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U.S. SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 QUARTERLY REPORT FOR THE QUARTERLY PERIOD
ENDED JUNE 30, 2007
 COMMISSION FILE NO. 0-28077
 GENELINK, INC.
  PENNSYLVANIA
    
    23-2795613(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)Newport Financial Center123 Town Square PlaceJersey City, New Jersey
    
    07310(Address of principal executive offices)
    
    (Zip Code)
  þ o
  Number of Shares of Common StockOutstanding on August 1, 2007
    
    45,094,183
 o þ




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PART I.
    
    FINANCIAL INFORMATIONPageITEM 1
    
    Financial Statements.Consolidated Balance Sheets at June 30, 2007 (unaudited) and December 31, 2006
    
    3Consolidated Statements of Income for the three months and six months ended June 30, 2007 and 2006 (unaudited)
    
    4Consolidated Statements of Cash Flows for the six months ended June 30, 2007 and 2006 (unaudited)
    
    5-6Notes to Interim Consolidated Financial Statements
    
    7-9
 2




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GENELINK, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
 (Unaudited)June 30, 2007
    
    December 31, 2006ASSETSCash and cash equivalents
    
    $
    42,657
    
    
    $
    149,695Accounts receivable
    
    
    31,191
    
    
    
    32,185Inventory
    
    
    4,281
    
    
    
    5,772Prepaid expenses
    
    
    11,273
    
    
    
    14,421Total current assets
    
    
    89,402
    
    
    
    202,073Property and equipment
    
    
    119,005
    
    
    
    131,645Other assets
    
    
    379,046
    
    
    
    380,675Total assets
    
    $
    587,453
    
    
    $
    714,393LIABILITIESAccounts payable and accrued expenses
    
    $
    396,681
    
    
    $
    365,590Deferred Revenue
    
    
    6,666
    
    
    
    15,481Loans payable to officers
    
    
    18,000
    
    
    
    18,000Total current liabilities
    
    
    421,347
    
    
    
    399,071Convertible secured promissory notes payable
    
    
    853,812
    
    
    
    622,890Accrued compensation
    
    
    774,631
    
    
    
    710,323Total liabilities
    
    
    2,049,790
    
    
    
    1,732,284SHAREHOLDERS EQUITY (DEFICIENCY)Common stock, $.01 par value, 125,000,000 and
75,000,000 shares authorized as of June 30, 2007 and
December 31, 2006, respectively, 44,917,863 and
41,738,988 shares issued, 44,511,694 and 41,332,814
outstanding as of June 30, 2007 and December 31, 2006,
respectively
    
    
    449,179
    
    
    
    417,390Additional paid in capital
    
    
    7,082,355
    
    
    
    6,982,849Stock warrants
    
    
    3,020,259
    
    
    
    3,011,009Accumulated deficit
    
    
    (11,699,075
    )
    
    
    (11,114,084
    )Treasury stock, 406,169 shares as of June 30, 2007 and
December 31, 2006, at cost
    
    
    (315,055
    )
    
    
    (315,055
    )Total shareholders equity (deficiency)
    
    
    (1,462,337
    )
    
    
    (1,017,891
    )Total liabilities and shareholders
equity (deficiency)
    
    $
    587,453
    
    
    $
    714,393
 The accompanying notes are an integral part of the consolidated financial statements
 3




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GENELINK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 For The
    
    For The
    
    For The
    
    For TheThree Months
    
    Three Months
    
    Six Months
    
    Six MonthsEnded
    
    Ended
    
    Ended
    
    EndedJune 30, 2007
    
    June 30, 2006
    
    June 30, 2007
    
    June 30, 2006REVENUE
    
    $
    27,682
    
    
    $
    35,642
    
    
    $
    59,067
    
    
    $
    83,337COST OF GOODS SOLD
    
    
    20,747
    
    
    
    21,086
    
    
    
    45,870
    
    
    
    27,728GROSS PROFIT
    
    
    6,935
    
    
    
    14,556
    
    
    
    13,197
    
    
    
    55,609EXPENSESSelling, general and administrative
    
    
    124,090
    
    
    
