UNITED
STATES


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 EXCHANGEACT OF
      1934 For the
quarterly period ended:  September 30,
2009
 or
   ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934  For the
transition period from: _____________ to _____________




Commission
file number: 0-52993




______________________




GELTECH
SOLUTIONS, INC.


(Exact
name of registrant as specified in its charter)


______________________





Delaware
            
            56-2600575(State
      or other jurisdiction of
            
            (I.R.S.
      Employerincorporation
      or organization)
            
            Identification
      No.)1460
      Park Lane South, Suite 1, Jupiter, Florida
            
            33458(Address
      of principal executive offices)
            
            (Zip
      Code)




(561)
427-6144


(Registrant’s telephone number,
including area code)


———————


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 þ  No  ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the
preceding 12 months (or for such shorter period that the registrant was required
to submit and post such files).  Yes  ̈   No  ̈




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.




Large
      accelerated filer
            o
            Accelerated
      filer
            oNon-accelerated
      filer
            o
            Smaller
      reporting company
            þ(Do
      not check if smaller reporting
company)




Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).   Yes  ̈   No þ




Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date.




The
number of outstanding shares of the issuer’s common stock as of February 11,
2010, was 15,557,681.










EXPLANATORY
NOTE





In
preparing the financial statements for the quarter ended December 31,
2009  we concluded that our financial statements for the three months
ended September 30, 2009 (which were included in our Quarterly Report on Form
10-Q filed with the Securities and Exchange Commission  on November
15, 2009),  should no longer be relied upon because we inadvertently
omitted an accrual for sales commission resulting in an understatement of
expense and accrued liabilities. This Quarterly Report on Form 10-Q/A
(Amendment No. 1) is being filed to provide corrected financial statements for
the  three months ended September 30, 2009 and to provide revised
disclosure as appropriate to reflect such revisions to these financial
statements.  Except with respect to the changes resulting from this
error, this Amendment does not modify or update any other disclosure in the
original filing.













i




PART
I – FINANCIAL INFORMATION




ITEM
      1.
            CONSOLIDATED
      FINANCIAL STATEMENTS.




GELTECH
SOLUTIONS, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED BALANCE SHEETS






As
      ofSeptember 30,
              2009
            
            
            June
      30,
              2009ASSETS
            
            (Unaudited)
              As
      Restated
              See
      Note 10Cash
      and cash equivalents
            
            $
            129,576
            
            
            $
            245,381Accounts
      receivable trade, net
            
            
            249,543
            
            
            
            16,167Inventories
            
            
            210,830
            
            
            
            249,409Prepaid
      expenses and other current assets
            
            
            29,229
            
            
            
            11,103Total
      current assets
            
            
            619,178
            
            
            
            522,060Furniture,
      fixtures and equipment, net
            
            
            22,471
            
            
            
            23,207Debt
      issue costs, net
            
            
            230,000
            
            
            
            316,250Deposits
            
            
            45,631
            
            
            
            30,630$
            917,280
            
            
            $
            892,147LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIT)Accounts
      payable
            
            $
            75,887
            
            
            $
            51,778Accrued
      expenses
            
            
            96,568
            
            
            
            27,753Customer
      deposit
            
            
            25,000
            
            
            
            25,000Line
      of credit
            
            
            2,175,000
            
            
            
            1,550,000Due
      to related party
            
            
            ––
            
            
            
            60,000Insurance
      premium finance contract
            
            
            7,356
            
            
            
            7,060Total
      current liabilities
            
            
            2,379,811
            
            
            
            1,721,591Total
      liabilities
            
            
            2,379,811
            
            
            
            1,721,591Commitments
      and contingencies (Note 6)Stockholder's
      equity (deficit)Preferred
      stock: $0.001 par value; 5,000,000 shares authorized;no
      shares issued and outstanding
            
            
            ––
            
            
            
            ––Common
      stock: $0.001 par value; 50,000,000 shares authorized;13,858,986
      shares issued and outstanding
            
            
            13,859
            
            
            
            13,859Additional
      paid in capital
            
            
            5,287,233
            
            
            
            5,262,999Accumulated
      deficit
            
            
            (6,763,623
            )
            
            
            (6,106,302
            )Total
      stockholders' equity (deficit)
            
            
            (1,462,531
            )
            
            
            (829,444
            )Total
      liabilities and stockholders' equity (deficit)
            
            $
            917,280
            
            
            $
            892,147





The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  1




GELTECH
SOLUTIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)







For
      the Three Months Ended
              September
      30,2009
            
            
            2008As Restated

              See
      Note 10Sales
            
            $
            287,554
            
            
            $
            70,341Cost
      of goods sold
            
            
            91,206
            
            
            
            19,939Gross
      profit
            
            
            196,348
            
            
            
            50,402Operating
      expenses:Selling,
      general and administrative expenses
            
            
            738,679
            
            
            
            722,503Research
      and development
            
            
            3,766
            
            
            
            16,817Total
      operating expenses
            
            
            742,445
            
            
            
            739,320Loss
      from operations
            
            
            (546,097
            )
            
            
            (688,918
            )Other
      income (expense)Gain
      (loss) on conversion
            
            
            ––
            
            
            
            12,767Interest
      income
            
            
            12
            
            
            
            ––Interest
      expense
            
            
            (111,236
            )
            
            
            (338
            )Total
      other income (expense)
            
            
            (111,224
            )
            
            
            12,429Net
      loss
            
            $
            (657,321
            )
            
            $
            (676,489
            )Net
      loss per common share - basic and diluted
            
            $
            (0.05
            )
            
            $
            (0.05
            )Weighted
      average shares outstanding - basic and diluted
            
            
            13,858,986
            
            
            
            13,462,821





The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
  2





GELTECH
SOLUTIONS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(UNAUDITED)







For
      the Three Months Ended September 30,2009
            
            
            2008As Restated

              See
      Note 10Cash
      flows from operating activitiesReconciliation
      of net loss to net cash used in operating activities:Net
      loss
            
            $
            (657,321
            )
            
            $
            (676,489
            )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
            
            
            1,674
            
            
            
            7,440Amortization
      of debt issuance costs
            
            
            86,250
            
            
            
            ––Stock
      option compensation expense
            
            
            24,234
            
            
            
