10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission file 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. Employer
incorporation or organization)	Identification No.)
1460 Park Lane South, Suite 1, Jupiter, Florida	33458
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (561) 427-6144

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  o

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  þ     No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o     No  þ

Class	Outstanding at February 8, 2013
Common Stock, $0.001 par value per share	29,400,512 shares

Table of Contents

	PART I – FINANCIAL INFORMATION
ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.	1
	Condensed Consolidated Balance Sheets as of December 31, 2012 (Unaudited) and June 30, 2012	1
	Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2012 and 2011 (Unaudited)	2
	Condensed Consolidated Statements of Cash Flows for the six months ended December 31, 2012 and 2011 (Unaudited)	3
	Notes to Condensed Consolidated Financial Statements (Unaudited)	4
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.	18
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.	24
ITEM 4.	CONTROLS AND PROCEDURES.	24
	PART II – OTHER INFORMATION
ITEM 1.	LEGAL PROCEEDINGS.	25
ITEM 1A.	RISK FACTORS.	25
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.	25
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES.	25
ITEM 4.	MINE SAFETY DISCLOSURES.	25
ITEM 5.	OTHER INFORMATION.	25
ITEM 6.	EXHIBITS.	25
	SIGNATURES	26

PART I – FINANCIAL INFORMATION

ITEM 1. 

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of December 31,			As of June 30,
	2012			2012
	(Unaudited)
ASSETS
Cash and cash equivalents	$	280,549		$	84,194
Accounts receivable trade, net		43,716			55,160
Inventories		575,783			546,118
Prepaid expenses and other current assets		71,653			45,785
Total current assets		971,701			731,257
Furniture, fixtures and equipment, net		166,718			188,779
Deposits		15,631			15,631
Total assets	$	1,154,050		$	935,667
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Accounts payable	$	201,705		$	234,375
Accrued expenses		68,096			72,637
Litigation accrual		1,446,000			1,646,000
Notes payable - related parties		24,541			84,380
Convertible notes - related parties, net of discount		289,533			283,230
Convertible notes - third parties, net of discount		244,061			74,214
Insurance premium finance contract		37,688			9,250
Total current liabilities		2,311,624			2,404,086
Convertible note - related party		1,497,483			1,497,483
Total liabilities		3,809,107			3,901,569
Commitments and contingencies (Note 5)
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; 29,190,286 and 24,914,474 shares issued and outstanding as of December 31, 2012 and June 30, 2012 , respectively.		29,190			24,914
Additional paid in capital		23,327,123			19,809,070
Accumulated deficit		(26,011,370	)		(22,799,886	)
Total stockholders' equity (deficit)		(2,655,057	)		(2,965,902	)
Total liabilities and stockholders' equity (deficit)	$	1,154,050		$	935,667

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 December 31,						For the Six Months Ended December 31,
	2012			2011			2012			2011
Sales	$	37,453		$	84,551		$	121,903		$	262,953
Cost of goods sold		13,499			39,181			49,578			114,421
Gross profit		23,954			45,370			72,325			148,532
Operating expenses:
Selling, general and administrative expenses		1,526,616			1,123,204			3,076,098			2,626,410
Research and development		6,423			7,726			23,731			49,975
Total operating expenses		1,533,039			1,130,930			3,099,829			2,676,385
Loss from operations		(1,509,085	)		(1,085,560	)		(3,027,504	)		(2,527,853	)
Other income (expense)
Loss on settlement		—			(300,000	)		—			(301,500	)
Other income		200,000			—			200,000			—
Interest income		514			57			565			463
Loss on repricing warrants		—			(5,834	)		(70,491	)		(5,834	)
Interest expense		(97,226	)		(19,328	)		(314,054	)		(38,487	)
Total other income (expense)		103,288			(325,105	)		(183,980	)		(345,358	)
Net loss	$	(1,405,797	)	$	(1,410,665	)	$	(3,211,484	)	$	(2,873,211	)
Net loss per common share - basic and diluted	$	(0.05	)	$	(0.06	)	$	(0.12	)	$	(0.13	)
Weighted average shares outstanding - basic and diluted		28,877,700			22,204,124			27,387,133			22,152,375

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 Six Months Ended December 31,
	2012			2011
Cash flows from operating activities
Reconciliation of net loss to net cash used in operating activities:
Net loss	$	(3,211,484	)	$	(2,873,211	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		25,346			25,519
Amortization of debt discounts		274,426			—
Amortization of stock based prepaid consulting		—			42,500
Vesting of restricted stock units		90,000			—
Stock option employee compensation expense		990,559			676,332
Cost of repricing warrants to induce exercise		70,491			5,834
Loss on settlement		—			300,000
Payment by insurance company of prior period accrued litigation expense		(200,000	)		—
Changes in assets and liabilities:
Accounts receivable		11,444			64,958
Inventories		(29,665	)		(178,007	)
Prepaid expenses and other current assets		21,603			17,776
Accounts payable		(32,669	)		(32,734	)
Accrued expenses		(4,542	)		(103,756	)
Net cash used in operating activities		(1,994,491	)		(2,054,789	)
Cash flows from Investing Activities
Purchases of equipment		(3,285	)		(26,922	)
Net cash (used in) investing activities		(3,285	)		(26,922	)
Cash flows from Financing Activities
Proceeds from sale of stock through private placements		128,000			50,000
Proceeds from sale of stock under stock purchase agreement		810,003			—
Proceeds from exercise of warrants		910,000			65,000
Proceeds from exercise of stock options		—			33,335
Payments on related party notes		(59,839	)		89,380
Proceeds from convertible notes with third parties		175,000			—
Proceeds from convertible notes with related parties		250,000			—
Payments on Insurance Finance Contract		(19,033	)		(19,900	)
Net cash provided by financing activities		2,194,131			217,815
Net increase in cash and cash equivalents		196,355			(1,863,896	)
Cash and cash equivalents - beginning		84,194			1,956,976
Cash and cash equivalents - ending	$	280,549		$	93,080
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	296		$	1,050
Cash paid for income taxes	$	—		$	—
Supplementary Disclosure of Non-cash Investing and Financing Activities:
Financing of prepaid insurance contracts	$	47,471		$	43,931
Beneficial conversion feature of convertible notes	$	190,280		$	—
Conversion of notes for common stock	$	332,996		$	—

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 AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

NOTE 1 – Organization and Basis of Presentation

Organization

GelTech Solutions, Inc. (“GelTech” or the “Company”) is a Delaware corporation organized in 2006.  GelTech is focused on marketing four products: (1) FireIce®, a water soluble fire retardant used to protect firefighters, structures and wildlands; (2) Soil₂O® 'Dust Control’, an application which is used for dust mitigation in the aggregate, road construction, mining, as well as, other industries that deal with daily dust control issues; (3) Soil₂O®, a product which reduces the use of water and is primarily marketed to golf courses and the agriculture market; and (4) FireIce® Home Defense Unit, a system for applying FireIce® to structures to protect them from wildfires. Additionally, GelTech owns a United States patent for a method to modify weather.