    151,652
    
    
    
    275,975
    
    
    
    258,664Consulting
    
    
    36,000
    
    
    
    44,730
    
    
    
    67,648
    
    
    
    90,810Professional fees
    
    
    57,205
    
    
    
    54,904
    
    
    
    221,320
    
    
    
    141,092Advertising and promotion
    
    
    662
    
    
    
    6,245
    
    
    
    4,896
    
    
    
    8,494Amortization and depreciation
    
    
    14,174
    
    
    
    12,963
    
    
    
    28,348
    
    
    
    25,815232,131
    
    
    
    270,494
    
    
    
    598,187
    
    
    
    524,875NET LOSS BEFORE PROVISION FOR INCOME TAXES
    
    
    (225,196
    )
    
    
    (255,938
    )
    
    
    (584,990
    )
    
    
    (469,266
    )PROVISIONS FOR INCOME TAXES
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0NET LOSS
    
    $
    (225,196
    )
    
    $
    (255,938
    )
    
    $
    (584,990
    
    
    $
    (469,266
    )NET LOSS PER SHARE, BASIC AND DILUTED
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )
    
    $
    (0.01
    )Weighted average common shares and diluted
potential common shares
    
    
    44,703,974
    
    
    
    38,640,897
    
    
    
    42,998,189
    
    
    
    37,265,156
 The accompanying notes are an integral part of the consolidated financial statements
 4




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GENELINK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Six months ended June 30
    
    2007
    
    2006CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (584,990
    )
    
    $
    (469,266
    )Adjustments to reconcile net loss to net cash used by
operating activitiesDepreciation and amortization
    
    
    28,348
    
    
    
    25,815Amortization of discounts on loans payable
    
    
    40,478
    
    
    
    27,432Common stock issued for services
    
    
    0
    
    
    
    24,326Changes in operating assets and liabilitiesAccounts receivable
    
    
    994
    
    
    
    (4,918
    )Inventory
    
    
    1,491
    
    
    
    (4,361
    )Prepaid expenses
    
    
    3,148
    
    
    
    13,810Other assets
    
    
    0
    
    
    
    (5,000
    )Accounts payable and accrued expenses
    
    
    40,644
    
    
    
    (47,351
    )Deferred Revenue
    
    
    (8,815
    )
    
    
    37,699Accrued payroll taxes
    
    
    0
    
    
    
    (7,454
    )Accrued compensation
    
    
    64,308
    
    
    
    58,462Net cash used by operating activities
    
    
    (414,394
    )
    
    
    (350,806
    )CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures
    
    
    (6,025
    )
    
    
    (12,799
    )Patent acquisition costs
    
    
    (19,494
    )
    
    
    (15,599
    )Net cash used by investing activities
    
    
    (25,519
    )
    
    
    (28,398
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from loans and notes payable
    
    
    332,875
    
    
    
    358,541Repayment of loan and notes payable
    
    
    0
    
    
    
    (17,861
    )Proceeds relating to issuance of common stock (net)
    
    
    0
    
    
    
    105,158Net cash provided by financing activities
    
    
    332,875
    
    
    
    445,838
 The accompanying notes are an integral part of the consolidated financial statements
 5




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GENELINK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Six months ended June 30
    
    2006
    
    2005NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    (107,038
    )
    
    
    66,634Cash and cash equivalents, beginning of period
    
    
    149,695
    
    
    
    15,275Cash and cash equivalents, end of period
    
    $
    42,657
    
    
    $
    81,909SUPPLEMENTAL CASH FLOW INFORMATIONCash paid for interest
    
    $
    0
    
    
    $
    941Non-cash financing transactions:Common stock issued for services
    
    $
    0
    
    
    $
    24,326Common stock and stock warrants granted for fundraising
    
    $
    12,938
    
    
    $
    44,100Conversion of bridge loan and accrued interest to
convertible secured loans
    
    $
    0
    
    
    $
    207,891Conversion of notes payable and accrued interest into
common stock
    
    $
    121,131
    
    
    $
    0
 The accompanying notes are an integral part of the consolidated financial statements
 6