            57,046Changes
      in assets and liabilities:Accounts
      receivable
            
            
            (233,376
            )
            
            
            (9,196
            )Inventories
            
            
            38,579
            
            
            
            (69,182
            )Prepaid
      expenses and other current assets
            
            
            7,323
            
            
            
            11,115Deposits
      and other assets
            
            
            (15,001
            )
            
            
            1,928Accounts
      payable
            
            
            24,109
            
            
            
            33,969Related
      party payable
            
            
            (60,000
            )
            
            
            ––Accrued
      expenses
            
            
            68,815
            
            
            
            4,638Net
      cash used in operating activities
            
            
            (714,714
            )
            
            
            (638,731
            )Cash
      flows from Investing ActivitiesSales
      of short term marketable debt securities
            
            
            ––
            
            
            
            650,000Purchases
      of equipment
            
            
            (938
            )
            
            
            (3,392
            )Net
      cash provided by (used in) investing activities
            
            
            (938
            )
            
            
            646,608Cash
      flows from Financing ActivitiesPayments
      on Insurance Finance Contract
            
            
            (25,153
            )
            
            
            (6,953
            )Proceeds
      from revolving line of credit, net
            
            
            625,000
            
            
            
            ––Net
      cash provided by financing activities
            
            
            599,847
            
            
            
            (6,953
            )Net
      increase in cash and cash equivalents
            
            
            (115,805
            )
            
            
            924Cash
      and cash equivalents - beginning
            
            
            245,381
            
            
            
            230,058Cash
      and cash equivalents - ending
            
            $
            129,576
            
            
            $
            230,982Supplemental
      Disclosure of Cash Flow Information:Cash
      paid for interest
            
            $
            24,798
            
            
            $
            383Cash
      paid for income taxes
            
            $
            ––
            
            
            $
            ––Supplementary
      Disclosure of Non-cash Investing and Financing Activities:Financing
      of prepaid insurance contracts
            
            $
            25,449
            
            
            $
            18,153




The
accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.


3




GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)




1.
            Organization
      and Basis of Presentation




Organization





GelTech
Solutions, Inc. (“GelTech” or the “Company”) is a Delaware corporation. GelTech
is primarily engaged in business activities that include finalizing the
development of products in three distinct markets and beginning the marketing
and delivery of products in two of those markets: (i) FireIce®, a patented fire
suppression product, which is non-toxic and when combined with water becomes a
water-based gel product used to suppress fires involving structures, personal
property and forest wildfires; (ii) RootGel, a moisture preservation solution
that has many applications useful in the agricultural industry including water
and nutrient retention in golf course maintenance, landscaping and forestry and
(iii) IceWearTM, a line of garments that help cool the core body temperature for
individuals who work in extreme conditions (e.g., firefighters, police officers,
construction workers, race car drivers). Additionally, GelTech owns a United
States patent for a method to modify weather.





Beginning
July 2008, the Company was no longer in the development stage as defined by
Statement of Financial Accounting Standard (“SFAS”) No. 7 "Accounting and
Reporting for Development Stage Enterprises." The Company will no longer
continue to report as a development stage company, since significant revenues
have been generated and the company operations have moved beyond the activities
of identifying and developing products to the activities of marketing, selling
and distributing products. The corporate office is located in Jupiter,
Florida.




Basis
of Presentation





The
accompanying unaudited condensed consolidated interim financial statements
include the accounts of the Company and its two wholly owned subsidiaries:
Weather Tech Innovations, Inc. and FireIce Gel, Inc. (formerly GelTech
Innovations, Inc.). Prior to July 1, 2008, there had been no activity in
either subsidiary. Beginning on July 1, 2008, the Company began operating
the marketing, sales and distribution of FireIce® through FireIce Gel, Inc.
These unaudited, condensed consolidated interim financial statements have been
prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) in accordance with the rules and regulations
of the U.S. Securities and Exchange Commission for interim financial
information. Accordingly, they do not include all of the information and
footnotes required by "GAAP" for complete financial statements. In the opinion
of management, all adjustments (consisting of normal recurring adjustments)
considered necessary for a fair presentation have been included. The information
included in these unaudited condensed consolidated financial statements should
be read in conjunction with Management’s Discussion and Analysis of Financial
Conditions and Results of Operations contained in this report and the audited
consolidated financial statements and accompanying notes included in the
Company’s Annual Report on Form 10-K for the year ended June 30, 2009
filed on September 28, 2009.




Inventories





Inventories
as of September 30, 2009 consisted of raw materials and finished goods in
the amounts of $121,123 and $89,707, respectively.




Revenues





The
Company recognizes sales of its products when they are shipped FOB shipping
point in accordance with Staff Accounting Bulletin 104 and reduces revenues for
any credits issued to customers. During the three months ended
September 30, 2009, the Company issued credits to customers in the amount
of $851 for products returned by a distributor. As a result, sales for the three
months ended September 30, 2009 were reduced by the amount of the
returns.




Accounting
Standard Codification





In
June 2009, FASB approved the FASB Accounting Standards Codification (“the
Codification”) as the single source of authoritative nongovernmental GAAP. All
existing accounting standard documents, such as FASB, American Institute of
Certified Public Accountants, Emerging Issues Task Force and other related
literature, excluding guidance from the Securities and Exchange Commission
(“SEC”), have been superseded by the Codification. All other non-grandfathered,
non-SEC accounting literature not included in the Codification has become
nonauthoritative. The Codification did not change GAAP, but instead introduced a
new structure that combines all authoritative standards into a comprehensive,
topically organized online database. The Codification is effective for interim
or annual periods ending after September 15, 2009, and impacts the
Company’s financial statements as all future references to authoritative
accounting literature will be referenced in accordance with the Codification.
Other than changes to authoritative references, there have been no changes to
the content of the Company’s financial statements or disclosures as a result of
implementing the Codification during the quarter ended September 30,
2009.





4





GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)





As a
result of the Company’s implementation of the Codification during the quarter
ended September 30, 2009, previous references to new accounting standards
and literature are no longer applicable. In the current quarter financial
statements, the Company will provide reference to the both the old and new
guidance to assist in understanding the impacts of recently adopted accounting
literature, particularly for guidance adopted since the beginning of the current
fiscal year but prior to the Codification.  New references will use
the term Accounting Standards Codification (ASC) followed by the relevant ASC
section.




