##### Table of Contents



U.S. SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q/A
 (Amendment
No. 1)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File No. 000-30518
 GENELINK, INC.
 (Exact name of registrant specified in its charter)
 PENNSYLVANIA
    
    23-2795613(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)317 Wekiva Springs Road, #200
Longwood, Florida
    
    32779(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code
 þ o
 Yes
o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o þ
  Number of Shares of Common Stock 
Outstanding on October 30, 2009
    
    110,712,025




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##### 



EXPLANATORY NOTE
 
 
  
  
 
 PagePART I. FINANCIAL INFORMATIONITEM 1 Financial Statements.Consolidated Balance Sheets at June 30, 2009 (unaudited) and December 31, 2008
    
    
    3Consolidated
Statements of Income (unaudited) for the three months and six
months ended June 30, 2009 and 2008
    
    
    4Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 2009 and 2008
    
    
    5-6Notes to Consolidated Financial Statements
    
    
    7-10Exhibit 31.1Exhibit 32.1
 
   2




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GENELINK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)June 30, 2009
    
    
    December 31, 2008ASSETSCash and cash equivalents
    
    $
    347,941
    
    
    $
    435,197Accounts receivable
    
    
    613,481
    
    
    
    713,565Inventory
    
    
    654,541
    
    
    
    739,515Prepaid expenses
    
    
    66,309
    
    
    
    53,688Total current assets
    
    
    1,682,272
    
    
    
    1,941,965Property and equipment
    
    
    247,591
    
    
    
    281,984Other assets
    
    
    317,279
    
    
    
    321,277Total assets
    
    $
    2,247,142
    
    
    $
    2,545,226LIABILITIESCurrent maturity of long-term debt
    
    $
    3,617
    
    
    $
    60,269Accounts payable and accrued expenses
    
    
    1,077,096
    
    
    
    2,034,322Accrued compensation
    
    
    199,710
    
    
    
    218,664Deferred revenue
    
    
    250,694
    
    
    
    161,727Loans payable
    
    
    18,000
    
    
    
    18,000Total current liabilities
    
    
    1,549,117
    
    
    
    2,492,982Convertible promissory notes payable, net of issuance of debt and
stock conversion discounts
    
    
    863,955
    
    
    
    0Total liabilities
    
    
    2,413,072
    
    
    
    2,492,982SHAREHOLDERS EQUITY (DEFICIENCY)Common stock, $.01 par value, 250,000,000 shares and 125,000,000
shares authorized as of June 30, 2009 and December 31, 2008,
respectively; 110,836,291 shares and 104,561,291 shares issued
as of June 30, 2009 and December 31, 2008 respectively;
106,477,132 shares and 100,202,132 shares outstanding as of
June 30, 2009 and December 31, 2008, respectively
    
    
    1,108,363
    
    
    
    1,045,613Additional paid in capital
    
    
    12,712,172
    
    
    
    12,235,833Stock warrants
    
    
    3,181,843
    
    
    
    2,608,240Accumulated deficit
    
    
    (16,616,073
    )
    
    
    (15,285,207
    )Treasury stock, 4,359,169 shares as of June 30, 2009 and December
31, 2008, at cost
    
    
    (552,235
    )
    
    
    (552,235
    )Total shareholders equity (deficiency)
    
    
    (165,930
    )
    
    
    52,244Total liabilities and shareholders equity (deficiency)
    
    $
    2,247,142
    
    
    $
    2,545,226
 The accompanying notes are an integral part of the consolidated financial statements
  3




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GENELINK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 For The
    
    
    For The
    
    
    For The
    
    
    For TheThree Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedJune 30, 2009
    
    
    June 30, 2008
    
    
    June 30, 2009
    
    
    June 30, 2008REVENUE
    
    $
    2,113,177
    
    
    $
    124,503
    
    
    $
    4,085,215
    
    
    $
    152,960COST OF GOODS SOLD
    
    
    937,532
    
    
    
    109,172
    
    
    
    1,862,307
    
    
    
    137,502GROSS PROFIT
    
    
    1,175,645
    
    
    
    15,331
    
    
    
    2,222,908
    
    
    
    15,458EXPENSESSelling, general and administrative
    
    
    1,936,388
    
    
    
    852,598
    
    
    
    3,447,555
    
    
    
    1,242,515Research and development
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    12,9511,936,388
    
    
    
    852,598
    
    
    
    3,447,555
    
    
    
    1,255,466OPERATING LOSS
    
    
    (760,743
    )
    
    
    (837,267
    )
    
    
    (1,224,647
    )
    
    
    (1,240,008
    )OTHER INCOME (EXPENSES)Amortization and depreciation
    
    
    (21,404
    )
    
