
                           Net Loss:
                                    As reported       $  (882,578)   $ (712,061)
                                    Proforma           (1,063,578)     (893,601)


                           Net Loss per common share:

                                    As reported       $      (.06)   $     (.05)
                                    Proforma                 (.07)         (.06)
</TABLE>

                  Significant assumptions used to calculate the fair value of
                  all options issued for services as follows:

                           Risk free interest rate of return             7%
                           Expected option life                       4-5.5 yrs.
                           Expected dividends                           $-0-
                           Expected volatility                           50%

              D.  PRIVATE PLACEMENT OFFERING

                  On January 1, 2001, GeneLink, Inc. commenced a private
                  placement offering of up to 2 million units at a price of $.50
                  per unit, under Rule 504 of Regulation D, which provides an
                  exemption for limited offerings and sales of securities not
                  exceeding $1,000,000. Each unit consists of one share of
                  Common Stock and a Warrant to acquire one share of Common
                  Stock at an exercise price of $1.00 per share. The proceeds
                  will be used for working capital and for research and
                  development expenditures in connection with the development of
                  a new product line.

                  On June 18, 2001, GeneLink, Inc. commenced a private placement
                  offering of up to 250,000 units at a price of $.30 per unit,
                  under Rule 506 of Regulation D. Each unit consists of one
                  share of Common Stock and a Warrant to acquire one share of
                  Common Stock at an exercise price of $.50 per share. The
                  proceeds will be used for working capital and to fund research
                  and development relating to a new product line. This was
                  amended on August 21, 2001 to offer up to 500,000 units. On
                  November 14, 2001, an amendment to the private placement
                  offering increased the purchase price to $.50 per unit, and
                  the warrant exercise price to $1.00 per share. A December 18,
                  2001 amendment increased the purchase price to $.625 per unit.


                                       36
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

6 -  NET LOSS PER
     SHARE

                  Earnings per share is calculated under the provisions of
                  Statement of Financial Accounting Standards (SFAS) No. 128
                  "Earnings Per Share".

                  Basic EPS is calculated using the weighted average number of
                  common shares outstanding for the period and diluted EPS is
                  computed using the weighted average number of common shares
                  and dilutive common equivalent shares outstanding. Given that
                  the Company is in a loss position, there is no difference
                  between basic EPS and diluted EPS since the common stock
                  equivalents would be antidilutive.

<TABLE>
<CAPTION>
                                                                 2001                 2000
                                                             ------------         ------------
<S>                                                          <C>                  <C>
                  Net loss                                   $   (882,578)        $   (894,844)
                  Weighted average number of shares
                     of common stock and common stock
                     equivalents outstanding:
                  Weighted average number of common
                     shares outstanding for computing
                     basic earnings per share                  14,766,515           11,895,842
                  Dilute effect of warrants and stock
                     options after application of the
                     treasury stock method                              *                    *
                                                             ------------         ------------
                  Weighted average number of common
                     shares outstanding for computing
                     diluted earnings per share                14,766,515           11,895,842
                                                             ============         ============
                  Net loss per share-basic & diluted         $       (.06)        $       (.08)
                                                             ============         ============
</TABLE>

                  *The following common stock equivalents are excluded from
                  earnings per share calculation as their effect would have been
                  antidilutive:

<TABLE>
<CAPTION>
                  YEAR ENDED DECEMBER 31              2001             2000
                  ----------------------              ----             ----
<S>                                                 <C>              <C>
                  Warrants and stock options        5,436,030        2,018,195
                                                    =========        =========
</TABLE>

7 - ADVERTISING

                  The Company expenses the production costs of advertising the
                  first time the advertising takes place. Advertising expense
                  was $64,746 and $15,577 for the years ended December 31, 2001
                  and 2000, respectively.

8 - RENT

                  The Company leases its primary executive offices located in
                  Margate, New Jersey at no cost from its officers. Rent expense
                  for the years ended December 31, 2001 and 2000 was $0.