Use
of Estimates





The
preparation of financial statements in conformity with GAAP requires management
to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Management believes that the
estimates utilized in preparing its financial statements are reasonable;
however, actual results could differ materially from these estimates.
Significant estimates in the fiscal 2010 period include the allowance for
doubtful accounts, valuation of inventories, valuation of options and warrants
granted for services, valuation of common stock granted for services and the
deferred tax assets.




Earnings
(Loss) per Share





The
Company computes earnings (loss) per share in accordance with SFAS No. 128
(ASC 260-10), “Earnings per
Share.” ASC 260-10 requires presentation of both basic and diluted
earnings per share (“EPS”) on the face of the income statement. Basic EPS is
computed by dividing net income (loss) available to common shareholders by the
weighted average number of common shares outstanding during the period. Diluted
EPS gives effect to all dilutive potential common shares outstanding during the
period. Diluted EPS excludes all dilutive potential common shares if their
effect is anti-dilutive. At September 30, 2009, there were options to
purchase 2,689,000 shares of the Company’s common stock and warrants to purchase
1,002,361 shares of the Company’s commons stock which may dilute future earnings
per share.




Stock-Based
Compensation





On
July 19, 2006 (inception), the Company adopted SFAS No. 123 (revised
2004, “123R”) (ASC 718-10), “Share-Based Payment,” which
requires the measurement and recognition of compensation expense for all
share-based payment awards made to employees and directors including employee
stock options, restricted stock units, and employee stock purchases based on
estimated fair values.





Stock-based
compensation expense recognized under ASC 718-10 for the period July 1,
2009 to September 30, 2009 was $24,234 which consisted of compensation
related to employee, director and advisor stock options, and is included in
selling, general and administrative expenses on the consolidated statements of
operations. Stock-based compensation expense recognized during the period is
based on the value of the portion of share-based payment awards that is
ultimately expected to vest during the period. At September 30, 2009, the
total compensation cost for stock options not yet recognized was approximately
$710,407. This cost will be amortized on a straight-line basis over the
remaining vesting term of the options.





On
July 1, 2009, the Company granted options to purchase 100,000 shares of the
Company’s common stock to directors of the Company. The options have an exercise
price of $1.84 per share, vest over one year and have a ten year term. The
options were valued using the Black-Scholes model using a volatility of 166.28%
(derived using the historical market price for the Company’s common stock since
it began trading in June 2008), an expected term of 6.5 years (using the
simplified method) and a discount rate of 3.03%. The value of the options will
be recognized over the vesting term, one year.




5




GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)





A summary
of stock option transactions for all stock options for the three months ended
September 30, 2009 and 2008 is as follows:




Employee
      OptionsNumber
      of
              Options
            
            Weighted
              Average
              Exercise
              Price
            
            Weighted
              Average
              Remaining
              Contractual
              Life
            
            Aggregate
              Intrinsic
              ValueBalance
      at June 30, 2008
            
            
            1,175,000
            
            
            $
            0.82
            
            
            
            7.53Granted
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Exercised
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2008
            
            
            1,175,000
            
            
            $
            0.82
            
            
            
            7.28
            
            
            $
            94,000Exercisable
      at September 30, 2008
            
            
            379,169
            
            
            $
            0.90
            
            
            
            5.21
            
            
            $
            ––Weighted
      average fair value of options granted during the three months ended
      September 30, 2008
            
            
            N/ABalance
      at June 30, 2009
            
            
            2,714,000
            
            
            $
            0.92
            
            
            
            8.20Granted
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Exercised
            
            
            ––
            
            
            $
            ––Forfeited
            
            
            (500,000
            )
            
            $
            1.00
            
            
            
            9.75Expired
            
            
            ––
            
            
            $
            ––Outstanding
      at September 30, 2009
            
            
            2,214,000
            
            
            $
            0.90
            
            
            
            7.66
            
            
            $
            2,655,952Exercisable
      at September 30, 2009
            
            
            877,834
            
            
            $
            0.87
            
            
            
            5.66
            
            
            $
            1,078,668Weighted
      average fair value of options granted during the three months ended
      September 30, 2009
            
            
            N/A




6




GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)




A summary
of options issued to non-employees under the 2007 Plan and changes during the
three month periods from June 30, 2008 to September 30, 2008 and from June 30,
2009 to September 30, 2009 is as follows:




Options
      Issued to DirectorsNumber
      of
              Options
            
            Weighted
              Average
              Exercise
              Price
            
            Weighted
              Average
              Remaining
              Contractual
              Life
            
            Aggregate
              Intrinsic
              ValueBalance
      at June 30, 2008
            
            
            110,000
            
            
            $
            0.85
            
            
            
            5.89Granted
            
            
            95,000
            
            
            $
            0.88
            
            
            
            10.00Exercised
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2008
            
            
            205,000
            
            
            $
            0.86
            
            
            
            7.82
            
            
            $
            8,200Exercisable
      at September 30, 2008
            
            
            39,999
            
            
            $
            0.92
            
            
            
            4.45
            
            
            $
            103,197Weighted
      average fair value of options granted during the three months ended
      September 30, 2008
            
            $
            1.78Balance
      at June 30, 2009
            
            
            205,000
            
            
            $
            0.86
            
            
            
            5.89Granted
            
            
            100,000
            
            
            $
            1.84
            
            
            
            10.00Exercised
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2009
            
            
            305,000
            
            
            $
            1.18
            
            
            
            7.67
            
            
            $
            279,550Exercisable
      at September 30, 2009
            
            
            205,000
            
            
            $
            0.86
            
            
            
            6.67
            
            
            $
            253,550Weighted
      average fair value of options granted during the three months ended
      September 30, 2009
            
            
            N/A





7




GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)




Non-Employee,
      Non-Director OptionsNumber
      of
              Options
            
            Weighted
              Average
              Exercise
              Price
            
            Weighted
              Average
              Remaining
              Contractual
              Life
            
            Aggregate
              Intrinsic
              ValueBalance
      at June 30, 2008
            
            
            170,000
            
            
            $
            1.00
            
            
            
            4.53Granted
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Exercised
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2008
            