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: WeatherTech Innovations, Inc. and FireIce Gel, Inc. (formerly GelTech Innovations, 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 (”SEC”) 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 interim 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, 2012 filed on September 28, 2012.

Inventories

Inventories as of December 31, 2012 consisted of raw materials and finished goods in the amounts of $158,670 and $417,335, respectively.

Fair Value of Financial Instruments and Fair Value Measurements

We measure our financial assets and liabilities in accordance with ASC 820 "Fair Value Measurements and Disclosures".  For certain of our financial instruments, including cash equivalents, accounts receivable, accounts payable, accrued expenses and line of credit, the carrying amounts approximate fair value due to their short maturities. The carrying amount of our convertible debt approximates the fair value because the interest rate on the convertible note does not vary materially from the market rate for similar debt instruments.

We adopted accounting guidance for fair value measurements of financial assets and liabilities and adopted the same guidance for non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

4

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The Company had no financial or non-financial assets or liabilities measured at fair value and subject to this accounting standard as of December 31, 2012 or June 30, 2012.

Revenue Recognition

Revenue from sales of products is recognized when persuasive evidence of an arrangement exists, products have been shipped to the customer, economic risk of loss has passed to the customer, the price is fixed or determinable, collection is reasonably assured, and any future obligations of the Company are insignificant. Revenue is shown net of returns and allowances.

Products shipped from our third-party fulfillment companies or our Jupiter, Florida location are shipped FOB shipping point.  Normal terms are net 30 or net 60 days depending on the arrangement we have with the customer.  As such, revenue is recognized when product has been shipped from either the third-party fulfillment company or from the Jupiter, Florida location.

The Company follows the guidance of ASC 605-50-25, “Revenue Recognition, Customer Payments.” Accordingly, any incentives received from vendors are recognized as a reduction of the cost of goods sold. Promotional products or samples given to customers or potential customers are recognized as a cost of goods sold. Cash incentives provided to our customers are recognized as a reduction of the related sale price, and, therefore, are a reduction of sales.

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 consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Significant estimates for the three months and six months ended December 31, 2012 include the allowance for doubtful accounts, depreciation and amortization, valuation of inventories, valuation of options and warrants granted for services or settlements, valuation of common stock granted for services or debt conversion, valuation of debt discount related to the beneficial conversion feature of convertible notes, accruals for litigation losses and the valuation of deferred tax assets.

Net Earnings (Loss) per Share

The Company computes net earnings (loss) per share in accordance with 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 December 31, 2012, there were stock appreciation rights to purchase 3,200,000 shares of the Company common stock, options to purchase 6,307,007 shares of the Company’s common stock, warrants to purchase 3,085,258 shares of the Company’s common stock, 800,000 restricted stock units and 2,894,782 shares of the Company’s common stock are reserved for convertible notes which may dilute future earnings per share.

5

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with 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.

Determining Fair Value Under ASC 718-10

The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. 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 Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees.  The risk free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities.

The fair values of stock option grants for the period from July 1, 2012 to December 31, 2012 were estimated using the following assumptions:

Risk free interest rate	0.53% -0.93%
Expected term (in years)	2.5 - 6.5
Dividend yield	––
Volatility of common stock	89.67% - 91.04%
Estimated annual forfeitures	––

New Accounting Pronouncements

Accounting Standards Updates which were not effective until after December 31, 2012 are not expected to have a significant effect on the Company's consolidated financial position or results of operations.

NOTE 2 – Going Concern

These unaudited condensed 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 December 31, 2012, the Company had a working capital deficit, an accumulated deficit and stockholders’ deficit of $1,339,923, $26,011,370 and $2,655,057, respectively, and incurred losses from operations of $3,211,484 for the six months ended December 31, 2012 and used cash from operations of $1,994,491 during the six months ended December 31, 2012.  In addition, the Company has not yet generated revenue sufficient to support ongoing operations. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

In January 2012, the Company signed a purchase agreement with Lincoln Park Capital Fund LLC which provided for the sale of up to an additional $4.9 million worth of common stock of the Company, in addition to the $100,000 purchased upon entering into the agreement. To date the Company has issued 2,336,569 shares of common stock in exchange for $1,420,003 under this agreement and has the ability to sell another $3.6 million under the agreement under certain circumstances.

Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern.  Ultimately, the continuation of the Company as a going concern is dependent upon the ability of the Company to generated sufficient revenue to attain profitable operations. These unaudited condensed consolidated 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.

6

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

NOTE 3 – Convertible and Non-Convertible Note Agreements

On May 29, 2009, the Company entered into a Credit Enhancement and Financing Security Agreement with the Company’s largest principal stockholder. In connection with this agreement the Company executed a Revolving Promissory Note which permitted the Company to borrow up to $2,500,000. Interest, at an annual rate of 5%, was due monthly on the 20th day of each month which commenced on July 20, 2009.  In May 2010, this agreement was extended for an additional one year period.

In February 2011, the Company renegotiated the Line of Credit Agreement with its largest principal stockholder (the Lender). As part of the renegotiation, the Company issued 892,857 shares of the Company’s common stock and five-year warrants to purchase 1,000,000 shares of the Company’s common stock at an exercise price of $1.25 per share in exchange for a $1,000,000 reduction in the principal amount of the Line of Credit. In addition, the remaining principal amount due under the line of credit of $1,497,483 was replaced by a five-year convertible note of the same amount, convertible at $1.12 per share (fair market value on transaction date based upon the quoted trading price) and bearing annual interest of 5%, due on the maturity date of the note (the “2011 Note”). As an inducement for the Lender to enter into the convertible note agreement, the Company granted the Lender five-year warrants to purchase 300,000 shares of the Company’s common stock at an exercise price of $1.75 per share. These warrants were exercised in September 2012 in exchange for $150,000 in connection with the Company’s offer to all warrant holders to exercise warrants at $0.50 per share instead of the exercise price negotiated on the date of the grant.

In December 2011, the Company received short term advances from its Chief Executive Officer, President and Chief Financial Officer in the amounts of $10,000, $29,380 and $50,000, respectively. The advances bear interest rates of 0.7%, 5.0% and 5.0%, respectively. In addition, as further inducement for the advance from the Chief Financial Officer, the Company approved the reduction in the exercise price of 150,000 options granted to the Chief Financial Officer from $1.95 to $0.60 per share. In connection with this repricing, the expense related to the vesting of these options was increased by $15,067 which will be recognized over the remaining service period.  Through December 31, 2012, the Company has made repayments to its President, Chief Executive Officer and Chief Financial Officer on the notes due these individuals in the amounts of $20,000, $9,839 and $35,000, respectively.  As of December 31, 2012, accrued interest related to these notes amounted to $3,318.