    
    (23,695
    )
    
    
    (55,948
    )
    
    
    (37,063
    )Interest income (expense)
    
    
    (38,490
    )
    
    
    (246,517
    )
    
    
    (50,271
    )
    
    
    (279,901
    )(59,894
    )
    
    
    (270,212
    )
    
    
    (106,219
    )
    
    
    (316,964
    )NET LOSS BEFORE PROVISION FOR INCOME TAXES
    
    
    (820,637
    )
    
    
    (1,107,479
    )
    
    
    (1,330,866
    )
    
    
    (1,556,972
    )PROVISION FOR INCOME TAXES
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0NET LOSS
    
    $
    (820,637
    )
    
    $
    (1,107,479
    )
    
    $
    (1,330,866
    )
    
    $
    (1,556,972
    )NET LOSS PER SHARE, BASIC & DILUTED
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    (0.02
    )Weighted average common shares and
diluted potential common shares
    
    
    110,313,235
    
    
    
    70,518,164
    
    
    
    106,532,888
    
    
    
    67,634,734
 The accompanying notes are an integral part of the consolidated financial statements
  4




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GENELINK, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Six months ended June 30
    
    2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (1,330,866
    )
    
    $
    (1,556,972
    )Adjustments to reconcile net loss
to net cash used by operating activitiesDepreciation and amortization
    
    
    55,948
    
    
    
    37,063Amortization of discounts on loans payable
    
    
    19,295
    
    
    
    240,844Stock and warrants issued for services
    
    
    35,000
    
    
    
    0Common stock issued for services
    
    
    15,000
    
    
    
    0Fair value of options granted for services
    
    
    153,950
    
    
    
    84,200Changes in operating assets and liabilitiesAccounts receivable
    
    
    100,084
    
    
    
    (245,460
    )Inventory
    
    
    84,974
    
    
    
    (146,258
    )Prepaid expenses
    
    
    (12,621
    )
    
    
    (159,776
    )Other assets
    
    
    (8,592
    )
    
    
    24,000Accounts payable and accrued expenses
    
    
    (957,225
    )
    
    
    285,116Accrued compensation
    
    
    (18,954
    )
    
    
    (54,168
    )Deferred revenue
    
    
    88,967
    
    
    
    1,044,427Net cash used by operating activities
    
    
    (1,775,040
    )
    
    
    (446,984
    )CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures
    
    
    (8,414
    )
    
    
    (144,740
    )Patent acquisition costs
    
    
    (550
    )
    
    
    (25,488
    )Net cash used by investing activities
    
    
    (8,964
    )
    
    
    (170,228
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from loans and notes payable
    
    
    1,250,000
    
    
    
    0Proceeds from issuance of common stock and warrants, net
    
    
    617,500
    
    
    
    0Principal payments on capital lease obligation
    
    
    (32,560
    )
    
    
    (2,456
    )Principal payments on note payable
    
    
    (24,092
    )
    
    
    0Commissions paid for fundraising costs
    
    
    (114,100
    )
    
    
    0Purchase of treasury stock
    
    
    0
    
    
    
    (237,180
    )Proceeds from exercise of stock warrants
    
    
    0
    
    
    
    706,990Net cash provided by financing activities
    
    
    1,696,748
    
    
    
    467,354
 The accompanying notes are an integral part of the consolidated financial statements
  5




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GENELINK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Six months ended June 30
    
    2009
    
    
    2008NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (87,256
    )
    
    
    (149,858
    )Cash and cash equivalents, beginning of period
    
    
    435,197
    
    
    
    972,371Cash and cash equivalents, end of period
    
    $
    347,941
    
    
    $
    822,513SUPPLEMENTAL CASH FLOW INFORMATIONCash paid for interest
    
    $
    2,934
    
    
    $
    0Non-cash investing and financing transactions:Equipment acquired under capital lease
    
    $
    0
    
    
    $
    31,000Stock warrants granted for services
    
    $
    160,000
    
    
    $
    84,200Stock warrants granted for fundraising
    
    $
    178,795
    
    
    $
    0Conversion
of notes payable and accrued interest to common stock
    
    $
    0
    
    
    $
    882,041Common stock issued for services
    
    $
    15,000
    
    
    $
    0
 The accompanying notes are an integral part of the consolidated financial statements
  6