            
            170,000
            
            
            $
            1.00
            
            
            
            4.27
            
            
            $
            ––Exercisable
      at September 30, 2008
            
            
            70,623
            
            
            $
            1.00
            
            
            
            4.27
            
            
            $
            ––Weighted
      average fair value of options granted during the three months ended
      September 30, 2008
            
            
            N/ABalance
      at June 30, 2009
            
            
            170,000
            
            
            $
            1.00
            
            
            
            3.53Granted
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Exercised
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2009
            
            
            170,000
            
            
            $
            1.00
            
            
            
            3.27
            
            
            $
            187,000Exercisable
      at September 30, 2009
            
            
            136,707
            
            
            $
            0.99
            
            
            
            3.27
            
            
            $
            150,378Weighted
      average fair value of options granted during the three months ended
      September 30, 2009
            
            
            N/A




Determining Fair
Value Under ASC 718-10





The
Company estimates the fair value of stock options granted using the
Black-Scholes option-pricing formula and a single option award approach. This
fair value is then amortized on a straight-line basis over the requisite service
periods of the awards, which is generally the vesting period. The Company’s
determination of fair value using an option-pricing model is affected by the
stock price as well as assumptions regarding the number of highly subjective
variables.





The fair
value of stock option grants for the period from July 1, 2009 to
September 30, 2009 was estimated using the following weighted-average
assumptions:




Risk
      free interest rate
            
            
            3.03
            %Expected
      term (in years)
            
            
            6.5Dividend
      yield
            
            
            ––Volatility
      of common stock
            
            
            166.28
            %Estimated
      annual forfeitures
            
            
            ––Weighted-average
      fair value
            
            $
            1.78




8





GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)




2.
Going Concern




These
consolidated financial statements have been prepared on a going concern basis,
which implies the Company will continue to realize it assets and discharge its
liabilities in the normal course of business. As of September 30, 2009, the
Company has a working capital deficit of $1,760,633 and has an accumulated
deficit of $6,763,623 and incurred losses from operations of $657,321 for the
three months ended September 30, 2009 and used cash from operations of
$714,714 during the three months ended September 30, 2009. These factors
raise substantial doubt regarding the Company’s ability to continue as a going
concern. In May 2008, we entered into a $2,500,000 revolving line of credit
agreement with our largest shareholder. As of September 30, 2009, we have
drawn $2,175,000 against this line of credit. This shareholder/lender has
assured us that he will provide any additional support we may require. The
Company is in the process of seeking additional debt or equity financing in
order to meet its future obligations. There is no guarantee that such financing
will be available to the Company, particularly in light of current economic
conditions. If the Company is unable to generate substantial cash flows from
additional sales of our products, or through financings including but not
limited to the lines of credit, the Company may not be able to remain
operational.




The
continuation of the Company as a going concern is dependent upon the continued
financial support from its shareholders, the ability of the Company to obtain
necessary debt or equity financing to continue operations, and the attainment of
profitable operations. These financial statements do not include any adjustments
to the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should the Company be
unable to continue as a going concern.




3.
Line of Credit Agreements





On
May 29, 2009, GelTech Solutions, Inc. (the “Company”) entered into a Credit
Enhancement and Financing Security Agreement (the “Agreement”) with the
Company’s largest shareholder. In connection with this agreement the Company
executed a Revolving Promissory Note which permits the Company to borrow up to
$2,500,000. Interest, at an annual rate of 5%, is due monthly on the 29th day
of each month commencing June 29, 2009 and the principal and all accrued
interest is due on May 29, 2010. Additionally, the Company may be compelled
to pay the outstanding principal balance earlier during which it will not be
permitted to borrow any sums for a period of 30 consecutive days.  As
of September 30, 2009, the Company has received advances against the note
of $2,175,000. Interest expense on the note for the three months ended
September 30, 2009 was $24,798.




9





GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)





4.
Stockholders’ Equity





There
were no issuances of common stock during the three months ended
September 30, 2009.




Common Stock
Warrants





A summary
of outstanding warrants as of September 30, 2009 and 2008 and changes
during the three month periods ended September 30, 2009 and 2008 is as
follows:




Warrants
      Issued as SettlementsNumber
      of
              Options
            
            Weighted
              Average
              Exercise
              Price
            
            Remaining
              Contractual
              LifeBalance
      at June 30, 2008
            
            
            504,058
            
            
            $
            1.05
            
            
            
            1.92Granted
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Exercised
            
            
            (30,000
            )
            
            $
            1.00
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2008
            
            
            474,058
            
            
            $
            1.05
            
            
            
            1.66Exercisable
      at September 30, 2008
            
            
            474,058
            
            
            $
            1.05
            
            
            
            1.66Weighted
      average fair value of options granted during the three months ended
      September 30, 2008
            
            
            N/ABalance
      at June 30, 2009
            
            
            474,058
            
            
            $
            1.05
            
            
            
            0.91Granted
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Exercised
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2009
            
            
            474,058
            
            
            $
            1.05
            
            
            
            0.76Exercisable
      at September 30, 2009
            
            
            474,058
            
            
            $
            1.05
            
            
            
            0.76Weighted
      average fair value of options granted during the three months ended
      September 30, 2009
            
            
            N/A





10




GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)




A summary
of warrants issued for cash and changes during the periods June 30, 2007 to
September 30, 2008 and from June 30, 2008 to September 30, 2009 is as
follows:




Warrants
      issued for cashNumber
      of
              Options
            
            Weighted
              Average
              Exercise
              Price
            
            Remaining
              Contractual
              LifeBalance
      at June 30, 2008
            
            
            528,303
            
            
            $
            1.14
            
            
            
            2.29Granted
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Exercised
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2008
            
            
            528,303
            
            
            $
            1.14
            
            
            
            2.04Exercisable
      at September 30, 2008
            
            
            528,303
            
            
            $
            1.14
            
            
            
            2.04Weighted
      average fair value of options granted during the three months ended
      September 30, 2008
            
            
            N/ABalance
      at June 30, 2009
            
            
            528,303
            
            
            $
            1.14
            
            
            
            1.29Granted
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Exercised
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Forfeited
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Expired
            
            
            ––
            
            
            $
            ––
            
            
            
            ––Outstanding
      at September 30, 2009
            
            
            528,303
            
            
            $
            1.14
            
            
            
            1.04Exercisable
      at September 30, 2009
            
            
            528,303
            
            
            $
            1.14
            
            
            
            1.04Weighted
      average fair value of options granted during the three months ended
      September 30, 2009
            
            
            N/A




5.
Fair Value Measurements





In
July 2009, the Company implemented FASB Accounting Standards Codification
850 “Fair Value Measurements and Disclosures” (formerly SFAS 157, “Fair Value
Measurements”), relative to its financial assets and liabilities that are
recognized or disclosed at fair value in the financial statements at least
annually.