On March 9, 2012, the Company received $105,000 from third parties in exchange for six month convertible original issue discount notes in the amount of $107,625. The notes bear an annual interest rate of 5% and are convertible into the Company's common stock at the rate of $0.50 per share. In connection with the issuance of the notes, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $84,562 which will be amortized to interest expense over the life of the notes.  In September 2012, the Company issued new one-year convertible original issue discount notes in the amount of $120,540, bearing annual interest of 12% and convertible at $0.50 per share in exchange for cancellation of the old notes.  This modification was not considered a debt extinguishment. In accordance with ASC 470, the Company will recognize a debt discount related to the change in fair value of the embedded conversion option in the amount of $35,138 which will be amortized to interest expense over the life of the convertible notes. For the six months ended December 31, 2012, the Company has recognized interest expense of $5,301 and $53,668, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.

On March 10, 2012, the Company received $75,000 from a director in exchange for a six month convertible original issue discount note in the amount of $76,875. The note bears an annual interest rate of 5% and is convertible into the Company's common stock at the rate of $0.50 per share. In connection with the issuance of the note, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $63,038 which will be amortized to interest expense over the life of the note. In September 2012, the Company issued a new one-year convertible original issue discount note in the amount of $86,100, bearing annual interest of 12% and convertible at $0.50 per share in exchange for cancellation of the old note.  This modification was not considered a debt extinguishment. In accordance with ASC 470, the Company will recognize a debt discount related to the change in fair value of the embedded conversion option in the amount of $24,971 which will be amortized to interest expense over the life of the convertible note. For the six months ended December 31, 2012, the Company has recognized interest expense of $3,527 and $31,839, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.

7

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

On March 29, 2012, the Company received $250,000 from its  principal stockholder and accrued interest due this stockholder as of February 18, 2012 of $74,874 was paid by including the interest in a new six month convertible original issue discount note in the amount of $332,996. The note bears an annual interest rate of 5% and is convertible into the Company's common stock at the rate of $0.50 per share. In connection with the issuance of the note, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $199,798 and an original issue discount of $8,121 which will be amortized to interest expense over the life of the note.  For the period from July 1, 2012 to September 28, 2012 the Company recognized interest expense of $3,972 and $97,703, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.  On September 28, 2012, the holder elected to convert the note into common stock and was issued 665,992 shares of common stock by the Company.

In August 2012, the Company received $175,000 in exchange for six month convertible original issue discount notes in the amount of $179,375 with two accredited investors. The notes are convertible into common stock at $0.50 per share. The notes bear an annual interest rate of 5% and are convertible into the Company's common stock at the rate of $0.50 per share. In connection with the issuance of the notes, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $106,600 and an original issue discount of $4,375 which will be amortized to interest expense over the life of the notes.  For the six months ended December 31, 2012, the Company has recognized interest expense of $3,475 and $85,368, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.

On December 28, 2012, the Company received $250,000 from its principal stockholder in exchange for a one year convertible original issue discount note in the amount of $275,000 (the “2012 Note”). The note bears an annual interest rate of 10% and is convertible into the Company's common stock at the rate of $0.35 per share. In connection with the issuance of the note, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $23,571 and an original issue discount of $25,000 which will be amortized to interest expense over the life of the note.  For the six months ended December 31, 2012, the Company has recognized interest expense of $412 and $389, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.

NOTE 4 – Stockholders’ Equity

Preferred Stock

The Company has authorized 5,000,000 shares of preferred stock, par value $0.001 per share with such rights, preferences and limitation as may be set from time to time by resolution of the board of directors and the filing of a certificate of designation as required by Delaware General Corporation Law.

Common Stock

The issuances of common stock during the six months ended December 31, 2012 were as follows:

During the six months ended December 31, 2012, the Company has issued 1,333,820 shares of common stock in exchange for $810,003 in connection with the Purchase Agreement with Lincoln Park Capital.

In August 2012, the Company issued 256,000 shares of common stock in exchange for $128,000 in connection with private placement transactions with two accredited investors.

In September 2012, the Company issued 1,740,000 shares of common stock in exchange for $870,000 in connection with the exercise of 1,640,000 warrants and 100,000 options to purchase shares of the Company’s common stock related to an offer by the Company to reduce the exercise price to $0.50 per share. The original exercise prices of the warrants and options ranged from $1.25 to $1.75 per share. The cost of repricing warrants recognized by the Company amounted to $70,491 for the three months ended September 30, 2012. The cost represents the incremental increase in the fair value of the repriced warrants and options as compared to the original warrants and options granted, valued on the exercise date. The fair value of the warrants and options was determined using the Black-Scholes option pricing model.  In October 2012, the Company issued 80,000 shares of common in exchange for $40,000 in connection with the exercise of warrants at $0.50 per share.

8

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

In September 2012, our principal shareholder converted his $322,996 convertible original issue discount note which was due on September 28, 2012 into 665,992 shares of common stock.

Options and Stock Appreciation Rights to Purchase Common Stock

Stock-based compensation expense recognized under ASC 718-10 for the period July 1, 2012 to December 31, 2012 was $990,559 for stock options and stock appreciation rights granted to employees, directors and a consultant.  This expense is included in selling, general and administrative expenses in the unaudited condensed 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 December 31, 2012, the total compensation cost for stock options and stock appreciation rights not yet recognized was approximately $1,734, 037.  This cost will be recognized over the remaining vesting term of the options and stock appreciation rights of approximately three years.

Restricted Stock Units

The Company recognized stock-based compensation expense of $90,000 related to vested restricted stock units granted to the Company’s Executive Chairman.  Stock based compensation expense not yet recognized related to restricted stock units amounted to $270,000 at December 31, 2012.  This cost will be recognized over the remaining vesting term of the restricted stock units of approximately three years.

A summary of transactions for all employee stock options and stock appreciation rights for the six month periods ended December 31, 2012 and 2011 is as follows:

Employee Options and Stock Appreciation Rights

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		4,439,507		$	1.12		6.40
Granted		675,000		$	1.06		—
Exercised		—		$	—		—
Forfeited		—		$	—
Expired		(525,000	)	$	1.00		—
Outstanding at December 31, 2011		4,589,507		$	1.08		5.94	$	—
Exercisable at December 31, 2011		2,355,508		$	1.03		5.61	$	—
Weighted average fair value of options granted during the six months ended December 31, 2011				$	0.61
Balance at June 30, 2012		4,589,507		$	1.04		5.95
Granted		4,135,000		$	0.50		9.60
Exercised		—		$	—		—
Forfeited		(750,000	)	$	1.25		—
Expired		—		$	—
Outstanding at December 31, 2012		7,974,507		$	0.77		6.93	$	—
Exercisable at December 31, 2012		4,500,257		$	0.89		5.90	$	—
Weighted average fair value of options granted during the six months ended December 31, 2012				$	0.37

9

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

On September 1, 2011, ten-year options to purchase 150,000 shares of common stock at an exercise price of $1.95 share, which were contingently granted by the Company on June 3, 2011, were granted to its Chief Financial Officer, upon his transition from part time consultant to full-time employee. Of the options granted, 50,000 vested immediately and the remaining options vest semi-annually on December 31st and June 30th with the first vesting date being December 31, 2011, subject to continued employment. The options were valued using the Black-Scholes option pricing model using a volatility of 90.6% (derived from the historical market price of 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 2.11%. The value of the options, $224,778, will be recorded as expense over the requisite service period.

