----

----

| þ                                                              | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  |
|---------------------------------------------------------------------|------------------------------------------------------------------------------------------|
|                                                                |                                                                                     |
| For the quarterly period ended September 30, 2010                   |
|                                                                |                                                                                     |
| OR                                                                  |
|                                                                |                                                                                     |
| o                                                                   | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|                                                                |                                                                                     |
| For the transition period from ________________ to ________________ |

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

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

| Class                                    |   | Outstanding at November 12, 2010 |
|------------------------------------------|--------|----------------------------------|
| Common Stock, $0.001 par value per share |   | 17,307,200 shares                |

----

----

----

| PART I – FINANCIAL INFORMATION |                                                                                                                    |
|--------------------------------------|-------------------------------------------------------------------------------------------------------------------------|
|                                 |                                                                                                                    |   |   |   |
| Item 1.                              | Consolidated Financial Statements.                                                                                 |   |   |   |
|                                 |                                                                                                                    |   |   |   |
|                                 | Condensed Consolidated Balance Sheets as of September 30, 2010 (Unaudited) and June 30, 2010                            |   | 1 |   |
|                                 |                                                                                                                    |   |   |   |
|                                 | Condensed Consolidated Statements of Operations for the three months ended September 30, 2010 and 2009 (Unaudited) |   | 2 |   |
|                                 |                                                                                                                    |   |   |   |
|                                 | Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2010 and 2009 (Unaudited)      |   | 3 |   |
|                                 |                                                                                                                    |   |   |   |
|                                 | Notes to Condensed Consolidated Financial Statements (Unaudited)                                                   |   | 4 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 2.                         | Management’s Discussion and Analysis of Financial Condition and Results of Operations.                            |   | 15 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 3.                    | Quantitative and Qualitative Disclosures About Market Risk.                                                             |   | 19 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 4.                    | Controls and Procedures                                                                                                 |   | 19 |   |
|                                 |                                                                                                                    |   |   |   |
| PART II – OTHER INFORMATION    |                                                                                                                    |
|                                 |                                                                                                                    |   |   |   |
| Item 1.                              | Legal Proceedings.                                                                                                      |   | 20 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 1A.                             | Risk Factors.                                                                                                           |   |  20 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 2.                              | Unregistered Sales of Equity Securities and Use of Proceeds.                                                            |   |  20 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 3.                              | Defaults Upon Senior Securities.                                                                                        |   |  20 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 4.                              | Submission of Matters to a Vote of Security Holders.                                                                    |   |  20 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 5.                              | Other Information.                                                                                                      |   |  20 |   |
|                                 |                                                                                                                    |   |   |   |
| Item 6.                              | Exhibits.                                                                                                               |   |  20 |   |
|                                 |                                                                                                                    |   |   |   |
| SIGNATURES                           |                                                                                                                    |   | 21 |   |

