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U.S. SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-QSB
 QUARTERLY REPORT FOR THE QUARTERLY PERIOD
ENDED SEPTEMBER 30, 2007
 COMMISSION FILE NO. 0-28077
 GENELINK, INC.
  PENNSYLVANIA
    
    00-30518
    
    23-2795613(State or other jurisdiction of 
incorporation or organization)
    
    (Commission File No.)
    
    (I.R.S. Employer Identification No.)
 Newport
Financial Center, 123 Town Square Place, # 313, Jersey City, NJ
07310
   þ  ̈
  ̈ þ
  Number of Shares of Common Stock Outstanding on November 1, 2007
    
    47,256,594
  ̈ þ








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PART I. FINANCIAL INFORMATIONITEM 1. Financial Statements.Consolidated Balance Sheets at September 30, 2007 (unaudited) and December 31, 2006
    
    
    3Consolidated Statements of Operations for the three months and nine months ended
September 30, 2007 and 2006 (unaudited)
    
    
    4-5Consolidated Statements of Cash Flows for the nine months ended September 30, 2007
and 2006 (unaudited)
    
    
    6-7Notes
to Financial Statements
    
    
    8-10Certification of Chief Executive Officer and Chief Financial OfficerCertification pursuant to 18 U.S.C. Section 1350
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GENELINK, INC. AND SUBSIDIARY
 
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)September 30, 2007
    
    December 31, 2006ASSETSCurrent AssetsCash
    
    $
    44,760
    
    
    $
    149,695Accounts receivable
    
    
    31,943
    
    
    
    32,185Inventory
    
    
    4,156
    
    
    
    5,772Prepaid expenses
    
    
    11,273
    
    
    
    14,421Total current assets
    
    
    92,132
    
    
    
    202,073Property and equipment
    
    
    110,281
    
    
    
    131,645Other assets
    
    
    377,595
    
    
    
    380,675Total assets
    
    $
    580,008
    
    
    $
    714,393LIABILITIESCurrent liabilitiesAccounts payable and accrued expenses
    
    $
    447,430
    
    
    $
    365,590Deferred revenue
    
    
    3,265
    
    
    
    15,481Loans payable
    
    
    118,000
    
    
    
    18,000Total current liabilities
    
    
    568,695
    
    
    
    399,071Convertible secured promissory notes payable
    
    
    828,812
    
    
    
    622,890Accrued compensation
    
    
    144,168
    
    
    
    710,323Total liabilities
    
    
    1,541,675
    
    
    
    1,732,284STOCKHOLDERS EQUITY (DEFICIT)Common stock, par value $0.01 per share;
authorized: 125,000,000 shares and
75,000,000 as of September 30, 2007 and
December 31, 2006, respectively; issued: 45,425,863
and 41,738,988 shares as of
September 30, 2007 and December 31, 2006,
respectively; outstanding: 45,019,682 and
41,332,814 shares as of September 30, 2007
and December 31, 2006, respectively
    
    
    454,259
    
    
    
    417,390Additional paid-in capital
    
    
    7,611,291
    
    
    
    6,982,849Stock warrants
    
    
    3,537,659
    
    
    
    3,011,009Accumulated deficit
    
    
    (12,249,821
    )
    
    
    (11,114,084
    )Treasury stock, 406,169 shares
as of September 30, 2007 and
December 31, 2006, at cost
    
    
    (315,055
    )
    
    
    (315,055
    )Total shareholders equity (deficiency)
    
    
    (961,667
    )
    
    
    (1,017,891
    )Total liabilities and shareholders equity
(deficiency)
    
    $
    580,008
    
    
    $
    714,393
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GENELINK, INC. AND SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 Three months ended September 30,
    
    2007
    
    2006REVENUE
    
    $
    26,150
    
    
    $
    59,122COST OF GOODS SOLD
    
    
    11,608
    
    
    
    25,916GROSS PROFIT
    
    
    14,542
    
    
    
    33,206EXPENSESSelling, general and administrative
    
    
    78,386
    
    
    
    91,892Fair value
of options and warrants granted
    
    
    363,400
    
    
    
    0Consulting
    
    
    21,000
    
    
    
    34,265Professional fees
    
    
    44,901
    
    
    
    14,803Advertising and promotion
    
    
    1,580
    
    
    
    1,450Interest expense
    
    
    41,847
    
    
    
    20,701Amortization and depreciation
    
    
    14,175
    
    
    