Our cash
and cash equivalents are recorded at fair value as determined through market,
observable and corroborated sources





As of
September 30, 2009 the Company’s cash and cash equivalents that are carried
at fair value on a recurring basis include the following:




Fair
      Value Measurements UsingTotal
            
            
            Quoted
      Prices
              in
      Active
              Markets
              (Level
      1)
            
            
            Significant
      Other Observable
              Inputs
              (Level
      2)
            
            
            Significant
              Unobservable
              Inputs
              (Level
      3)Cash
            
            $
            129,576
            
            
            $
            129,576
            
            
            $
            ––
            
            
            $
            ––




11





GelTech
Solutions, Inc. and Subsidiaries
 Notes
to Condensed Consolidated Financial Statements
 For
the Three Months Ended September 30, 2009
 (Unaudited)





6.
Commitments and Contingencies





On
September 12, 2006, the Company entered into a lease for office and
warehouse space located in Jupiter, Florida. The lease term began on
October 1, 2006 and terminated on September 30, 2008.





On
September 15, 2006, the Company entered into employment agreements with two
of its officers and on December 18, 2006 the Company entered into an
employment agreement with a third officer. Each agreement is for a term of three
years and requires the payment of $91,000 in annual compensation to each
officer. In addition, two of the employment contracts include the issuance of
incentive stock options to purchase 175,000 shares of the Company’s common stock
to each of the officers. Effective March 17, 2008, the Board authorized an
amendment to the employment agreements with the officers. The officers agreed to
eliminate their automobile allowances of $875 per month. In exchange, their
annual compensation has been increased from $91,000 to $125,000, and each
officer was granted 200,000 stock options exercisable at $0.667 per share over a
10-year period, subject to semi-annual vesting if still employed by the Company
on each applicable vesting date. The Board also granted an additional 175,000
stock options to the officer that did not receive an initial grant, exercisable
at $1.00 per share over a 10-year period, subject to the same vesting described
in the prior sentence. The Board also agreed to amend a provision of the
officers’ employment agreements which permits them to resign for “Good Reason”
and receive severance equal to three years base salary and have all unvested
options vest. Under this provision, each officer has 180 days to resign in the
event a shareholder acquires beneficial ownership of at least 30% of the
Company’s common stock. On January 30, 2008, an investor passed this 30%
threshold as described on a Form 8-K filed by the Company on the same day.
The amendment gave each officer until December 31, 2008 to make this
election. None made such an election. See Note 1 for additional information on
the options granted the officers.





In
December 2008, the Compensation Committee approved new employment terms for
each of the Company’s three executive officers. Each received an annual salary
of $125,000 for the balance of fiscal 2009 with increases to $150,000 and
$175,000 for fiscal 2010 and 2011, subject to the discretion of the Compensation
Committee. Target bonuses, subject to the discretion of the Compensation
Committee, are $112,500 and $131,250 for fiscal 2010 and 2011, respectively
based upon meeting job performance, revenue growth, positive cash flow and
pre-tax income. No bonus was awarded for fiscal 2009. Additionally, each
executive received a grant of 500,000 10-year options exercisable over 10 years.
The options vest annually subject to continued employment with the Company and
subject to meeting budgeted revenue targets. If the Company fails to meet any
revenue targets, the Compensation Committee has discretion to vest or cancel the
options. Based upon the failure to meet fiscal 2009 revenue targets, a total of
500,000 options were forfeited.





The
Company was sued by a former employee on June 23, 2008, alleging breach of
a consulting agreement and an employment agreement entered into in May and
June 2007, respectively. In addition, the plaintiff seeks to recover
certain of his personal property, which was used or stored in the Company’s
offices, and alleges the Company invaded his privacy by looking at his personal
computer in the Company’s offices. The defendants have filed motions to dismiss
and contend that the lawsuit is baseless.





In
October 2008, the Company entered into a Master Distributing Agreement with
a California company (the Distributor). Under the agreement, the Company agreed
to pay the Distributor up to $450,000 in costs toward the marketing of the
Company’s FireIce® Gel product. As of June 30, 2009, the Company had paid
$50,000 to the Distributor. In addition, the Company issued a credit in lieu of
payment, in the amount of $50,000, against the accounts receivable of the
Distributor. As such, the remaining amounts due under the agreement called for
the payment of an additional $210,000 in calendar 2009 and $140,000 in calendar
2010. In September 2009, the Company and the Distributor entered into a
settlement agreement whereby each party was relieved of any further obligations
related to the Master Distributing Agreement..




12


7.
Related Party Transactions





In
addition to the Chief Executive Officer (CEO) and the Chief Technology Officer
(CTO) the following related parties are employed at GelTech:




●
            the
      CEO’s wife as a bookkeeper at $1,000 per
week,




●
            The
      CEO and CTO’s father is a researcher at $1,000 per week,
    and




●
            The
      CEO and CTO’s mother as a receptionist at $600 per
  week.





We
believe all of these salaries are at or are below the going rate of what such
services would cost on the open market.





In
February 2008, the Board of Directors approved a Referral Agreement with
one of its non-employee directors, whereby the director would receive a referral
fee of 2% for business referred to the Company by the director.





The
Company approved employment terms with its executive officers which are
described under Note 6.





The
Company has a Line of Credit with its largest shareholder as described in Note
3.




8.
Concentrations





The
Company maintains its cash in bank and financial institution deposits that at
times may exceed federally insured limits. The Company has not experienced any
losses in such accounts through September 30, 2009.  As of
September 30, 2009, there were no cash equivalent balances held in
corporate money market funds that are not insured.