----

| ITEM 1.  | CONSOLIDATED FINANCIAL STATEMENTS. |
|--------------------|------------------------------------|

|                                                                                                                                     |   | As of September 30, |        |   | As of June 30, |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-------------|--------|----------------|--------|
|                                                                                                                                     |   | 2010                     |        |   | 2010           |   |
|                                                                                                                                     |   | (Unaudited)              |        |   |           |   |
| ASSETS                                                                                                                                   |   |                     |        |   |           |   |
|                                                                                                                                     |   |                     |        |   |           |   |
| Cash and cash equivalents                                                                                                                |   | $                        | 189,763     |   |           | $      | 625,796 |   |
| Accounts receivable trade, net                                                                                                           |   |                     | 23,633      |   |           |   | 24,647 |   |
| Inventories                                                                                                                              |   |                     | 261,839     |   |           |   | 198,274 |   |
| Prepaid consulting                                                                                                                       |   |                     | 251,510     |   |           |   | - |   |
| Prepaid expenses and other current assets                                                                                                |   |                     | 45,722      |   |           |   | 43,250 |   |
| Total current assets                                                                                                                     |   |                     | 772,467     |   |           |   | 891,967 |   |
|                                                                                                                                     |   |                     |        |   |           |   |   |   |
| Furniture, fixtures and equipment, net                                                                                                   |   |                     | 18,467      |   |           |   | 20,014 |   |
| Prepaid consulting                                                                                                                       |   |                     | -           |   |           |   | 255,436 |   |
| Debt issue costs, net                                                                                                                    |   |                     | 185,347     |   |           |   | 254,852 |   |
| Deposits                                                                                                                                 |   |                     | 25,631      |   |           |   | 42,829 |   |
|                                                                                                                                     |   |                     |        |   |           |   |   |   |
|                                                                                                                                     |   | $                        | 1,001,912   |   |           | $      | 1,465,098 |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                                                                           |   |                     |        |   |           |   |   |   |
|                                                                                                                                     |   |                     |        |   |           |   |   |   |
| Accounts payable                                                                                                                         |   | $                        | 161,078     |   |           | $      | 25,213 |   |
| Accrued expenses                                                                                                                         |   |                     | 11,204      |   |           |   | 88,010 |   |
| Line of credit                                                                                                                           |   |                     | 2,458,156   |   |           |   | 2,458,156 |   |
| Insurance premium finance contract                                                                                                       |   |                     | 4,755       |   |           |   | 8,135 |   |
| Total current liabilities                                                                                                                |   |                     | 2,635,193   |   |           |   | 2,579,514 |   |
| Total liabilities                                                                                                                        |   |                     | 2,635,193   |   |           |   | 2,579,514 |   |
|                                                                                                                                     |   |                     |        |   |           |   |   |   |
| Commitments 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;                                                                            |   |                     |        |   |           |   |   |   |
|  16,925,720 issued and 80,000 issuable at September 30, 2010 and 16,538,200 shares issued  and outstanding as of June 30, 2010 |   |                     | 17,006      |   |           |   | 16,538 |   |
| Additional paid in capital                                                                                                               |   |                     | 8,990,046   |   |           |   | 8,512,232 |   |
| Accumulated deficit                                                                                                                      |   |                     | (10,640,333 | )      |           |   | (9,643,186 | ) |
| Total stockholders'  equity (deficit)                                                                                          |   |                     | (1,633,281  | )      |           |   | (1,114,416 | ) |
|                                                                                                                                     |   |                     |        |   |           |   |   |   |
| Total liabilities and stockholders' equity (deficit)                                                                                     |   | $                        | 1,001,912   |   |           | $      | 1,465,098 |   |

----

|                                                    |   | For the Three Months Ended September 30, |       |
|---------------------------------------------------------|--------|-----------------------------------------------|------------|
|                                                    |   | 2010                                          |       |   | 2009 |   |
|                                                    |   |                                          |       |   |   |   |
| Sales                                                   |   | $                                             | 28,557     |   |   | $ | 287,554 |   |
|                                                    |   |                                          |       |   |   |   |   |   |
| Cost of goods sold                                      |   |                                          | 8,664      |   |   |   | 91,206 |   |
|                                                    |   |                                          |       |   |   |   |   |   |
| Gross profit                                            |   |                                          | 19,893     |   |   |   | 196,348 |   |
|                                                    |   |                                          |       |   |   |   |   |   |
| Operating expenses:                                     |   |                                          |       |   |   |   |   |   |
| Selling, general and administrative expenses            |   |                                          | 881,210    |   |   |   | 738,679 |   |
| Research and development                                |   |                                          | 35,583     |   |   |   | 3,766 |   |
|                                                    |   |                                          |       |   |   |   |   |   |
| Total operating expenses                                |   |                                          | 916,793    |   |   |   | 742,445 |   |
|                                                    |   |                                          |       |   |   |   |   |   |
| Loss from operations                                    |   |                                          | (896,900   | ) |   |   | (546,097 | ) |
|                                                    |   |                                          |       |   |   |   |   |   |
| Other income (expense)                                  |   |                                          |       |   |   |   |   |   |
| Interest income                                         |   |                                          | 1,274      |   |   |   | 12 |   |
| Interest expense                                        |   |                                          | (101,521   | ) |   |   | (111,236 | ) |
| Other expense                                           |   |                                          | -          |   |   |   | - |   |
|                                                    |   |                                          |       |   |   |   |   |   |
| Total other income (expense)                            |   |                                          | (100,247   | ) |   |   | (111,224 | ) |
|                                                    |   |                                          |       |   |   |   |   |   |
| Net loss                                                |   | $                                             | (997,147   | ) |   | $ | (657,321 | ) |
|                                                    |   |                                          |       |   |   |   |   |   |
|                                                    |   |                                          |       |   |   |   |   |   |
| Net loss per common share - basic and diluted           |   | $                                             | (0.06      | ) |   | $ | (0.05 | ) |
|                                                    |   |                                          |       |   |   |   |   |   |
| Weighted average shares outstanding - basic and diluted |   |                                          | 16,672,024 |   |   |   | 13,858,986 |   |