9 - TRANSACTIONS
    WITH RELATED
    PARTIES

                  The Company has an agreement with the UNTHSC through March,
                  2006 for the storage of the genetic material obtained using
                  one of the Company's kits. Two (2) doctors associated with the
                  UNTHSC own approximately 20,000 shares of the Company.


                                       37
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

9 - TRANSACTIONS
    WITH RELATED
    PARTIES
    (CONTINUED)

                  The Company has established protocols with the UNTHSC whereby
                  the UNTHSC will receive a sample in an envelope enclosed with
                  the kit, measure the quantity to assure that enough genetic
                  material is present, analyze the sample to extract the DNA,
                  freeze and store the material in the refrigerated area
                  maintained by the UNTHSC making it available for future
                  retrieval.

                  A portion of the Company's operations were conducted in by
                  Kelly/Waldron & Company in East Brunswick, New Jersey, which
                  owns 289,333 shares of the Company. Kelly/Waldron, which
                  provides various services to members of the pharmaceutical
                  industry, acts as the Company's back office, receiving orders
                  and inquiries, processing data and preparing reports for the
                  Company. Because of the Company's limited operations and the
                  limited availability of funds, the Company's agreement with
                  Kelly/Waldron does not require it to make any payments to
                  Kelly/Waldron for its services. As its business increases, the
                  Company expects to commence payment of a management fee to
                  Kelly/Waldron on terms to be agreed upon between the parties.
                  As of December 31, 2000 the Company owed Kelly/Waldron
                  $20,166. The agreement expired during 2000 and no balance was
                  due to Kelly/Waldron and Company as of December 31, 2001.

                  LOANS PAYABLE-AFFILIATES

                  The Company's unsecured long-term debt as of December 31, 2001
                  and 2000 consists of loans from various shareholders with no
                  stated repayment terms.

<TABLE>
<CAPTION>
                                                     2001                2000
                                                    -------            -------
<S>                                                 <C>                <C>
                  Total Obligations                 $58,000            $43,230
                  Less:  Current Portion                  0                  0
                                                    -------            -------
                                                    $58,000            $43,230
                                                    =======            =======
</TABLE>

                  CONSULTING

                  The Company is dependent, to a large degree, on the services
                  of John DePhillipo, its Chairman and Chief Executive Officer
                  and the Company has entered into a five (5) year employment
                  agreement dated February 24, 1998, with an initial annual base
                  compensation of $125,000 in 1998, $137,500 in 1999, $151,250
                  in 2000, and $166,375 in 2001, and $183,013 in 2002. As of
                  December 31, 2001, $189,207 was owed to Mr. DePhillipo for
                  compensation earned under the employment agreement.

                  The Company has entered into a consulting agreement with Dr.
                  Ricciardi (shareholder and officer) dated February 24, 1998,
                  which provides for initial compensation of $30,000 in 1998,
                  $60,000 in 1999, $66,000 in 2000, $72,600 in 2001 and $79,860
                  in 2002. The initial term of the agreement is five (5) years.


                                       38
<PAGE>
                                                                  GENELINK, INC.
                                                   NOTES TO FINANCIAL STATEMENTS

9 - TRANSACTIONS
    WITH RELATED
    PARTIES
    (CONTINUED)

                  As of December 31, 2001, $168,600 was owed to Dr. Ricciardi
                  for services rendered under the consulting agreement.

10 - COMMITMENT
     & CONTINGENCIES

                  The Company is involved in a trademark opposition regarding
                  the use of its trademark GeneLink. However, management
                  believes it will prevail in this matter, and will have no
                  material adverse effect on the Company.


                                       39
<PAGE>
ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

         None.

PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS.

         Incorporated by reference is the information beginning after the
caption "Election of Directors" contained in our definitive Proxy Statement to
be filed no later than 120 days after the close of our fiscal year ended
December 31, 2001 (the "2002 Proxy Statement").