At
September 30, 2009, approximately 84% of accounts receivable was from one
customer with another 10% due from another customer.





For the
three months ended September 30, 2009, three customers accounted for
approximately 72.5%, 12.5% and 11.8% of sales.





During
the three months ended September 30, 2009 all sales resulted from two
products, FireIce® and RootGel which made up 79% and 21%, respectively, of total
sales.





During
the three months ended September 30, 2009, the Company purchased
approximately $42,000 of raw material from one vendor which amounted to 79% of
the purchases for the period.




9.
Subsequent Events







In
October 2009, the Chairman of the Audit Committee of the Board of Directors
resigned. Upon his resignation, all previously unvested options granted to the
Director were immediately vested. The total number vested amounted to 55,000
options with exercise prices between $0.67 and $1.84 per share. The Company will
recognize the associated expense related to the vesting of these options in the
three month period ending December 31, 2009.





Since
September 30, 2009, the Company has received additional draws of $200,000
from the Line of Credit.





In
November 2009, the Company entered into a consulting agreement with an
investment banker which is effective October 15, 2009. Under the agreement
the investment banker will provide assistance to the Company in evaluating and
executing financial and strategic initiatives of the Company. In connection with
the agreement, the Company issued the investment banker 200,000 shares of the
Company’s common stock which are restricted, one half until October 15,
2010 and the remainder until October 15, 2011. The fair value of the
shares, $340,000, based upon the market price of the Company’s stock on the date
of the agreement, will be recognized over the two year period of the
agreement.





In
November 2009, the Company issued 20,000 shares of common stock in private
transactions with accredited investors in exchange for $30,000 in cash or $1.50
per share.





Management
evaluated all activity of the Company through November 16, 2009 (the issue
date of the Company’s condensed unaudited consolidated financial statements) and
concluded that no subsequent events have occurred that would require recognition
in the unaudited condensed consolidated financial statements.




10. Restatement




These financial
statements were prepared to correct the inadvertent ommission of an accrual
for sales commissions. This ommission resulted in the understatement of selling,
general and administrative expenses and accrued expenses in the amount of
$68,388. In addition, net loss was increased by $68,388 and net loss per share
increased $0.01






13




ITEM
      2.
            MANAGEMENT’S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS.





Certain
statements in “Management’s Discussion and Analysis and of Financial Condition
and Results of Operations” are forward-looking statements that involve risks and
uncertainties. Words such as may, will, should, would, anticipates, expects,
intends, plans, believes, seeks, estimates and similar expressions identify such
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management’s analysis only as of
the date hereof. We assume no obligation to update these forward-looking
statements to reflect actual results or changes in factors or assumptions
affecting forward-looking statements.




Overview





In 2007,
we initiated marketing and sales of RootGel, a product which reduces the use of
water and is primarily marketed to golf courses and the agriculture market. In
2008, we initiated marketing FireIce® , a water soluble fire retardant which
protects firefighters and is useful in containing fires including wildfires. In
March 2009, the Company entered into a distribution agreement for
SkinArmor, an innovative new fire retardant skin ointment being developed that
will be used to assist in protecting exposed skin from the effects of fire. In
addition, in 2010 the Company expects to complete development of IceWearTM, a
cooling vest which can be worn by firefighters, racecar drivers and others who
work in extreme heat. Our financial statements have been prepared on a going
concern basis, and we need to generate sufficient sales to support the ongoing
business of the Company.





We were
incorporated in July 2006 as a Florida corporation and reincorporated in
Delaware in November 2006. Our products were initially developed by
Dyn-O-Mat, Inc., a predecessor entity. Our Chief Technology Officer,
Mr. Peter Cordani, invented FireIce® and IceWearTM while at Dyn-O-Mat and
developed an earlier version of RootGel at Dyn-O-Mat as well. Mr. Cordani
developed the current version of RootGel on behalf of GelTech. WeatherTech, our
hurricane suppression product was also developed by Mr. Cordani while at
Dyn-O-Mat.




RESULTS
OF OPERATIONS




FOR
THE THREE MONTHS ENDED SEPTEMBER 30, 2009 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2008.




Sales





For the
three months ended September 30, 2009, we had sales of $287,554 as compared
to sales of $70,341 for the three months ended September 30, 2008, an
increase of $217,213. The increase in sales resulted from one major sale of
FireIce® amounting to $208,500 during the three months ended September 30,
2009. Sales of product during the quarter consisted of $60,850 for RootGel and
$226,704 for FireIce® The sales from 2008 sales were from both RootGel and
FireIce®TM.




Cost
of Goods Sold





Cost of
goods sold was $91,206 for the three months ended September 30, 2009 as
compared to cost of sales of $19,939 for the three months ended
September 30, 2008. The increase was the direct result of the increased
sales.




Selling,
General and Administrative Expenses





SG&A
expenses were $738,679 for the three months ended September 30, 2009 as
compared to $722,503 for the three months ended September 30, 2008. The
increase in  2009 expenses resulted from increases in sales
commissions of $68,000 and salary and employee benefits of $27,000, which were
partially offset by lower expense related to employee stock options, which
decreased $32,000, a decrease in travel expenses of $12,000, decreases in legal
and professional fees of $42,000 and a reduction in marketing
expenses.




Research
and Development Expenses





R&D
expenses were $3,766 for the three months ended September 30, 2009 as
compared to $16,817 for the three months ended September 30, 2008. The
decrease in fiscal 2010 expenses of $13,051 reflects that FireIce® and RootGel
research and development costs are winding down.




14





Loss
from Operations





Loss from
operations was $546,097 for the three months ended September 30, 2009 as
compared to $688,918 for the three months ended September 30, 2008. The
decrease in the loss from operations resulted from an increase of $145,946
in gross profit related to the higher revenues which was offset by the increase
in operating expenses.




Interest
Income





Interest
income was $12 for the three months ended September 30, 2009 as compared to
$0 for the three months ended September 30, 2008.




Interest
Expense





Interest
expense was $111,236 for the three months ended September 30, 2009 as
compared to $338 for the three months ended September 30, 2008. The
increase resulted from the higher balances on our Lines of Credit during the
three months ended September 30, 2009. Interest expense for the three
months ended September 30, 2009 included $86,250 related to the
amortization of debt issue costs.