----

|                                                                     |   | For the Three Months Ended September 30, |     |
|--------------------------------------------------------------------------|--------|-----------------------------------------------|----------|
|                                                                     |   | 2010                                          |     |   | 2009 |   |
| Cash flows from operating activities                                     |   |                                          |     |   |   |   |
| Reconciliation of net loss to net cash used in operating activities:     |   |                                          |     |   |   |   |
| Net loss                                                                 |   | $                                             | (997,147 | ) |   | $ | (657,321 | ) |
| Adjustments to reconcile net loss to net cash                            |   |                                          |     |   |   |   |   |   |
|  used in operating activities:                                      |   |                                          |     |   |   |   |   |   |
| Depreciation                                                             |   |                                          | 3,318    |   |   |   | 1,674 |   |
| Amortization of debt issuance costs                                      |   |                                          | 69,505   |   |   |   | 86,250 |   |
| Amortization of prepaid consulting                                       |   |                                          | 69,426   |   |   |   | - |   |
| Stock option compensation expense                                        |   |                                          | 60,782   |   |   |   | 24,234 |   |
| Changes in operating assets and liabilities:                        |   |                                          |     |   |   |   |   |   |
| Accounts receivable                                                      |   |                                          | 1,014    |   |   |   | (233,376 | ) |
| Inventories                                                              |   |                                          | (63,565  | ) |   |   | 38,579 |   |
| Prepaid expenses and other current assets                                |   |                                          | 1,529    |   |   |   | 7,323 |   |
| Deposits and other assets                                                |   |                                          | 17,198   |   |   |   | (15,001 | ) |
| Accounts payable                                                         |   |                                          | 135,865  |   |   |   | 24,109 |   |
| Related party payable                                                    |   |                                          | -        |   |   |   | (60,000 | ) |
| Accrued expenses                                                         |   |                                          | (76,806  | ) |   |   | 68,815 |   |
| Net cash used in operating activities                                    |   |                                          | (778,881 | ) |   |   | (714,714 | ) |
| Cash flows from Investing Activities                                     |   |                                          |     |   |   |   |   |   |
| Purchases of equipment                                                   |   |                                          | (1,771   | ) |   |   | (938 | ) |
| Net cash provided by (used in) investing activities                      |   |                                          | (1,771   | ) |   |   | (938 | ) |
| Cash flows from Financing Activities                                     |   |                                          |     |   |   |   |   |   |
| Payments on Insurance Finance Contract                                   |   |                                          | (7,381   | ) |   |   | (25,153 | ) |
| Proceeds from sale of stock and warrants, net of expenses                |   |                                          | 352,000  |   |   |   | - |   |
| Proceeds from revolving line of credit, net                              |   |                                          | -        |   |   |   | 625,000 |   |
| Net cash provided by financing activities                                |   |                                          | 344,619  |   |   |   | 599,847 |   |
| Net decrease in cash and cash equivalents                                |   |                                          | (436,033 | ) |   |   | (115,805 | ) |
| Cash and cash equivalents - beginning                                    |   |                                          | 625,796  |   |   |   | 245,381 |   |
| Cash and cash equivalents - ending                                       |   | $                                             | 189,763  |   |   | $ | 129,576 |   |
|                                                                     |   |                                          |     |   |   |   |   |   |
| Supplemental Disclosure of Cash Flow Information:                        |   |                                          |     |   |   |   |   |   |
| Cash paid for interest                                                   |   | $                                             | 31,184   |   |   | $ | 24,798 |   |
| Cash paid for income taxes                                               |   | $                                             | -        |   |   | $ | - |   |
| Supplementary Disclosure of Non-cash Investing and Financing Activities: |   |                                          |     |   |   |   |   |   |
| Financing of prepaid insurance contracts                                 |   | $                                             | 4,001    |   |   | $ | 25,449 |   |
| Stock issued for consulting agreement                                    |   | $                                             | 65,500   |   |   | $ | - |   |