Section 16(a)     Beneficial Ownership Reporting Compliance.

         Based solely on our review of certain reports filed with the Securities
and Exchange Commission pursuant to Section 16(a) of the Securities Exchange Act
of 1934 (the "1934 Act"), as amended and written representations of the
Company's officers and directors, we believe that all reports required to be
filed pursuant to the 1934 Act with respect to transactions in our Common Stock
through December 31, 2000 were filed on a timely basis.

ITEM 10. EXECUTIVE COMPENSATION

         Incorporated by reference is the information beginning after the
caption "Executive Compensation" in our 2002 Proxy Statement.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         Incorporated by reference is the information beginning after the
caption "Security Ownership of Certain Beneficial Owners and Management in our
2002 Proxy Statement.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         None.

ITEM 13.

(a)      EXHIBITS, LIST AND REPORTS ON FORM 8-K

         Exhibit

         3(i)     Articles of Incorporation of the Registrant(1)

         3(ii)    By-Laws of the Registrant(1)

         10       Material Contracts


                                       40
<PAGE>
         10.1     DNA Specimen Repository Agreement Between University of North
                  Texas Health Science Center at Fort Worth and GeneLink, Inc.
                  dated June 21, 1995;(1)

         10.2     Amendment No. 1 to Agreement Between GeneLink, Inc. and
                  University of North Texas Health Science Center at Fort Worth
                  dated November 5, 1995;(1)

         10.3     Collateral License Agreement By and Between GeneLink, Inc. and
                  University of North Texas Health Science Center dated July 1,
                  1996;(1)

         10.4     Employment Agreement By and Between GeneLink, Inc. and John R.
                  DePhillipo dated February 24, 1998;(1)

         10.5     Amendment to Employment Agreement By and Between GeneLink,
                  Inc. and John R. DePhillipo dated December 31, 1998;(1)

         10.6     Consulting Agreement By and Between GeneLink, Inc. and Robert
                  P. Ricciardi, Ph.D. dated February 24, 1998;(1)

         10.7     Amendment to Consulting Agreement By and Between GeneLink,
                  Inc. and Robert P. Ricciardi, Ph.D. dated December 31, 1998.
                  (1)

         10.8     Agreement Providing for the Provision of Consulting, Marketing
                  and Sales Services to GeneLink, Inc. by KWS&P, Inc.(1)

         10.9     Letter from Office of Device Evaluation Center for Devices and
                  Radiological Health to GeneLink, Inc. dated January 23,
                  1996(1)

         10.10    2000 Stock Option Plan(2)

23       Consent of Accountants

(1)      Incorporated by reference to our Registration Statement for 10-SB/A
         filed with the Securities and Exchange Commission on February 8, 2000.

(2)      Incorporated by reference to out Proxy Statement for the 2000 Annual
         Meeting of Shareholders filed with the Securities and Exchange
         Commission on November 30, 2000.

(b)      REPORTS ON FORM 8-K

         None.


                                       41
<PAGE>
                                   SIGNATURES

         In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.

                                        GENELINK, INC.
                                        Registrant

Date: March 25, 2002                    By:      /s/ John R. DePhillipo
                                            ------------------------------------
                                            John R. DePhillipo, Chairman, Chief
                                            Executive Officer and President

         In accordance with the Exchange Act this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
the dates indicated.

<TABLE>
<CAPTION>
SIGNATURES                                                 CAPACITY                                        DATE
----------                                                 --------                                        ----
<S>                                                        <C>                                             <C>
 /s/ John R. DePhillipo                                    Principal Executive Officer, Principal          March 25, 2002
------------------------------------
John R. DePhillipo                                         Financial Officer and Director
Chairman and Chief Executive Officer

/s/ Robert P. Ricciardi                                    Director                                        March 25, 2002
------------------------------------
Robert P. Ricciardi
</TABLE>

                                       42