On September 20, 2011, the Company granted ten-year options to purchase 175,000 shares of common stock at an exercise price of $0.81 share to each of its three original executive officers. The options vest semi-annually on December 31st and June 30th with the first vesting date being December 31, 2011, subject to continued employment. The options were valued using the Black-Scholes option pricing model using a volatility of 88.89% (derived from the historical market price of 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 1.25%. The value of the options, $320,271, will be recorded as expense over the requisite service period.  These options replaced options to purchase the same number of shares at an exercise price of $1.00 per share which expired on September 15, 2011.

On September 21, 2012, the Company granted options to purchase 70,000 shares of the Company’s common stock at an exercise price of $0.63 per share to the father of the Company’s CEO and CTO in recognition of his service. Of the options granted, 35,000 vest immediately with the remainder vesting semi-annually each December 31 and June 30 over a three year period, subject to continued employment on the vesting date. The Company valued the options at $28,358 using the Black-Scholes option pricing model using a volatility of 90.09%, based upon the historical price of the Company’s common stock since June 2008, an estimated term of 4 years, using the Simplified Method and a discount rate of 0.53%.

On September 21, 2012, the Compensation Committee of the Board of Directors approved the granting of five-year options to purchase 265,000 shares of common stock at an exercise price of $0.60 per share to non-executive employees. The options vest 25% immediately with the remainder vesting annually over three years, subject to continued employment. The Company valued the options at $101,029 using the Black-Scholes option pricing model using a volatility of 89.93%, based upon the historical price of the Company’s common stock since June 2008, an estimated term of 4 years, using the Simplified Method and a discount rate of 0.53%. The resulting expense will be recognized 25% immediately and the remainder over the vesting period.

On November 14, 2012 , the Compensation Committee of the Board of Directors granted its Chief Executive Officer, Chief Financial Officer, Chief Technology Officer and President 800,000 each stock settled stock appreciation rights (“SARS”) of which (i) 200,000 vested immediately, (ii) 200,000 vest upon the Company generating $3,000,000 in revenue in any 12-month period, (iii) another 200,000 vest upon the Company generating $5,000,000 in revenue in any 12-month period and (iv) another 200,000 vest upon the Company generating $6,000,000 in revenue in any 12-month period. The SARs are exercisable at $0.45 per share over a 10-year period.  . The Company valued the SARS at $1,086,560 using the Black-Scholes option pricing model using a volatility of 89.67%, based upon the historical price of the Company’s common stock since June 2008, an estimated term of 6.5 years, using the Simplified Method and a discount rate of 0.93%.  The resulting expense will be recognized 25% immediately and the remainder over the vesting period.

The Company’s Chief Executive Officer, President and Chief Technology Officer agreed to cancel the 250,000 stock options granted to each of them in their prior employment agreements.

10

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

A summary of options issued to directors under the 2007 Plan and changes during the period from June 30, 2011 to December 31, 2011 and from June 30, 2012 to December 31, 2012 is as follows:

Options Issued to Directors

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		790,000		$	1.25		7.98
Granted		245,000		$	1.75		10.00
Exercised		(35,000	)	$	0.95		—
Forfeited		(142,500	)	$	1.46		—
Expired		—		$	—		—
Outstanding at December 31, 2011		857,500		$	1.37		8.06	$	—
Exercisable at December 31, 2011		525,500		$	1.24		7.33	$	—
Weighted average fair value of options granted during the six months ended December 31, 2011				$	1.34
Balance at June 30, 2012		857,500		$	1.36		7.96
Granted		235,000		$	0.90		10.00
Exercised		—		$	—		—
Forfeited		—		$	—		—
Expired		—		$	—		—
Outstanding at December 31, 2012		1,092,500		$	1.26		7.90	$	—
Exercisable at December 31, 2012		756,831		$	1.38		7.37	$	—
Weighted average fair value of options granted during the six months ended December 31, 2012				$	0.65

On July 1, 2011, the Company granted options to purchase 245,000 shares of the Company’s common stock to directors of the Company. The options have an exercise price of $1.75 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 89.65% (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 2.35%. The value of the options, $311,001, will be recognized over the vesting term, one year.

On September 28, 2011, in connection with the resignation of a director, options to purchase 142,500 shares of common stock at a weighted average exercise price of $1.46 per share were forfeited.

On July 1, 2012, the Company issued options to purchase 230,000 shares of common stock to directors. The options have an exercise price of $0.91 per share, vest on June 30, 2013¸ subject to continuing service as a director and bear a ten year term. The options were valued using the Black-Scholes model using a volatility of 91.04% (derived using the historical market price for the Company’s common stock since it began trading in June 2008), an expected term of 5.5 years (using the simplified method) and a discount rate of 0.82%. The value of these options will be recognized as expense over the requisite service period.

On December 6, 2012, the Company issued options to purchase 5,000 shares of common stock to a director upon his appointment to the audit committee. The options have an exercise price of $0.36 per share, and vest over three years, subject to continued service and bear a ten year term. The options were valued using the Black-Scholes model using a volatility of 89.86% (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 0.90%. The value of these options, $1,360, will be recognized as expense over the requisite service period.

11

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

A summary of options issued to non-employees under the 2007 Plan and changes during the six month periods from June 30, 2011 to December 31, 2011 and from June 30, 2012 to December 31, 2012 is as follows:

Non-Employee, Non-Director Options

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		540,000		$	1.16		3.14
Granted		—		$	—		—
Exercised		—		$	—
Forfeited		—		$	—		—
Expired		—		$	—		—
Outstanding at December 31, 2011		540,000		$	1.16		2.64	$	—
Exercisable at December 31, 2011		540,000		$	1.16		2.64	$	—
Weighted average fair value of options granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		540,000		$	1.16		3.14
Granted		—		$	—		—
Exercised		(100,000	)	$	0.50		—
Forfeited		—		$	—		—
Expired		—		$	—		—
Outstanding at December 31, 2012		440,000		$	1.14		1.77	$	—
Exercisable at December 31, 2012		440,000		$	1.14		1.77	$	—
Weighted average fair value of options granted during the six months ended December 31, 2012					N/A

In September 2012, the Company issued 100,000 shares of common stock in exchange for $50,000 in connection with the exercise of 100,000 options to purchase shares of the Company’s common stock related to an offer by the Company to reduce the exercise price to $0.50 per share. The original exercise price of the options was $1.25 per share. The Company recognized a loss resulting from the reduction of the exercise price of the options exercised in the amount of $391 representing the difference in the fair market value of the repriced options as compared to the fair market value of the original options on the exercise date. The fair market value of the options was determined using the Black-Scholes options pricing model.