----

| 1. | Organization and Basis of Presentation |
|----|----------------------------------------|

----

----

| Employee Options                                                                                |   |              |      |   |                            |   |   |                                        |   |   |                           |   |
|-------------------------------------------------------------------------------------------------|--------|-------------------|-----------|--------|---------------------------------|--------|--------|---------------------------------------------|--------|--------|--------------------------------|--------|
|                                                                                            |   | Number of Options |      |   | Weighted Average Exercise Price |   |   | Weighted Average Remaining Contractual Life |   |   | Aggregate Intrinsic Value |   |
| Balance at June 30, 2009                                                                        |   |              | 2,714,000 |   |                            | $      | 0.92   |                                        |   |   | 8.20                           |   |   |   |   |
| Granted                                                                                         |   |              | -         |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Exercised                                                                                       |   |              | -         |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Forfeited                                                                                       |   |              | (500,000  | )      |                            | $      | 1.00   |                                        |   |   | 9.75                           |   |   |   |   |
| Expired                                                                                         |   |              | -         |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Outstanding at September 30, 2009                                                               |   |              | 2,214,000 |   |                            | $      | 0.90   |                                        |   |   | 7.66                           |   |   | $ | 2,655,952 |   |
| Exercisable at September 30, 2009                                                               |   |              | 877,834   |   |                            | $      | 0.87   |                                        |   |   | 5.37                           |   |   | $ | 1,078,668 |   |
|                                                                                            |   |              |      |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Weighted average fair value of options granted during the three months ended September 30, 2009 |   |              |      |   |                            |   | N/A    |                                        |   |   |                           |   |   |   |   |   |
|                                                                                            |   |              |      |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Balance at June 30, 2010                                                                        |   |              | 1,649,007 |   |                            | $      | 0.88   |                                        |   |   | 6.40                           |   |   |   |   |   |
| Granted                                                                                         |   |              | -         |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Exercised                                                                                       |   |              | -         |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Options sold to third party                                                                     |   |              | -         |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Forfeited                                                                                       |   |              | -         |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Expired                                                                                         |   |              | -         |   |                            | $      | -      |                                        |   |   |                           |   |   |   |   |   |
| Outstanding at September 30, 2010                                                               |   |              | 1,649,007 |   |                            | $      | 0.88   |                                        |   |   | 6.15                           |   |   | $ | 858,511 |   |
| Exercisable at September 30, 2010                                                               |   |              | 1,049,008 |   |                            | $      | 0.84   |                                        |   |   | 5.04                           |   |   | $ | 585,211 |   |
|                                                                                            |   |              |      |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Weighted average fair value of options granted during the three months ended September 30, 2010 |   |              |      |   |                            |   | N/A    |                                        |   |   |                           |   |   |   |   |   |