Net
Loss





Net loss
was $657,321 for the three months ended September 30, 2009 as compared to
$676,489 for the three months ended September 30, 2008. The lower net loss
resulted from the increase in revenues during the three months ended
September 30, 2009. These factors were partially offset by the increase in
operating expenses and  interest expense. Net loss per common share
was $0.05 for the three months ended September 30, 2009 as compared to
$0.05 for the three months ended September 30, 2008. The weighted average
number of share outstanding as of September 30, 2009 and 2008 were
13,858,986 and 13,462,821, respectively.




LIQUIDITY
AND CAPITAL RESOURCES





Cash
flows used by operating activities for the three month period ended
September 30, 2009 were $714,714 in which our net loss of $657,321 was
negatively impacted by an increase in accounts receivable of $233,376 which was
offset by non-cash stock option compensation expense of $24,234, an increase in
accounts payable of $24,109, an increase in accrued liabilities of $68,815 and a
reduction of inventory of $38,579. For the three month period ended
September 30, 2008, net cash used in operating activities was $638,731,
comprised of the net loss for the period totaling $676,489, which was negatively
impacted by an increase in inventories of $69,182 which was offset by an
increase in accounts payable of $33,969 and by stock compensation expense of
$57,046.





Cash
flows used by investing activities for the three months ended September 30,
2009 were $938 which related to purchase of equipment. For the three month
period ended September 30, 2008, net cash provided by investing was
$646,608 which related to the sale of marketable debt securities of $650,000
which were partially offset by the acquisition of equipment costing
$3,392.





Cash
flows provided by financing activities for the three months ended
September 30, 2009 were $599,847, resulting from advances against the
Company’s Line of Credit agreement of $625,000 which were offset by repayment of
insurance premium finance contracts in the amount of $25,153. Cash flows used by
financing activities for the three months ended September 30, 2008 were
$6,953 which consisted of repayment of insurance premium finance
contracts.





As of
September 30, 2009, we had a working capital deficit of approximately
$1.8 million.  As of November 16, 2009, we have $107,000 in
available cash and marketable debt securities. We do not anticipate the need to
purchase any material capital assets in order to carry out our
business.





In
May 2009, we entered into a one-year $2,500,000 revolving line of credit
agreement with our largest shareholder. This line of credit has been used to
repay prior debt to the shareholder, pay for working capital and provide the
Company in financing the purchase of inventory for substantiated transactions.
As of November 16, 2009, GelTech has borrowed $2,375,000 under the line of
credit. The revolving line of credit note requires the Company to pay the
outstanding principal balance prior to its due date during which it will not be
permitted to borrow any sums for a period of 30 consecutive days. GelTech is
currently exploring raising additional equity or debt from private investors
since it only has approximately two months of working capital available. There
is no guarantee that such financing will be available to the Company. If the
Company is unable to generate substantial cash flows from sales of our products,
or through financings, the Company may not be able to remain
operational.




15





Related
Person Transactions





For
information on related party transactions and their financial impact, see Note 7
to the Condensed Consolidated Financial Statements (Unaudited).




Principal
Accounting Estimates





In
response to the SEC’s financial reporting release, FR-60, Cautionary Advice
Regarding Disclosure About Critical Accounting Policies, the Company has
selected its most subjective accounting estimation process for purposes of
explaining the methodology used in calculating the estimate, in addition to the
inherent uncertainties pertaining to the estimate and the possible effects on
the Company’s financial condition. The accounting estimate is discussed below.
This estimate involves certain assumptions that if incorrect could create a
material adverse impact on the Company’s results of operations and financial
condition.





Stock-Based
Compensation





Under ASC
718-10 which was effective as of January 1, 2006, we recognize an expense
for the fair value of our outstanding stock options as they vest, whether held
by employees or others.





We
estimate the fair value of each stock option and warrant at the grant date using
the Black-Scholes option pricing model based upon certain assumptions which are
contained in Note 1 to the unaudited condensed consolidated financial statements
contained in this report. The Black-Scholes model requires the input of highly
subjective assumptions including the expected stock price volatility. Because
our stock options and warrants have characteristics different from those of
traded options, and because changes in the subjective input of assumptions can
materially affect the fair value estimate, in our management’s opinion, the
existing models may not necessarily provide a reliable single measure of the
fair value of such stock options.




RECENT
ACCOUNTING PRONOUNCEMENTS




FASB Accounting Standards
Codification




(Accounting Standards Update (“ASU”)
2009-01)





In
June 2009, the Financial Accounting Standards Board (FASB) approved the
FASB Accounting Standards Codification (“the Codification”) as the single source
of authoritative nongovernmental GAAP. All existing accounting standard
documents, such as FASB, American Institute of Certified Public Accountants,
Emerging Issues Task Force and other related literature, excluding guidance from
the Securities and Exchange Commission (“SEC”), have been superseded by the
Codification. All other non-grandfathered, non-SEC accounting literature not
included in the Codification has become nonauthoritative. The Codification did
not change GAAP, but instead introduced a new structure that combines all
authoritative standards into a comprehensive, topically organized online
database. The Codification is effective for interim or annual periods ending
after September 15, 2009, and impacts the Company’s financial statements as
all future references to authoritative accounting literature will be referenced
in accordance with the Codification. There have been no changes to the content
of the Company’s financial statements or disclosures as a result of implementing
the Codification during the quarter ended September 30, 2009.





As a
result of the Company’s implementation of the Codification during the quarter
ended September 30, 2009, previous references to new accounting standards
and literature are no longer applicable. In the current quarter financial
statements, the Company will provide reference to both new and old guidance to
assist in understanding the impacts of recently adopted accounting literature,
particularly for guidance adopted since the beginning of the current fiscal year
but prior to the Codification.




16





Subsequent Events





(Included in Accounting Standards
Codification (“ASC”) 855 “Subsequent Events”, previously SFAS No. 165
“Subsequent Events”)





SFAS
No. 165 established general standards of accounting for and disclosure of
events that occur after the balance sheet date, but before the financial
statements are issued or available to be issued (“subsequent events”). An entity
is required to disclose the date through which subsequent events have been
evaluated and the basis for that date. For public entities, this is the date the
financial statements are issued. SFAS No. 165 does not apply to subsequent
events or transactions that are within the scope of other GAAP and did not
result in significant changes in the subsequent events reported by the Company.
SFAS No. 165 became effective for interim or annual periods ending after
June 15, 2009 and did not impact the Company’s financial statements. The
Company evaluated for subsequent events through the issuance date of the
Company’s financial statements. No recognized or non-recognized subsequent
events were noted.