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1    
    
    DESCRIPTION OF
ORGANIZATIONOrganizationGeneLink, Inc. (the
Company) and Subsidiary
(Dermagenetics, Inc.) operate in New
Jersey. The Company was organized
under the laws of the Commonwealth
of Pennsylvania and Dermagenetics,
Inc. was 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
Jersey City, New Jersey.The Company was founded in response
to the information being generated
in the field of human molecular
genetics. Scientists are
discovering an increasing number of
connections between genes and
specific diseases or physical
attributes and tendencies. These
findings are a direct result of the
National Institute of Health Genome
Project.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. The Company received a U.S.
patent Kits and Methods for
Assessing Skin Health for its
proprietary method for assessing
skin health and for the application
of a therapeutic skin health regimen
related to its assessment. The
Company received an international
patent (Australia) Kits and Methods
for Assessing Oxidative Stress for
its proprietary method of predicting
oxidative (free radical) damage in
humans.The Company has also developed
proprietary (patent pending)
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 selected 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.
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2    
    
    BASIS OF
PRESENTATIONThe accompanying unaudited financial
statements have been prepared by the
Company in accordance with the
instructions to Form 10-QSB 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 financial statements and notes
thereto included in the Annual
Report on Form 10-KSB of GeneLink,
Inc. and subsidiary for the year
ended December 31, 2006.In the opinion of management, all
adjustments (consisting of normal
recurring accruals) necessary to
present fairly the information set
forth in the accompanying financial
statements have been included. The
results reported in these financial
statements for the six-month period
ended June 30, 2007 should not be
regarded as necessarily indicative
of results that may be expected for
the year ended December 31, 2007.3    
    
    RELATED PARTY
TRANSACTIONS AND CONVERTIBLE
SECURED PROMISSORY NOTES
    
    On January 12, 2007, pursuant to the
terms of a Convertible Secured Loan
Agreement dated May 12, 2006 (the
Loan Agreement), the Company
issued an additional $50,000
convertible secured loan promissory
note with interest accruing at 12%
per annum, maturing May 12, 2011.
The Company issued 250,000 shares of
common stock as a condition of the
Loan Agreement.On June 6, 2007, pursuant to the
terms of a Convertible Secured Loan
Agreement dated May 12, 2006 (the
Loan Agreement), the Company
issued an additional $87,000
convertible secured loan promissory
note with interest accruing at 12%
per annum, maturing May 12, 2011.
The Company issued 437,500 shares of
common stock as a condition of the
Loan Agreement.The Company issued to First Equity
Capital Securities, Inc., as
Administrative Agent under the Loan
Agreement, 68,750 shares of
restricted common stock and a
warrant to acquire 275,000
restricted shares of common stock at
an exercise price of $.05 per share
in connection with the notes. The
Company also paid First Equity
Capital Securities, Inc. a placement
fee of 7%, or $26,600, of all loans
raised in December 2006 and January
2007 in connection with the issuance
of the notes.
 8




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On January 26, 2007, two note
holders converted $121,131.19 of
principal and interest of
convertible secured promissory notes
into 2,422,625 shares of restricted
common stock.4    
    
    SUBSEQUENT EVENT
    
    On July 24, 2007, a note holder
converted $25,399 of principal and
interest of a convertible secured
promissory note into 507,988 shares
of restricted common stock.
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   BUSINESS OPERATIONS AND HISTORY
     10




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®
 LIQUIDITY AND CAPITAL RESOURCES
    COMPARISON OF THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2007 TO SIX MONTHS ENDED JUNE 30, 2006
 Financial Condition
   11




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Current Year Performance and Earnings Outlook
      FACTORS AFFECTING THE COMPANYS BUSINESS AND PROSPECTS
  12




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ITEM 3. CONTROLS AND PROCEDURES.
 Evaluation of Disclosure Controls and Procedures
   Change In Internal Controls
   Exhibits and Reports on Form 8-K
     13




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GENELINK, INC.
(Registrant)Date:  August 13, 2007
    By:
    /s/ Monte E. Taylor, Jr.Monte E. Taylor, Jr.Chief Executive Officer andActing Chief  Financial Officer 14