----

| Options Issued to Directors                                                                     |   |              |    |   |                            |   |   |                                        |   |   |                           |   |
|-------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|---------------------------------|--------|--------|---------------------------------------------|--------|--------|--------------------------------|--------|
|                                                                                            |   | Number of Options |    |   | Weighted Average Exercise Price |   |   | Weighted Average Remaining Contractual Life |   |   | Aggregate Intrinsic Value |   |
| Balance at June 30, 2009                                                                        |   |              | 205,000 |   |                            | $      | 0.86   |                                        |   |   | 5.89                           |   |   |   |   |
| Granted                                                                                         |   |              | 100,000 |   |                            | $      | 1.84   |                                        |   |   | 10.00                          |   |   |   |   |
| Exercised                                                                                       |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Forfeited                                                                                       |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Expired                                                                                         |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Outstanding at September 30, 2009                                                               |   |              | 305,000 |   |                            | $      | 1.18   |                                        |   |   | 7.67                           |   |   | $ | 279,550 |   |
| Exercisable at September 30, 2009                                                               |   |              | 205,000 |   |                            | $      | 0.86   |                                        |   |   | 6.67                           |   |   | $ | 253,550 |   |
|                                                                                            |   |              |    |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Weighted average fair value of options granted during the three months ended September 30, 2009 |   |              |    |   |                            | $      | 1.78   |                                        |   |   |                           |   |   |   |   |   |
|                                                                                            |   |              |    |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Balance at June 30, 2010                                                                        |   |              | 370,000 |   |                            | $      | 1.28   |                                        |   |   | 7.41                           |   |   |   |   |   |
| Granted                                                                                         |   |              | 210,000 |   |                            | $      | 1.20   |                                        |   |   | 10.00                          |   |   |   |   |   |
| Exercised                                                                                       |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Forfeited                                                                                       |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Expired                                                                                         |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Outstanding at September 30, 2010                                                               |   |              | 580,000 |   |                            | $      | 1.25   |                                        |   |   | 5.25                           |   |   | $ | 151,600 |   |
| Exercisable at September 30, 2010                                                               |   |              | 315,833 |   |                            | $      | 1.20   |                                        |   |   | 6.77                           |   |   | $ | 110,050 |   |
|                                                                                            |   |              |    |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Weighted average fair value of options granted during the three months ended September 30, 2010 |   |              |    |   |                            | $      | 0.74   |                                        |   |   |                           |   |   |   |   |   |

----

| Non-Employee, Non-Director Options                                                              |   |              |    |   |                            |   |   |                                        |   |   |                           |   |
|-------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|---------------------------------|--------|--------|---------------------------------------------|--------|--------|--------------------------------|--------|
|                                                                                            |   | Number of Options |    |   | Weighted Average Exercise Price |   |   | Weighted Average Remaining Contractual Life |   |   | Aggregate Intrinsic Value |   |
| Balance at June 30, 2009                                                                        |   |              | 170,000 |   |                            | $      | 1.00   |                                        |   |   | 3.53                           |   |   |   |   |
| Granted                                                                                         |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Exercised                                                                                       |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Forfeited                                                                                       |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Expired                                                                                         |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |
| Outstanding at September 30, 2009                                                               |   |              | 170,000 |   |                            | $      | 1.00   |                                        |   |   | 3.27                           |   |   | $ | 187,000 |   |
| Exercisable at September 30, 2009                                                               |   |              | 136,707 |   |                            | $      | 0.99   |                                        |   |   | 3.27                           |   |   | $ | 150,378 |   |
|                                                                                            |   |              |    |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Weighted average fair value of options granted during the three months ended September 30, 2009 |   |              |    |   |                            |   | N/A    |                                        |   |   |                           |   |   |   |   |   |
|                                                                                            |   |              |    |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Balance at June 30, 2010                                                                        |   |              | 155,000 |   |                            | $      | 1.00   |                                        |   |   | 2.53                           |   |   |   |   |   |
| Granted                                                                                         |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Options purchased from officer                                                                  |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Exercised                                                                                       |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Forfeited                                                                                       |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Expired                                                                                         |   |              | -       |   |                            | $      | -      |                                        |   |   | -                              |   |   |   |   |   |
| Outstanding at September 30, 2010                                                               |   |              | 155,000 |   |                            | $      | 1.00   |                                        |   |   | 2.27                           |   |   | $ | 62,000 |   |
| Exercisable at September 30, 2010                                                               |   |              | 155,000 |   |                            | $      | 1.00   |                                        |   |   | 2.27                           |   |   | $ | 62,000 |   |
|                                                                                            |   |              |    |   |                            |   |   |                                        |   |   |                           |   |   |   |   |   |
| Weighted average fair value of options granted during the three months ended September 30, 2010 |   |              |    |   |                            |   | N/A    |                                        |   |   |                           |   |   |   |   |   |