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##### Table of Contents



GENELINK, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1  DESCRIPTION OF
ORGANIZATIONOrganization
GeneLink, Inc. (the Company) and
its subsidiaries, GeneWize Life
Sciences, Inc. and Dermagenetics,
Inc., operate in Florida. The
Company was organized under the
laws of the Commonwealth of
Pennsylvania and Dermagenetics,
Inc. and GeneWize Life Sciences,
Inc. were organized under the laws
of the State of Delaware. The
Company is the successor to a
Delaware corporation organized
under the same name on September
21, 1994. The Companys offices
are located in Longwood, Florida.The Companys scientific
foundation developed as a result
of discoveries in the field of
human molecular genetics. Research
supported by the National
Institute of Health, including the
Human Genome Project, as well as
academic, commercial research and
research by the scientists on
GeneLinks Scientific Advisory
Board, enabled the identification
of an increasing number of
connections between genes, SNPs
(single-nucleotide polymorphisms)
and the specific function of
enzymes and receptors relating to
nutrition and skin health.The Company has developed
proprietary SNP-based genetic
profiles (named GeneLink
Nutragenetic Profile  and
Dermagenetics® profiles). These
profiles provide a means of
predicting an individuals
inherent genetic capacity to
combat such conditions as
oxidative stress and other
important areas of physiologic
health. The profiles, for
example, 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. The
Companys profile assessment
enables nutritional and skin care
companies and health care
professionals 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 and to help provide
individuals the best of health and
appearance.The Companys laboratory
assessments are performed under
contract in leading genomics
laboratories and have been
independently validated by the
laboratories. In early 2009, the
Company expanded its international
network of qualified laboratories
with the addition of a highly
automated United States based
clinical laboratory whose
credentials include College of
American Pathologists CAP
accreditation, CLIA certification,
and State of California licensure.
  7




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The enhanced laboratory
capabilities will allow the
Company to accommodate the
increased demand for genetic
testing and improve turnaround
time.The Company has developed and
received a patent on a DNA
Collection
Kit® for the
collection of DNA specimens of
clients. The kit is classified as
a non-medical device.On December 12, 2007, the Company
formed a new wholly owned
subsidiary, GeneWize Life
Sciences, Inc., to operate its
direct sales efforts. GeneWize is
the first direct selling company
to focus exclusively on marketing
nutritional supplements and skin
care products specifically
tailored to an individuals
genetic makeup.GeneWizes product offering in
2008 and first two quarters of
2009 consisted of its foundational
Life Map NutritionTM
System. The LifeMap
NutritionTMSystem is
the first comprehensive system of
personalized (mass customized)
nutritional supplement
manufacturing based on genetic
testing that measures single
nucleotide polymorphisms (SNPs;
pronounced snips) in DNA.
GeneLinks patented and patent
pending assessments, such as
GeneLink Healthy Aging
AssessmentTMand
Oxidative Stress, form the
foundation. Genetic test results
drive a proprietary algorithm that
generates a nutritional report
linked to an individual titration
matrix. In order help compensate
for any anticipated need for
additional supplementation,
genetically selected ingredients
and nutrients
(SNPboostsTM, or snip
boosts) are titrated and blended
into the individual nutritional
formulation. Thus, each
customers product is individually
customized and manufactured, just
for that customer.GeneWize, as a direct selling
company, offers customers the
opportunity to participate in
selling and distributing the
products to others and receive
compensation for doing so. These
independent marketing affiliates
must agree to comply with the
Companys policies related to
sales and distribution of product,
particularly as it relates to
product claims or, in the case of
recruiting other affiliates,
income potential. In return for
creating sales and complying with
appropriate policies and
regulations, GeneWize provides
commissions and incentives. It
also provides internet ordering
sites, business management tools,
marketing materials, training and
events in support of these
affiliates.
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2  BASIS OF
PRESENTATION

    
    The accompanying unaudited
consolidated financial statements
have been prepared by the Company
in accordance with the
instructions to Form 10-Q and
Article 10 of Regulation S-X
relating to interim financial
statements. Accordingly, they do
not include all of the information
and footnotes required by
generally accepted accounting
principles for complete financial
statements and should be read in
conjunction with the consolidated
financial statements and notes
thereto included in the Annual
Report on Form 10-K of GeneLink,
Inc. and Subsidiaries for the
year ended December 31, 2008.In the opinion of management, all
adjustments (consisting of normal
recurring accruals) necessary to
present fairly the information set
forth in the accompanying
consolidated financial statements
have been included. The results
reported in these consolidated
financial statements for the
three-month period ended June 30,
2009 should not be regarded as
necessarily indicative of results
that may be expected for the year
ended December 31, 2009.3 STOCKHOLDERS
EQUITY
TRANSACTIONS AND
CONVERTIBLE
SECURED
PROMISSORY NOTES

