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U.S. SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 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.
  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 November 10, 2009
    
    
    110,712,025




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PagePART I. FINANCIAL INFORMATIONITEM 1 Financial StatementsConsolidated Balance Sheets at September 30, 2009 (unaudited) and December 31, 2008
    
    
    3Consolidated Statements of Income (unaudited) for the three months and nine months ended September 30, 2009 and 2008
    
    
    4Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2009 and 2008
    
    
    5-6Notes to Consolidated Financial Statements
    
    
    7-10EX-31.1EX-32.1
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GENELINK, INC. AND SUBSIDIARIES


CONSOLIDATED BALANCE SHEETS
 (Unaudited)September 30, 2009
    
    
    December 31, 2008ASSETSCurrent AssetsCash and cash equivalents
    
    $
    425,905
    
    
    $
    435,197Accounts receivable
    
    
    422,737
    
    
    
    713,565Inventory
    
    
    516,275
    
    
    
    739,515Prepaid expenses
    
    
    161,089
    
    
    
    53,688Total current assets
    
    
    1,526,006
    
    
    
    1,941,965Property and equipment
    
    
    324,621
    
    
    
    281,984Other assets
    
    
    285,709
    
    
    
    321,277Total assets
    
    $
    2,136,336
    
    
    $
    2,545,226LIABILITIESCurrent maturity of long-term debt
    
    $
    0
    
    
    $
    60,269Accounts payable and accrued expenses
    
    
    1,157,400
    
    
    
    2,034,322Accrued compensation
    
    
    204,380
    
    
    
    218,664Deferred revenue
    
    
    397,285
    
    
    
    161,727Loans payable
    
    
    18,000
    
    
    
    18,000Total current liabilities
    
    
    1,777,065
    
    
    
    2,492,982Convertible promissory notes payable, net of issuance of debt and
stock conversion discounts
    
    
    878,708
    
    
    
    0Total liabilities
    
    
    2,655,773
    
    
    
    2,492,982SHAREHOLDERS EQUITY (DEFICIENCY)Common stock, $.01 par value, 250,000,000 shares and 125,000,000
shares authorized as of September 30, 2009 and December 31,
2008, respectively; 114,801,291 shares and 104,561,291 shares
issued as of September 30, 2009 and December 31, 2008
respectively; 110,442,132 shares and 100,202,132 shares
outstanding as of September 30, 2009 and December 31, 2008,
respectively
    
    
    1,148,013
    
    
    
    1,045,613Additional paid in capital
    
    
    12,969,784
    
    
    
    12,235,833Stock warrants
    
    
    3,314,868
    
    
    
    2,608,240Accumulated deficit
    
    
    (17,399,867
    )
    
    
    (15,285,207
    )Treasury stock, 4,359,159 shares as of September 30, 2009 and
December 31, 2008, at cost
    
    
    (552,235
    )
    
    
    (552,235
    )Total shareholders equity (deficiency)
    
    
    (519,437
    )
    
    
    52,244Total liabilities and shareholders equity (deficiency)
    
    $
    2,136,336
    
    
    $
    2,545,226
 The accompanying notes are an integral part of the consolidated financial statements
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GENELINK, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 For The
    
    
    For The
    
    
    For The
    
    
    For TheThree Months
    
    
    Three Months
    
    
    Nine Months
    
    
    Nine MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008REVENUE
    
    $
    2,134,504
    
    
    $
    1,829,669
    
    
    $
    6,219,719
    
    
    $
    1,982,629COST OF GOODS SOLD
    
    
    869,328
    
    
    
    425,706
    
    
    
    2,731,635
    
    
    
    565,483GROSS PROFIT
    
    
    1,265,176
    
    
    
    1,403,963
    
    
    
    3,488,084
    
    
    
    1,417,146EXPENSESSelling, general and administrative
    
    
    1,950,054
    
    
    
    1,889,655
    
    
    
    5,397,609
    
    
    
    3,134,490Research and development
    
    
    26,705
    
    
    
    0
    
    
    
    26,705
    
    
    
    12,9511,976,759
    
    
    
    1,889,655
    
    
    
    5,424,314
    
    
    
    3,147,441OPERATING LOSS
    
    
    (711,583
    )
    
    
    (485,692
    )
    
    
    (1,936,230
    )
    
    
    (1,730,295
    )OTHER INCOME (EXPENSES)Debt conversion costs
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    (229,025
    )Amortization and depreciation
    
    
    (33,411
    )
    
    
    (26,449
    )
    
    
    (89,359
    )
    
    
    (63,510
    )Interest income (expense)
    
    
    (38,800
    )
    
    
    (1,331
    )
    
    
    (89,071
    )
    
    
    (52,491
    )(72,211
    )
    
    
    (27,780
    )
    
    
    (178,430
    )
    
    
    (345,026
    )NET LOSS BEFORE PROVISION FOR INCOME TAXES
    
    
    (783,794
    )
    
    
    (513,472
    )
    
    
    (2,114,660
    )
    
    
    (2,075,321
    )PROVISION FOR INCOME TAXES
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0NET LOSS
    