Warrants to Purchase Common Stock

The Company accounts for warrants issued for services in accordance with ASC 505-50-30-2 Equity Based Payments to Non-Employees.  As such, the Company calculates the fair value of the warrants granted using the Black-Scholes option pricing model and records the fair value to either prepaid expense or expense based upon the terms of the underlying contract for services.  In applying the Black-Scholes method, the Company calculates volatility based upon the historical market price of the Company’s common stock, utilizes discount rates obtained from the Federal Reserve Statistical Release for treasury instruments of the same duration and expected term as the contractual term of the warrants.

Warrants issued in connection with the sale of shares of common stock are treated as part of the equity transaction and are recorded in stockholders’ equity or liabilities in accordance with the guidance at ASC 480-10-25.

12

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

A summary of warrants issued for settlements and changes during the periods July 1, 2011 to December 31, 2011 and from July 1, 2012 to December 31, 2012 is as follows:

Warrants Issued as Settlements

	Number of Warrants			Weighted Average Exercise Price		Remaining Contractual Life
Balance at June 30, 2011		474,508		$	1.05		1.91
Granted		—		$	—		—
Exercised		(130,000	)	$	0.50		—
Forfeited		—		$	—		—
Expired		—		$	—		—
Outstanding at December 31, 2011		344,508		$	1.50		1.42
Exercisable at December 31, 2011		344,508		$	1.50		1.42
Weighted average fair value of warrants granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		344,058		$	1.50		0.92
Granted		350,000		$	0.60		5.00
Exercised		—		$	—		—
Forfeited		—		$	—		—
Expired		—		$	—		—
Outstanding at December 31, 2012		694,058		$	0.84		2.58
Exercisable at December 31, 2012		694,058		$	0.84		2.58
Weighted average fair value of warrants granted during the six months ended December 31, 2012				$	0.33

On September 21, 2012, the Board of Directors granted five year warrants to purchase 350,000 shares of the Company’s common stock at an exercise price of $0.63 per share to a director in recognition of his exemplary five years of service to the Company. The warrants vested immediately. The Company valued the warrants at $115,883 using the Black-Scholes option pricing model using a volatility of 90.09%, based upon the historical price of the Company’s common stock since June 2008, an estimated term of 2.5 years, using the Simplified Method and a discount rate of 0.32%.

13

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

A summary of warrants issued for cash and changes during the periods June 30, 2011 to December 31, 2011 and from June 30, 2012 to December 31, 2012 is as follows:

Warrants issued for cash or services

	Number of Warrants			Weighted Average Exercise Price		Remaining Contractual Life
Balance at June 30, 2011		4,651,200		$	1.46		2.68
Granted		—		$	—		—
Exercised		—		$	—		—
Exercise recission		45,000		$	1.25
Forfeited		—		$	—		—
Expired		—		$	—		—
Outstanding at December 31, 2011		4,696,200		$	1.46		2.18
Exercisable at December 31, 2011		4,696,200		$	1.46		2.18
Weighted average fair value of warrants granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		4,481,200		$	1.46		2.46
Granted		50,000		$	0.63		5.00
Exercised		(1,820,000	)	$	0.50		—
Forfeited		—		$	—		—
Expired		(320,000	)	$	1.60		—
Outstanding at December 31, 2012		2,391,200		$	1.42		1.00
Exercisable at December 31, 2012		2,391,200		$	1.42		1.00
Weighted average fair value of warrants granted during the six months ended December 31, 2012				$	0.44

On September 21, 2012, the Board of Directors granted five year warrants to purchase 50,000 shares of the Company’s common stock at an exercise price of $0.63 per share to the Company’s Investor Relations firm in recognition of their performance over the past year. The warrants vested immediately. The Company valued the warrants at $21,787 using the Black-Scholes option pricing model using a volatility of 90.09%, based upon the historical price of the Company’s common stock since June 2008, an estimated term of 5 years, the term of the warrants, and a discount rate of 0.70%.

During the six months ended December 31, 2012, the Company issued 1,820,000 shares of common stock in exchange for $910,000 in connection with the exercise of 1,820,000 warrants to purchase shares of the Company’s common stock related to an offer by the Company to reduce the exercise price to $0.50 per share. The original exercise prices of the warrants ranged from $1.25 to $1.75 per share. The cost of repricing warrants recognized by the Company amounted to $70,491 for the six months ended December 31, 2012.  The cost represents the incremental increase in the fair value of the repriced warrants as compared to the original warrants granted, valued on the exercise date.  The fair value of the warrants was determined using the Black-Scholes option pricing model.

During December 2012, warrants to purchase 320,000 shares of the Company’s common stock at an exercise price of $1.60 per share expired unexercised.

14

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

NOTE 5 – Commitments and Contingencies

The Company leases office and warehouse space located in Jupiter, Florida under a month-to-month lease and leases space in an industrial yard in Irvine, California under a one year lease which commenced in June 2011.

Rent expense for the six months ended December 31, 2012 and 2011 was $53,479 and $67,312, respectively.

In March 2011, the Compensation Committee approved new employment terms for each of the Company’s three executive officers.  The Executives will receive a base salary of $150,000 per year with the Committee having the authority to increase the Executive’s base salary for the succeeding 12-month period with the increase based on profitability, positive cash flow or such other factors as the Committee deems important. 

Effective September 1, 2011, the Compensation Committee approved an Employment Agreement with the Company's Chief Financial Officer (CFO).  The CFO will receive a base salary of $146,000 per year with the Committee having the authority to increase the CFO’s base salary for the succeeding 12-month period with the increase based on profitability, positive cash flow or such other factors as the Committee deems important. In addition, the CFO received options as previously described in Note 4.

On November 14, 2012, the Company approved new employment agreements for the Company’s Chief Executive Officer, President, Chief Technology Officer and Chief Financial Officer. The employment agreements each provide for base salaries of $150,000 and 800,000 stock settled stock appreciation rights (“SARS”) of which (i) 200,000 vested immediately, (ii) 200,000 vest upon the Company generating $3,000,000 in revenue in any 12-month period, (iii) another 200,000 vest upon the Company generating $5,000,000 in revenue in any 12-month period and (iv) another 200,000 vest upon the Company generating $6,000,000 in revenue in any 12-month period. The SARs are exercisable at $0.45 per share over a 10-year period. The Company’s Chief Executive Officer, President and Chief Technology Officer agreed to cancel the 250,000 stock options granted to each of them in their prior employment agreements. These executives’ base salary will increase to: (i) $170,000 upon the Company generating $3,000,000 in revenue in any 12-month period, (ii) $190,000 upon the Company generating $5,000,000 in any 12-month period and (iii) $200,000 upon the Company generating $6,000,000 in any 12-month period.