    
    During the six months ended
June 30, 2009, the Company sold
6,175,000 shares of restricted
Common Stock of the Company at a
purchase price of $0.10 per share
pursuant to a continued
Confidential Private Offering
Memorandum, and received an
aggregate gross amount of
$617,500. The Company granted
375,000 Warrants to acquire shares
of Common Stock at an exercise
price of $0.11 to investors in
connection with the purchase.During the six months ended June
30, 2009, the Company issued
$1,250,000 principal amount of
Convertible Notes and issued
1,875,000 Warrants to acquire
shares of Common Stock at an
exercise price of $0.11 per share
in connection therewith. The
Warrants are exercisable on or
after August 26, 2009 and on or
before February 26, 2014. Of the
$1,250,000 total proceeds,
$175,341 was allocated to the
warrants and $150,000 was
allocated to the conversion
feature.The Convertible Notes mature on
February 26, 2014 and bear
interest at the rate of 8% per
year through February 26, 2011 and
thereafter bear interest at the
rate of 10% per year. The
Convertible Notes may not be
prepaid without the approval of
the holders of the Convertible
Notes.The Convertible Notes are
convertible at the option of the
holders of the Convertible Notes.
A mandatory conversion of the
Convertible Notes will occur if
after the Initial Conversion Date
the closing price of the Common
Stock of the Company is at least
$0.50 per share for 30 consecutive
trading days.The conversion price for the
Convertible Notes is $0.10 per
share, subject to adjustment in
the event of a stock split,
combination, reclassification,
reorganization or similar event.During the six months ended June
30, 2009, the Company issued
Common Stock valued at $15,000 and
paid $10,000 as advances on
commissions for investment banking
services.
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In connection with the convertible
secured promissory notes and
shares of Common Stock issued, the
Company paid cash commissions of
$114,100 and granted 178,795
Warrants to acquire shares of
Common Stock at exercise prices of
$0.10 and $0.11 per share, to
First Equity Capital Securities,
Inc., as the agent for the
offering, which has been recorded
as a reduction of the proceeds in
accordance with AICPA Technical
Practice Aid 4110.01. First
Equity Capital Securities, Inc. is
owned and controlled by Kenneth R.
Levine, a holder of more than five
percent of the outstanding common
stock of the Company.During the six months ended June
30, 2009, the Company granted
1,225,000 Warrants to acquire
shares of Common Stock at exercise
prices of $0.13 and $0.16 per
share for services provided.On June 1, 2009, the shareholders
of the Company approved an
amendment to the Companys
Articles of Incorporation to
increase the authorized capital of
the Company from 125,000,000
shares of Common Stock, $0.01 par
value, to 250,000,000 shares of
Common Stock, $0.01 par value, and
adopted the Companys 2009 Stock
Option Plan.4 SUBSEQUENT EVENTS

    
    In July 2009, the Company
sold an additional $305,000 of
restricted Common Stock at a
purchase price of $.10 per share
(see Note 3).
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ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   GENERAL
    OVERVIEW
  .
  11




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Me (made exclusively) Me Me
    12




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LIQUIDITY AND CAPITAL RESOURCES
     COMPARISON OF THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2009 TO THE THREE MONTHS AND SIX
MONTHS ENDED JUNE 30, 2008
 Financial Condition
    13




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Results of Operations
 Revenues
 Gross Profit
 Expenses
 ,
 Operating Losses
 Net Losses
  14




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FACTORS AFFECTING THE COMPANYS BUSINESS AND PROSPECTS
   Item 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Item 4T.

CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
   15




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PART II. OTHER INFORMATION
 Item 1.
    
    LEGAL PROCEEDINGS
      Item 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
 1 2
 
 
  
  16




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Item 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
   Nominee
    
    Votes For
    
    
    Votes WithheldRobert Hoekstra
    
    
    52,496,208
    
    
    
    4,131,403Dr. Bernard L. Kasten, Jr.
    
    
    55,070,613
    
    
    
    1,556,998Robert P. Ricciardi, Ph.D.
    
    
    55,068,613
    
    
    
    1,558,998John H. Souza
    
    
    55,068,613
    
    
    
    1,558,998Monte E. Taylor, Jr.
    
    
    54,685,001
    
    
    
    1,642,610
  Votes For
    
    Votes Against
    
    
    Abstain55,433,560
    
    
    1,188,851
    
    
    
    5,200
  Votes For
    
    Votes Against
    
    
    Abstain55,096,856
    
    
    1,521,505
    
    
    
    9,250
 Item 5.
    
    OTHER INFORMATION
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Item 6.
    
    EXHIBITS AND REPORTS ON FORM 8-K
 Exhibit No.
    
    Description31.1
    
    
    Certificate of the Chief Executive Officer and
Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    
    Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
   
 GENELINK, INC.
(Registrant)Date: November 5, 2009
    By:
    /s/ Monte E. Taylor, Jr.Monte E. Taylor, Jr., Chief Executive Officer andChief Financial Officer 
  18