    8,793565,289
    
    
    
    171,904NET LOSS BEFORE PROVISION FOR INCOME TAXES
    
    
    (550,747
    )
    
    
    (138,698
    )PROVISIONS FOR INCOME TAXES
    
    
    0
    
    
    
    0NET LOSS
    
    $
    (550,747
    )
    
    $
    (138,698
    )NET LOSS PER SHARE BASIC AND DILUTED
    
    $
    (0.01
    )
    
    $
    (0.003
    )Weighted average common shares and diluted
potential common shares
    
    
    45,307,320
    
    
    
    39,923,988
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GENELINK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 Nine months ended September 30,
    
    2007
    
    2006REVENUE
    
    $
    85,216
    
    
    $
    142,458COST OF GOODS SOLD
    
    
    57,478
    
    
    
    53,643GROSS PROFIT
    
    
    27,738
    
    
    
    88,815EXPENSESSelling, general and administrative
    
    
    266,697
    
    
    
    296,942Fair value
of options and warrants granted
    
    
    363,400
    
    
    
    0Consulting
    
    
    88,648
    
    
    
    138,989Professional fees
    
    
    266,221
    
    
    
    155,895Advertising and promotion
    
    
    6,476
    
    
    
    4,317Interest expense
    
    
    129,510
    
    
    
    66,028Amortization and depreciation
    
    
    42,522
    
    
    
    34,6081,163,474
    
    
    
    696,779NET LOSS BEFORE PROVISION FOR
INCOME TAXES
    
    
    (1,135,736
    )
    
    
    (607,964
    )PROVISION FOR INCOME TAXES
    
    
    0
    
    
    
    0NET LOSS
    
    $
    (1,135,736
    )
    
    $
    (607,964
    )NET LOSS PER SHARE BASIC AND DILUTED
    
    $
    (0.02
    )
    
    $
    (0.02
    )Weighted average common shares and diluted
potential common shares
    
    
    43,890,272
    
    
    
    38,073,769
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GENELINK, INC. AND SUBSIDIARY
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (UNAUDITED)
 Nine months ended September 30,
    
    2007
    
    2006CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (1,135,736
    )
    
    $
    (607,964
    )Adjustments to reconcile net loss to net cash
used by operating activitiesDepreciation and amortization
    
    
    42,522
    
    
    
    34,608Amortization of discounts on loans payable
    
    
    55,352
    
    
    
    33,177Common stock issued for services
    
    
    0
    
    
    
    24,326Fair value of options and warrants granted
    
    
    363,400
    
    
    
    0Changes in operating assets and liabilitiesAccounts receivable
    
    
    242
    
    
    
    (1,487
    )Inventory
    
    
    1,616
    
    
    
    (3,243
    )Prepaid expenses
    
    
    3,148
    
    
    
    19,574Other assets
    
    
    0
    
    
    
    (4,272
    )Deferred revenue
    
    
    (12,216
    )
    
    
    22,148Accounts payable and accrued expenses
    
    
    91,792
    
    
    
    (1,718
    )Accrued payroll taxes
    
    
    0
    
    
    
    (7,454
    )Accrued compensation
    
    
    96,462
    
    
    
    87,693Net cash used in operating activities
    
    
    (493,418
    )
    
    
    (404,612
    )CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures
    
    
    (6,633
    )
    
    
    (18,322
    )Patent acquisition costs
    
    
    (37,759
    )
    
    
    (19,114
    )Net cash used by investing activities
    
    
    (44,392
    )
    
    
    (37,436
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from loans and note payable
    
    
    432,875
    
    
    
    358,541Repayment of loans and notes payable
    
    
    0
    
    
    
    (17,861
    )Proceeds relating to issuance of common
stock, net
    
    
    0
    
    
    
    105,158Net cash provided by financing activities
    
    
    432,875
    
    
    
    445,838
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GENELINK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Nine months ended September 30,
    
    2007
    
    2006NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
    
    104,935
    
    
    $
    3,790Cash and cash equivalents, beginning of period
    
    
    149,695
    
    
    
    15,275Cash and cash equivalents, end of period
    
    
    44,760
    
    
    $
    19,065SUPPLEMENTARY CASH FLOW INFORMATIONCash paid for interest
    
    $
    0
    
    
    $
    1,165Non-cash financing transactionsIssuance of common stock for services
    
    $
    0
    
    
    $
    24,326Stock options and warrants granted
    
    $
    363,400
    
    
    $
    0Common 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 to common stock
    