Additionally, the Company approved an employment agreement for the Company’s Executive Chairman. The Executive Chairman receives a base salary of $200,000 per year and was granted 800,000 restricted stock units vesting on identical terms as the SARs. All of the five senior executives receive a monthly car allowance of $600 per month. The Compensation Committee will also have the discretion to award each of the executives a bonus based upon job performance, revenue growth or any other factors determined by the Compensation Committee. Each of the employment agreements was effective as of October 1, 2012 and is for a four-year term.

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 (which was used in the Company’s business) in the Company’s offices. A jury trial was held for the lawsuit in July 2012. At the conclusion of the trial, the plaintiff was awarded $200,000 under his invasion of privacy and fraudulent misrepresentation claim, $5,000 on the trespass claim, $841,000 on the breach of consulting agreement claim and $200,000 against the Company’s CEO on a claim of civil theft, which by law results in an award of $600,000 for the plaintiff. The Company’s board of directors approved the indemnification of the Company’s CEO for the $600,000. The Company filed a post trial motion for Judgment Notwithstanding Verdict, New Trial and Remittitur, requesting that the judge set aside or reduce the amounts of the jury verdict.

Based upon the verdicts, the Company recorded a litigation accrual of $1,646,000 as of June 30, 2012. In November 2012, the insurance carrier paid the plaintiff $200,000 in settlement of the invasion of privacy and fraudulent misrepresentation awards. As a result, the Company reduced the amounts accrued for these awards resulting in other income of $200,000 for the period ended December 31, 2012. See Note 8.

15

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

NOTE 6 – 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 is a bookkeeper at $1,000 per week,

· The CEO and CTO’s father is a researcher at $1,200 per week, and

· The CEO and CTO’s mother is 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.

The Company has employment arrangements with its executive officers which are described under Note 5.

The Company has entered into a series of credit facilities with its principal stockholder as more fully described in Note 3.  Additionally, the Company was provided a loan of $250,000 in December 2012 by its principal stockholder.  See Note 3.

The Company issued short term notes payable to its President, Chief Executive Officer and Chief Financial Officer as more fully described in Note 3.

In September 2012, the Company granted options to purchase 70,000 shares of the Company’s common stock to the father of the Company’s Chief Executive Officer and Chief Technology Officer as more fully described in Note 4.

In September 2012, the Company granted warrants to purchase 350,000 shares of the Company’s common stock to a director as more fully described in Note 4.

NOTE 7 – 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 December 31, 2012.  As of December 31, 2012, there were no cash equivalent balances held in depository accounts that are not insured.

At December 31, 2012, three customers accounted for 41.7%, 33.4% and 11.9%, respectively, of accounts receivable.

For the six months ended December 31, 2012 four customers accounted for approximately 18.5%, 15.6%, 12.8% and 11.1% of sales.

During the six  months ended December 31, 2012 all sales resulted from two products, FireIce® and Soil₂O™ which made up 87.5% and 12.5%, respectively, of total sales.  Of the FireIce® sales, 84.0% related to sales of FireIce product and 16.0% related to sales of the FireIce Home Defense units.  Of the Soil₂O™ sales, 72.5% related to traditional sales of Soil₂O® and 27.5% related to Soil₂O® Dust Control.

Three vendors accounted for 37.2%, 19.2% and 10.0% of the Company’s approximately $88,000 of raw material and packaging purchases during the six months ended December 31, 2012.

16

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2012 AND 2011

(Unaudited)

NOTE 8 – Subsequent Events

In January 2013, the Company borrowed $250,000 from Michael Reger, its principal shareholder. In connection with this loan, the Company consolidated all of the outstanding notes held by the principal shareholder and issued him a $1,997,483 7.5% note convertible at $0.35 per share due February 18, 2016 (the “2013 Note”) and the principal shareholder cancelled his 2011 Note and the 2012 Note.  The 2013 Note bears an annual interest rate of 7.5% with interest to be paid annually.  In connection with the new note the Company issued 210,226 shares of common stock in payment of accrued interest of $73,579 owed under the 2011 Note and the 2012 Note.  See Note 3 above.

In January 2013, the court ruled on the Company’s post-trial motions in the Hopkins litigation dismissing the $200,000 verdict (which was subject to triple damages) against Mr. Cordani and reducing the $841,000 breach of the consulting agreement award to $500,000.  Previously, the Company’s insurance carrier paid the plaintiff $200,000 which leaves the Company liable for the $5,000 trespass award and the $500,000 breach of consulting agreement award. The Company filed motions seeking a new trial on damages. The Company received a favorable ruling on these motions and has 30 days to elect to accept the reduced award or file for a new trial. The Company intends to file for a new trial.

Effective February 8, 2013, the Company’s President and Director resigned from the Company to pursue other opportunities.  In connection with his separation, the Company agreed to pay the President $150,000 plus COBRA payments over 14 months.  In addition, the Company agreed to issue the former President ten year fully vested options to purchase 112,500 shares of the Company’s common stock at an exercise price of $0.39 per share, subject to a lockup agreement for the option shares and the other shares he currently owns.  In addition, vested options and stock appreciation rights to purchase 1,137,500 shares of the Company’s common stock at exercise prices from $0.45 to $1.22 per share, previously issued to the President, were cancelled.

17

GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

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

GelTech Solutions, Inc. markets four products: (1) FireIce®, a water soluble fire retardant used to protect firefighters, structures and wildlands; (2) Soil₂O® ‘Dust Control’, our new application which is used for dust mitigation in the aggregate, road construction, mining, as well as, other industries that deal with daily dust control issues (3) Soil₂O®, a product which reduces the use of water and is primarily marketed to golf courses, commercial landscapers and the agriculture market; and (4) FireIce® Home Defense Unit, a system for applying FireIce® to structures to protect them from wildfires.  Our financial statements have been prepared on a going concern basis, and we need to generate sufficient material revenues to support the ongoing business of the Company.

FireIce® has been included on the United States Forest Service (the "Forest Service") Qualified Products List (the “QPL List”) since March 2011.  Inclusion on the QPL List qualifies our product for use to fight brush and wildfires on State and National Park lands.  In May 2012, the Company received four blanket purchase agreements from the Forest Service which provide the framework for federal and state agencies to use FirecIce® from the air and on the ground to fight wildland fires.  To date, we have we have been deployed aerially by the Bureau of Indian Affairs on a few wildfires in New Mexico and have been used on a very limited basis by the Forest Service to fight fires aerially in Washington.