Determination of
the Useful Life of Intangible Assets




(Included in ASC 350 “Intangibles —
Goodwill and Other”, previously FSP SFAS No. 142-3 “Determination of the
Useful Lives of Intangible Assets”)





FSP SFAS
No. 142-3 amended the factors that should be considered in developing
renewal or extension assumptions used to determine the useful life of a
recognized intangible asset under previously issued goodwill and intangible
assets topics. This change was intended to improve the consistency between the
useful life of a recognized intangible asset and the period of expected cash
flows used to measure the fair value of the asset under topics related to
business combinations and other GAAP. The requirement for determining useful
lives must be applied prospectively to intangible assets acquired after the
effective date and the disclosure requirements must be applied prospectively to
all intangible assets recognized as of, and subsequent to, the effective date.
FSP SFAS No. 142-3 became effective for financial statements issued for
fiscal years beginning after December 15, 2008, and interim periods within
those fiscal years. The adoption of FSP SFAS No. 142-3 did not impact the
Company’s financial statements.




Noncontrolling
Interests




(Included in ASC 810
“Consolidation”, previously SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements an amendment of ARB
No. 51”)





SFAS
No. 160 changed the accounting and reporting for minority interests such
that they will be recharacterized as noncontrolling interests and classified as
a component of equity. SFAS No. 160 became effective for fiscal years
beginning after December 15, 2008 with early application prohibited. The
Company implemented SFAS No. 160 at the start of fiscal 2010. The adoption
of ASC 810 did not have a material impact on the unaudited condensed
consolidated financial statements of the Company.




Consolidation of
Variable Interest Entities — Amended




(To be included in ASC 810
“Consolidation”, SFAS No. 167 “Amendments to FASB Interpretation
No. 46(R)”)





SFAS
No. 167 amends FASB Interpretation No. 46(R) “Consolidation of
Variable Interest Entities regarding certain guidance for determining whether an
entity is a variable interest entity and modifies the methods allowed for
determining the primary beneficiary of a variable interest entity. The
amendments include: (1) the elimination of the exemption for qualifying
special purpose entities, (2) a new approach for determining who should
consolidate a variable-interest entity, and (3) changes to when it is
necessary to reassess who should consolidate a variable-interest entity. SFAS
No. 167 is effective for the first annual reporting period beginning after
November 15, 2009, with earlier adoption prohibited. The Company will adopt
SFAS No. 167 in fiscal 2010 and does not anticipate any material impact on
the Company’s financial statements.




Forward
Looking Statements





The
statements in this Report relating to our expectations regarding our liquidity
and are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Additionally, words such as “expects,”
“anticipates,” “intends,” “believes,” “will” and similar words are used to
identify forward-looking statements.





17





The
results anticipated by any or all of these forward-looking statements might not
occur. Important factors, uncertainties and risks that may cause actual results
to differ materially from these forward-looking statements are the continuation
of the recession, the condition of the global credit markets and the capital
markets and our failure to general the sales we anticipate.





For more
information regarding some of the ongoing risks and uncertainties of our
business, see the Risk Factors contained in our Form 10-K for the year
ended June 30, 2009. We undertake no obligation to publicly update or
revise any forward-looking statements, whether as a result of new information,
future events or otherwise.




PART
II – OTHER INFORMATION




ITEM
      6.
            EXHIBITS.




No.
            
            Description
            
            Incorporated
      By Reference
            
            Exhibit #3.1
            
            Certificate
      of Incorporation
            
            Form SB-2
      filed on July 20, 2007
            
            3.13.2
            
            Amended
      and Restated Bylaws
            
            Form SB-2
      filed on July 20, 2007
            
            3.210.1
            
            Credit
      Enhancement and Financing Security Agreement
            
            Form 10-K
      filed on September 28, 2009
            
            10.110.2
            
            Revolving
      Line of Credit Agreement *
            
            Form 10-K
      filed on September 28, 2009
            
            10.231.1
            
            Certification
      of Principal Executive Officer (Section 302)
            
            Filed
      with this report31.2
            
            Certification
      of Principal Financial Officer (Section 302)
            
            Filed
      with this report32.1
            
            Certification
      of Chief Executive Officer and Chief Financial Officer
      (Section 906)
            
            Furnished
      with this report


———————


*The
confidential disclosure schedules are not filed in accordance with SEC Staff
policy, but will be provided to the Staff upon request.  Certain
material agreements contain representations and warranties, which are qualified
by the following factors:





(i)
            the
      representations and warranties contained in any agreements filed with this
      report were made for the purposes of allocating contractual risk between
      the parties and not as a means of establishing
  facts;


(ii)
            the
      agreement may have different standards of materiality than standards of
      materiality under applicable securities
laws;


(iii)
            the
      representations are qualified by a confidential disclosure schedule that
      contains nonpublic information that is not material under applicable
      securities laws;


(iv)
            facts
      may have changed since the date of the agreements;
  and


(v)
            only
      parties to the agreements and specified third-party beneficiaries have a
      right to enforce the agreements.




Notwithstanding
the above, any information contained in a schedule that would cause a reasonable
investor (or that a reasonable investor would consider important in making a
decision) to buy or sell our common stock has been included. We have been
further advised by our counsel that in all instances the standard of materiality
under the federal securities laws will determine whether or not information has
been omitted; in other words, any information that is not material under the
federal securities laws may be omitted. Furthermore, information which may have
a different standard of materiality will nonetheless be disclosed if material
under the federal securities laws.




18






SIGNATURES







Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.






GELTECH
      SOLUTIONS, INC.February 16,
      2010
              By:
              /s/MichaelCordaniMichael
      CordaniChief
      Executive Officer
                (Principal
      Executive Officer)February 16,
      2010
              By:
              /s/
      Michael
      HullMichael
      HullChief
      Financial Officer
                (Principal
      Financial Officer)