----

| Risk free interest rate      |   |   | 1.76% - 1.96%  |   |
|------------------------------|--------|--------|----------------|--------|
| Expected term (in years)     |   |   | 5.5 - 6.5      |   |
| Dividend yield               |   |   | –– |   |
| Volatility of common stock   |   |   | 92.4% - 96.46% |   |
| Estimated annual forfeitures |   |   | –– |   |

----

----

| Warrants Issued as Settlements                                                                   |   |               |    |   |                            |   |   |                       |   |
|--------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|---------------------------------|--------|--------|----------------------------|--------|
|                                                                                             |   | Number of Warrants |    |   | Weighted Average Exercise Price |   |   | Remaining Contractual Life |   |
| Balance at June 30, 2009                                                                         |   |               | 474,058 |   |                            | $      | 1.05   |                       |   |   | 0.91 |   |
| Granted                                                                                          |   |               | -       |   |                            | $      | -      |                       |   |   | - |   |
| Exercised                                                                                        |   |               | -       |   |                            | $      | -      |                       |   |   | - |   |
| Forfeited                                                                                        |   |               | -       |   |                            | $      | -      |                       |   |   | - |   |
| Expired                                                                                          |   |               | -       |   |                            | $      | -      |                       |   |   | - |   |
| Outstanding at September 30, 2009                                                                |   |               | 474,058 |   |                            | $      | 1.05   |                       |   |   | 0.76 |   |
| Exercisable at September 30, 2009                                                                |   |               | 474,058 |   |                            | $      | 1.05   |                       |   |   | 0.76 |   |
|                                                                                             |   |               |    |   |                            |   |   |                       |   |   |   |   |
| Weighted average fair value of warrants granted during the three months ended September 30, 2009 |   |               |    |   |                            |   | N/A    |                       |   |   |   |   |
|                                                                                             |   |               |    |   |                            |   |   |                       |   |   |   |   |
| Balance at June 30, 2010                                                                         |   |               | 474,058 |   |                            | $      | 1.05   |                       |   |   | 1.92 |   |
| Granted                                                                                          |   |               | -       |   |                            | $      | -      |                       |   |   | - |   |
| Exercised                                                                                        |   |               | -       |   |                            | $      | -      |                       |   |   | - |   |
| Forfeited                                                                                        |   |               | -       |   |                            | $      | -      |                       |   |   | - |   |
| Expired                                                                                          |   |               | -       |   |                            | $      | -      |                       |   |   | - |   |
| Outstanding at September 30, 2010                                                                |   |               | 474,058 |   |                            | $      | 1.05   |                       |   |   | 1.67 |   |
| Exercisable at September 30, 2010                                                                |   |               | 474,058 |   |                            | $      | 1.05   |                       |   |   | 1.67 |   |
|                                                                                             |   |               |    |   |                            |   |   |                       |   |   |   |   |
| Weighted average fair value of warrants granted during the three months ended September 30, 2010 |   |               |    |   |                            |   | N/A    |                       |   |   |   |   |