FireIce® has many applications in the municipal and urban firefighting arena.  FireIce® has demonstrated the ability to be much more effective than water in extinguishing car fires.  In addition, we are currently working with municipal departments on other land and marine based municipal applications.

Although sales of our Soil₂O® ‘Dust Control’ and our Soil₂O® agricultural product applications were down during the three months ended December 31, 2012, we continue to believe there are substantial markets for these products given the heightened federal regulations for mitigating airborne particulate matter and in light of the severe drought conditions experienced by many parts of the United States in 2012.

We have found that sales of our FireIce® HDU units are greatest when wildfires are imminent.  The efficacy of the retardant ability of FireIce® was demonstrated in January 2012 when two homes were protected by firefighters from a fast moving grass fire in Montana by applying FireIce® to the homes and surrounding foliage.

International sales of FireIce® and Soil₂O® are expected to continue as our Australian Distributor has been successful in obtaining government approvals of Soil₂O® for use in landscaping applications.  Shipments under our Chinese distribution agreement have been delayed indefinitely pending resolution of the trademark registration of FireIce by the Company’s prior distributor in China or registration of FireGel as a new trademark.  The Company has been advised by its Chinese counsel that any sales of FireIce by the Company or its new distributor in China would be deemed an infringement on the prior distributor’s trademark and therefore no shipments under our new distributor agreement will begin until this is resolved or we register an alternative trademark and receive approval to sell in China using that trademark.  The Company has filed an administrative proceeding in China seeking to cancel a third party’s registration of FireIce, and the resolution of this proceeding may not be resolved until as late as October 2013.  Even if the FireIce registration is cancelled, the Company has been advised that it could take as many as 18 months for the Company to re-register the FireIce trademark.  In December 2012, the Company filed a trademark application for FireGel in China.  We have been advised by legal counsel that the trademark review process generally takes five months.  If the application is accepted, the Company would be allowed to sell FireIce under the FireGel name within 12 months after acceptance.  The Company is working with Chinese counsel and the new distributor to determine the fastest method to begin selling FireIce in China.

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GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

RESULTS OF OPERATIONS

FOR THE SIX MONTHS ENDED DECEMBER 31, 2012 COMPARED TO THE SIX MONTHS ENDED DECEMBER 31, 2011.

Sales

For the six months ended December 31, 2012, we had sales of $121,903 as compared to sales of $262,953 for the six months ended December 31, 2011, a decrease of $141,050 or 53.6%.  Sales of product during the six months ended December 31, 2012 consisted of $15,201 for Soil₂O® and $106,702 for FireIce® and related products. Of the Soil₂O® sales, $4,187 related to the new dust control application and $11,014 related to traditional Soil₂O® applications. FireIce® sales consisted of $89,578 product sales and $17,124 related to sales of HDU related products.  Sales of product during the six months ended December 31, 2011 consisted of $144,878 for Soil2O™ and $118,075 for FireIce® and related products.  Sales of Soil₂O®"Dust Control" were negatively impacted during the three months ended December 31, 2012 by the rainy season in the Southwestern US where we are currently focusing our efforts. We are preparing for a resumption of Soil₂O® Dust Control sales as we move out of the rainy season. FireIce® sales during the six months ended December 31, 2012 were primarily attributable to municipalities and commercial customers.

Cost of Goods Sold

Cost of goods sold was $49,578 for the six months ended December 31, 2012 as compared to a cost of goods sold of $114,421 for the six months ended December 31, 2011. The decrease was the direct result of the decrease in sales.  Cost of sales as a percentage of sales was 40.7% for the six months ended December 31, 2012 as compared to 43.5% for the six months ended December 31, 2011. We expect future cost of sales as a percentage of sales will be consistent with the cost of sales percentage for the six months ended December 31, 2012.

Selling, General and Administrative Expenses

Selling, General and Administrative expenses were $3,076,098 for the six months ended December 31, 2012 as compared to $2,626,410 for the six months ended December 31, 2011. The increase in fiscal 2013 expenses resulted from (1) an increase in salaries and employee benefits of $28,254 related to the employment  a full time CFO during the six month period in fiscal 2013 versus a four month period in fiscal 2012 as well as the new employment of our Executive Chairman effective October 1, 2012; (2) an increase in non-cash stock option expense of $404,227 related to option, stock appreciation rights and restricted stock unit grants to executive officers and directors in fiscal 2013; and (3) an increase in professional fees of $133,051 related to ongoing litigation with a former employee and a former distributor.  These increases were partially offset by decreases in investor relations expense of $64,072 and sales and marketing expense of 35,999.

Research and Development Expenses

R&D expenses were $23,731 for the six months ended December 31, 2012 as compared to $49,975 for the six months ended December 31, 2011. The fiscal 2012 expenses relate to research of potential product enhancements for FireIce® and additional testing of our Soil₂O®"Dust Control" product.

Loss from Operations

Loss from operations was $3,027,504 for the six months ended December 31, 2012 as compared to $2,527,853 for the six months ended December 31, 2011. The decrease in the loss resulted from the lower gross profit resulting from the decrease in sales which were partially offset by the higher operating expenses as described above.

Interest Income

Interest income was $565 for the six months ended December 31, 2012 as compared to $463 for the six months ended December 31, 2011. The amounts are reflective of the cash balances on hand and the prevailing interest rates during the respective six month periods.

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GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

Loss on Settlement

Loss on settlement of $301,500 during the six months ended December 31, 2011 resulted from the issuance of 441,176 shares of the Company's common stock to a director in settlement of amounts due the director by the Company's predecessor company plus a payment of $1,500 to a former shareholder of the predecessor company.

Reduction of Accrual for Losses from Litigation

In November 2012, the Company recognized other income of $200,000 resulting from the reduction of the accrual for losses from litigation related to a lawsuit filed by a former employee.  The reduction was recorded to reflect insurance payments made to the plaintiff in settlement of the invasion of privacy and fraudulent misrepresentation awards.

Cost of Repricing of Warrants to Induce Exercise

The Company recognized a cost of repricing warrants of $70,491 for the six months ended December 31, 2012 related to the reduction of the exercise price of warrants to purchase 1,820,000 shares of common stock with exercise prices from $1.25 to $1.75 per share to $0.50 per share.   The Company recognized a cost of repricing warrants of $5,834 for the six months ended December 31, 2011 related to the reduction of the exercise price of warrants to purchase 130,000 shares of common stock with an exercise price of $1.50 per share to $0.50 per share.

Interest Expense

Interest expense was $314,054 for the six months ended December 31, 2012 as compared to $38,487 for the six months ended December 31, 2011. The higher expense during the six months ended December 31, 2012 resulted from the amortization of debt discounts resulting from the beneficial conversion features of convertible debt related to convertible debt financings. Amortization of these costs was $274,426 for the six months ended December 31, 2012.