    $
    146,532
    
    
    $
    0Stock options granted for payment of accrued
compensation
    
    $
    662,617
    
    
    $
    0
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GENELINK, INC. AND SUBSIDIARY
 
 NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
 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.2 BASIS OF
         PRESENTATION
    
    The 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 nine-month period ended
September 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
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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.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.On July 24, 2007, a noteholder converted $25,399 of
principal and interest of a convertible secured
promissory note into 507,988 shares of restricted
common stock.On September 30, 2007, the Company converted
$662,617 of accrued compensation owed to a Board
Member into a warrant to acquire 1,400,000 shares
of common stock at an exercise price of $0.11 per
share.4 NOTE PAYABLE
    
    The Company entered into a $100,000 loan agreement
payable on August 9, 2008, with interest accruing
at 12% per annum. Upon the initial closing of the
Companys equity offering on November 9, 2007, the
principal amount and all accrued interest of this
obligation automatically converted into the
Companys common stock and warrants upon the terms
of the offering. See Note 6, Subsequent Event,
below.5 STOCKHOLDERS
         EQUITY
         TRANSACTIONS
    
    On June 1, 2007 the Company granted three
executives options to acquire 3,350,000 shares of
common stock at an exercise price of $.08 vesting
immediately, and granted, pursuant to the Companys
2007 Option Plan, options to acquire 3,050,000
shares of common stock at an exercise price of $.08
per share vesting in four equal annual installments
commencing June 1, 2007. The Company recorded
compensation expense of $329,000 related to the
vested options.On June 1, 2007, the Company granted to each member
of its scientific advisory board options to acquire
140,000 shares of common stock at an exercise price
of $.08 vesting immediately, and granted, pursuant
to the Companys 2007 Option Plan, options to
acquire 165,000 shares of common stock at an
exercise price of $.08 per share vesting in four
equal annual installments commencing June 1, 2007.
The Company recorded compensation expense of
$24,400 related to the vested options.
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On June 1, 2007, the Company granted to each member
of its board options to acquire 500,000 shares of
common stock at an exercise price of $.08 vesting
in four equal annual installments commencing June
1, 2007 pursuant to the Companys 2007 Option Plan.
The Company recorded compensation expense of
$10,000 related to the vested options.6 SUBSEQUENT EVENT
    
    On November 9 and 13, 2007, the Company sold a
total of $1,165,525 of Units (each unit consisting
of one share of common stock and a warrant to
acquire 1/4 of one share of common stock at an
exercise price of $.10 per share) at a price of
$.075 per unit. This amount includes $100,000
principal amount plus accrued interest of note
payable (See Note 4).A total of 15,540,328 shares of common stock of the
Company and warrants to acquire a total of
3,885,082 shares of common stock were issued. The
Company also paid a total of $101,502 and issued
warrants to acquire 2,114,624 shares of common
stock to advisors in connection with the Units.
Included in this total is payment of $36,702 of
fees and issuance of warrants to acquire 764,624
shares of common stock to First Equity Capital
Securities, Inc. Kenneth R. Levine a holder of
more than five percent of the equity of the Company
is an officer and owner of First Equity Capital
Securities. The Company will also be responsible
for reimbursing out of pocket costs incurred by
such advisors in an amount not to exceed 3% of the
proceeds raised by such advisors.
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ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
   BUSINESS OPERATIONS AND HISTORY
   TM
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LIQUIDITY AND CAPITAL RESOURCES
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COMPARISON
OF THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007 TO THE THREE AND NINE MONTHS ENDED
SEPTEMBER 30, 2006
 Financial Condition
   Current Year Performance and Earnings Outlook
 Revenues
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Expenses
  Losses
  FACTORS AFFECTING THE COMPANYS BUSINESS AND PROSPECTS
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®
 ITEM 3. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Change In Internal Controls
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(a)
    
    Exhibit No.31.1 Certification of Chief Executive Officer and Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act of 200232.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.(b)
    
    Reports on Form 8-K.The Company filed a Current Report on Form 8-K dated September 22, 2007 in
connection with a compensation arrangement entered into with an officer and
director of the Company.
   GENELINK, INC.
 Date: November 13, 2007
    By:
    /s/ Monte E. Taylor, Jr.Monte E. Taylor, Jr.,Chief Executive Officer and ActingFinancial Officer - 16 -