----

| Warrants issued for cash                                                                         |   |               |      |   |                            |   |   |                       |   |
|--------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|---------------------------------|--------|--------|----------------------------|--------|
|                                                                                             |   | Number of Warrants |      |   | Weighted Average Exercise Price |   |   | Remaining Contractual Life |   |
| Balance at June 30, 2009                                                                         |   |               | 528,303   |   |                            | $      | 1.14   |                       |   |   | 1.29 |   |
| Granted                                                                                          |   |               | -         |   |                            | $      | -      |                       |   |   | - |   |
| Exercised                                                                                        |   |               | -         |   |                            | $      | -      |                       |   |   | - |   |
| Forfeited                                                                                        |   |               | -         |   |                            | $      | -      |                       |   |   | - |   |
| Expired                                                                                          |   |               | -         |   |                            | $      | -      |                       |   |   | - |   |
| Outstanding at September 30, 2009                                                                |   |               | 528,303   |   |                            | $      | 1.14   |                       |   |   | 1.04 |   |
| Exercisable at September 30, 2009                                                                |   |               | 528,303   |   |                            | $      | 1.14   |                       |   |   | 1.04 |   |
|                                                                                             |   |               |      |   |                            |   |   |                       |   |   |   |   |
| Weighted average fair value of warrants granted during the three months ended September 30, 2009 |   |               |      |   |                            |   | N/A    |                       |   |   |   |   |
|                                                                                             |   |               |      |   |                            |   |   |                       |   |   |   |   |
| Balance at June 30, 2010                                                                         |   |               | 2,733,303 |   |                            | $      | 1.56   |                       |   |   | 2.37 |   |
| Granted                                                                                          |   |               | 380,000   |   |                            | $      | 1.25   |                       |   |   | 4.05 |   |
| Exercised                                                                                        |   |               | -         |   |                            | $      | -      |                       |   |   | - |   |
| Forfeited                                                                                        |   |               | -         |   |                            | $      | -      |                       |   |   | - |   |
| Expired                                                                                          |   |               | -         |   |                            | $      | -      |                       |   |   | - |   |
| Outstanding at September 30, 2010                                                                |   |               | 3,113,303 |   |                            | $      | 1.56   |                       |   |   | 2.34 |   |
| Exercisable at September 30, 2010                                                                |   |               | 3,113,303 |   |                            | $      | 1.56   |                       |   |   | 2.34 |   |
|                                                                                             |   |               |      |   |                            |   |   |                       |   |   |   |   |
| Weighted average fair value of warrants granted during the three months ended September 30, 2010 |   |               |      |   |                            |   | N/A    |                       |   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Fair Value Measurements Using |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | Total                         |    |   | Quoted Prices in ActiveMarkets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | SignificantUnobservable Inputs(Level 3) |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                          |    |   |   |   |   |   |   |   |   |   |
| Cash                                                                                  |   | $                             | 191,717 |   |   | $ | 191,717 |   |   | $ | –– |   |   | $ | –– |   |

|   | · | the CEO’s wife is 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. |
|--------|--------|--------------------------------------------------------------------|

----

----

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

----

----

| PRICEPER SHARE  |   | AMOUNT OFMONEY |
|-----------------|--------|----------------|
| $1.00 - $1.39   |   | $30,000        |
| $1.40 - $1.79   |   | $60,000        |
| $1.80 - $2.99   |   | $120,000       |
| $3.00 - $3.99   |   | $240,000       |
| $4.00 or Higher |   | $500,000       |

----

| -  | The price of the product sold is fixed or determinable and evidence of an agreement is present |
|---------|------------------------------------------------------------------------------------------------|

| - | The title and risk of loss of the product has passed to the buyer and the sale is not contingent upon the buyer being able to resell the product. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------|

| - | We have a reasonable expectation that the buyer has the intent and the ability to pay for the product ordered. |
|---|----------------------------------------------------------------------------------------------------------------|

| -  | We have no future obligation to the seller related to the product sold. |
|---------|-------------------------------------------------------------------------|