    $
    (783,794
    )
    
    $
    (513,472
    )
    
    $
    (2,114,660
    )
    
    $
    (2,075,321
    )NET LOSS PER SHARE, BASIC & DILUTED
    
    $
    (0.006
    )
    
    $
    (0.005
    )
    
    $
    (0.02
    )
    
    $
    (0.03
    )Weighted average common shares and
diluted potential common shares
    
    
    113,575,791
    
    
    
    96,026,291
    
    
    
    108,786,513
    
    
    
    74,972,909
 The accompanying notes are an integral part of the consolidated financial statements
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GENELINK, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Nine months ended September 30
    
    2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIESNet loss
    
    $
    (2,114,660
    )
    
    $
    (2,075,321
    )Adjustments to reconcile net loss
to net cash used by operating activitiesDepreciation and amortization
    
    
    89,359
    
    
    
    63,510Amortization of discounts on loans payable
    
    
    34,048
    
    
    
    240,844Common stock issued for services
    
    
    15,000
    
    
    
    0Fair value of options granted for services
    
    
    277,117
    
    
    
    84,200Changes in operating assets and liabilitiesAccounts receivable
    
    
    290,828
    
    
    
    (498,791
    )Inventory
    
    
    223,240
    
    
    
    (541,639
    )Prepaid expenses
    
    
    (107,401
    )
    
    
    (1,396,851
    )Deposits
    
    
    0
    
    
    
    (43,765
    )Other assets
    
    
    16,408
    
    
    
    0Accounts payable and accrued expenses
    
    
    (876,922
    )
    
    
    1,156,228Accrued compensation
    
    
    (14,284
    )
    
    
    (54,168
    )Deferred revenue
    
    
    235,558
    
    
    
    2,514,988Net cash used in operating activities
    
    
    (1,931,709
    )
    
    
    (550,765
    )CASH FLOWS FROM INVESTING ACTIVITIESCapital expenditures
    
    
    (112,284
    )
    
    
    (216,188
    )Patent acquisition costs
    
    
    (550
    )
    
    
    (30,783
    )Net cash used in investing activities
    
    
    (112,834
    )
    
    
    (246,971
    )CASH FLOWS FROM FINANCING ACTIVITIESProceeds from loans and notes payable
    
    
    1,250,000
    
    
    
    0Proceeds from issuance of common stock and warrants, net
    
    
    1,014,000
    
    
    
    0Principal payments on capital lease obligation
    
    
    (36,177
    )
    
    
    (9,843
    )Principal payments on note payable
    
    
    (24,092
    )
    
    
    0Commissions paid for fundraising costs
    
    
    (168,480
    )
    
    
    0Purchase of treasury stock
    
    
    0
    
    
    
    (237,180
    )Proceeds from exercise of stock warrants
    
    
    0
    
    
    
    706,990Net cash provided by financing activities
    
    
    2,035,251
    
    
    
    459,967
 The accompanying notes are an integral part of the consolidated financial statements
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GENELINK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Nine months ended September 30
    
    2009
    
    
    2008NET DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (9,292
    )
    
    $
    (337,769
    )Cash and cash equivalents, beginning of period
    
    
    435,197
    
    
    
    972,371Cash and cash equivalents, end of period
    
    $
    425,905
    
    
    $
    634,602SUPPLEMENTAL CASH FLOW INFORMATIONCash paid for interest
    
    $
    5,926
    
    
    $
    0Non-cash investing and financing transactions:Equipment acquired under capital lease
    
    $
    0
    
    
    $
    61,400Stock warrants granted for services
    
    $
    51,500
    
    
    $
    84,200Stock warrants granted for fundraising
    
    $
    223,653
    
    
    $
    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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GENELINK, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1  DESCRIPTION OF ORGANIZATION
 Organization
   ®
   7




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®
  TM TM TM TM
   8




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2  BASIS OF PRESENTATION
   3  STOCKHOLDERS EQUITY TRANSACTIONS AND CONVERTIBLE SECURED PROMISSORY NOTES
       9




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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 (made exclusively) Me (made exclusively) Me (made
exclusively)
   LIQUIDITY AND CAPITAL RESOURCES
     12




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COMPARISON OF THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2009 TO THE THREE MONTHS AND
NINE MONTHS ENDED SEPTEMBER 30, 2008
 Financial Condition
   Results of Operations
 Revenues
  13




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Gross Profit
 Expenses
 Operating Losses
 Net Losses
 FACTORS AFFECTING THE COMPANYS BUSINESS AND PROSPECTS
    14




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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
  PART II. OTHER INFORMATION
 Item 1.
    
    LEGAL PROCEEDINGS
    15




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Item 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Item 3.
    
    DEFAULTS UPON SENIOR SECURITIES
   16




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Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
  Item 5.
    
    OTHER INFORMATION
  Item 6.
    
    EXHIBITS
 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 12, 2009
    By:
    /s/ Monte E. Taylor, Jr.Monte E. Taylor, Jr., Chief Executive Officer and Chief Financial Officer  17