----

| ITEM 3.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
|--------------------|-------------------------------------------------------------|

| ITEM 4.  | CONTROLS AND PROCEDURES. |
|--------------------|--------------------------|

----

| ITEM 1.  | LEGAL PROCEEDINGS. |
|--------------------|--------------------|

| ITEM 2.  | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
|--------------------|--------------------------------------------------------------|

| Name or Class of Investor |   | Date of Sale |   | No. of Securities                                                                        |   | Reason for Issuance    |
|--------------------------------|--------|--------------|--------|-----------------------------------------------------------------------------------------------|--------|------------------------|
|                           |   |         |   |                                                                                          |   |                   |
| Investor (1)                   |   | 8/26/10      |   | 150,000 shares of common stock and 150,000 three-year warrants exercisable at $1.25 per share |   | Investment of $135,000 |

| ITEM 3.  | DEFAULTS UPON SENIOR SECURITIES. |
|--------------------|----------------------------------|

| ITEM 4.  | (REMOVED AND RESERVED). |
|--------------------|-------------------------|

| ITEM 5.  | OTHER INFORMATION. |
|--------------------|--------------------|

| ITEM 6.  | EXHIBITS. |
|--------------------|-----------|

| Exhibit |    |                                                                                       |    | Incorporated by Reference |    | Filed orFurnished |         |
|---------|--------------|-------------------------------------------------------------------------------------------------|--------------|-------------------------------------|--------------|------------------------|--------------|
| #       |    | Exhibit Description                                                                        |    | Form                                |    | Date                   |    | Number |    | Herewith |   |
|    |         |                                                                                            |         |                                |         |                   |         |   |   |   |   |
| 3.1     |         | Certificate of Incorporation                                                                    |         | SB-2                                |         | 7/20/07                |         | 3.1 |   |   |   |
| 3.2     |         | Amended and Restated Bylaws                                                                     |         | SB-2                                |         | 7/20/07                |         | 3.2 |   |   |   |
| 3.3     |         | First Amendment to the Amended and Restated Bylaws adopted April 6, 2010                        |         | 10-K                                |         | 9/28/10                |         | 3.3 |   |   |   |
| 4.1     |         | Form of Private Placement Warrant                                                               |         |                                |         |                   |         |   |   | Filed |   |
| 10.1    |         | Form of Private Placement Subscription Agreement                                                |         |                                |         |                   |         |   |   | Filed |   |
| 10.2    |         | Lincoln Park Purchase Agreement                                                                 |         | S-1                                 |         | 11/4/10                |         | 10.13 |   |   |   |
| 10.3    |         | Amendment to Lincoln Park Purchase Agreement                                                    |         | S-1                                 |         | 11/4/10                |         | 10.16 |   |   |   |
| 10.4    |         | Lincoln Park Registration Rights Agreement                                                      |         | S-1                                 |         | 11/4/10                |         | 10.14 |   |   |   |
| 10.5    |         | Lincoln Park Warrant                                                                            |         | 8-K                                 |         | 9/7/10                 |         | 10.3 |   |   |   |
| 31.1    |         | Certification of Principal Executive Officer (Section 302)                            |         |                                |         |                   |         |   |   | Filed |   |
| 31.2    |         | Certification of Principal Financial Officer (Section 302)                                 |         |                                |         |                   |         |   |   | Filed |   |
| 32.1    |         | Certification of Principal Executive Officer and Principal Financial Officer (Section 906) |         |                                |         |                   |         |   |   | Furnished |   |

----

|              |         | GELTECH SOLUTIONS, INC.                              |   |
|-------------------|--------------|------------------------------------------------------|--------|
|              |         |                                                 |   |
| November 15, 2010 |    | /s/ Michael Cordani                             |   |
|              |         | Michael Cordani                                      |   |
|              |         | Chief Executive Officer(Principal Executive Officer) |   |
|              |         |                                                 |   |
| November 15, 2010 |         | /s/ Michael Hull                                |   |
|              |         | Michael Hull                                         |   |
|              |         | Chief Financial Officer(Principal Financial Officer) |   |