Net Loss

Net loss was $3,211,484 for the six months ended December 31, 2012 as compared to $2,873,211 for the six months ended December 31, 2011. The lower net loss resulted primarily from the reversal of accrual for losses from litigation which were partially offset by higher operating expenses, higher interest expense and lower gross profit.  Net loss per common share was $0.12 for the six months ended December 31, 2012 as compared to $0.13 for the six months ended December 31, 2011. The weighted average number of shares outstanding for the six months ended December 31, 2012 and 2011 were 27,387,133 and 22,152,375, respectively.

FOR THE THREE MONTHS ENDED DECEMBER 31, 2012 COMPARED TO THE THREE MONTHS ENDED DECEMBER 31, 2011.

Sales

For the three months ended December 31, 2012, we had sales of $37,453 as compared to sale of $84,551 for the three months ended December 31, 2011, a decrease of $47,098 or 55.74%. Sales of product during the three months ended December 31, 2012 consisted of $4,634 for Soil₂O® and $32,729 for FireIce® and related products. Of the Soil₂O® sales, $4,187 related to the new dust control application and $447 related to traditional Soil₂O® applications.  FireIce® sales consisted of $32,323 product sales and $406 related to sales of HDU related products.  Sales of product during the three months ended December 31, 2011 consisted of $5,593 for Soil2O™ and $78,958 for FireIce® and related products.  Sales of Soil₂O® "Dust Control" are negatively affected during the rainy season in the Southwestern US where we are currently focusing our efforts. We are preparing for a resumption of Soil₂O® Dust Control sales as we move out of the rainy season.  The higher FireIce® sales for the three months ended December 31, 2011 were primarily attributable to the initial sales to our Australian distributor.

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GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

Cost of Goods Sold

Cost of goods sold was $13,499 for the three months ended December 31, 2012 as compared to a cost of goods sold of $39,181 for the three months ended December 31, 2011. The decrease was the direct result of the decrease in sales. Cost of sales as a percentage of sales was 36% for the three months ended December 31, 2012 as compared to 46% for the three months ended December 31, 2011. The lower cost of sales percentage in fiscal 2012 relates to the sales mix. During the three months ended December 31, 2011 the Company sold a greater number of FireIce® HDU units which have a lower gross margin. We expect future cost of sales as a percentage of sales will be consistent with the fiscal year to date cost of sales percentage for the six months ended December 31, 2012.

Selling, General and Administrative Expenses

Selling, General and Administrative expenses were $1,526,616 for the three months ended December 31, 2012 as compared to $1,123,204 for the three months ended December 31, 2011. The increase in fiscal 2013 expenses resulted from (1) an increase in non-cash expenses of $263,608 related to option, stock appreciation rights and restricted stock unit grants to directors and executive officers in fiscal 2013; (2) an increase in professional fees of $164,829 due to ongoing litigation with a former employee and a former distributor; (3) an increase in salaries and employee benefits of $63,355 resulting from the hiring of a new executive chairman; and (4) an increase in sales and marketing due to a new focus on search engine optimization to increase internet traffic to our website.  These increases were partially offset by decreases in investor relations and facilities costs of $46,060 and $13,785, respectively.

Research and Development Expenses

R&D expenses were $6,423 for the three months ended December 31, 2012 as compared to $7,726 for the three months ended December 31, 2011. The fiscal 2013 expenses relate to research of potential product enhancements for FireIce®.

Loss from Operations

Loss from operations was $1,509,085 for the three months ended December 31, 2012 as compared to $1,085,560 for the three months ended December 31, 2011. The increase in the loss resulted from the higher operating expenses plus the lower gross profit resulting from the reduction in sales.

Interest Income

Interest income was $514 for the three months ended December 31, 2012 as compared to $57 for the three months ended December 31, 2011. The amounts are reflective of the cash balances on hand and the prevailing interest rates during the respective three month periods.

Reduction of Accrual for Losses from Litigation

In November 2012, the Company recognized other income of $200,000 resulting from the reduction of the accrual for losses from litigation related to a lawsuit filed by a former employee.  The reduction was recorded to reflect insurance payments made to the plaintiff in settlement of the invasion of privacy and fraudulent misrepresentation awards.

Loss on Settlement

Loss on settlement of $300,000 during the three months ended December 31, 2011 resulted from the issuance of 441,176 shares of the Company's common stock to a director in settlement of amounts due the director by the Company's predecessor company.

Cost of Repricing of Warrants to Induce Exercise

The Company recognized a cost of repricing warrants of $5,834 for the three months ended December 31, 2011 related to the reduction of the exercise price of warrants to purchase 130,000 shares of common stock with an exercise price of $1.50 per share to $0.50 per share.

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GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

Interest Expense

Interest expense was $97,226 for the three months ended December 31, 2012 as compared to $19,328 for the three months ended December 31, 2011. The higher expense during the three months ended December 31, 2012 resulted from the amortization of debt discounts resulting from the beneficial conversion features of convertible debt related to convertible debt financings. Amortization of these costs was $77,629 for the three months ended December 31, 2012.

Net Loss

Net loss was $1,405,797 for the three months ended December 31, 2012 as compared to $1,410,665 for the three months ended December 31, 2011. The lower net loss resulted primarily from the reversal of accrual for losses from litigation which were partially offset by the higher operating expenses, higher interest expense and the lower gross profit. Net loss per common share was $0.05 for the three months ended December 31, 2012 as compared to $0.06 for the three months ended December 31, 2011. The weighted average number of shares outstanding for the three months ended December 31, 2012 and 2011 were 28,877,700 and 22,204,124, respectively.

LIQUIDITY AND CAPITAL RESOURCES

For the six months ended December 31, 2012, the Company used net cash of $1,994,491 in operating activities as compared to net cash used in operating activities of $2,054,789 for the six months ended December 31, 2011.  Net cash used during the six months ended December 31, 2012 resulted primarily from the net loss of $3,211,484, recognition of the reversal of losses from litigation of $200,000, a decrease in accrued expenses of $4,542, a decrease in accounts payable of $32,669 and an increase in inventory of $29,665 which were partially offset by non-cash stock based compensation of $990,559, amortization of convertible note discounts of $274,426, vesting of restricted stock units of $90,0000, loss on repricing of warrants of $70,491  and depreciation of $25,346. Net cash used during the six months ended December 31, 2011 resulted primarily from the net loss of $2,873,211, a decrease in accrued expenses of $103,756, a decrease in accounts payable of $32,734 and an increase in inventory of $178,007 which were partially offset by non-cash stock based compensation of $676,332, non-cash amortization of stock based prepaid consulting of $42,500, non-cash stock issued for settlement of $300,000 and depreciation of $25,519.

Cash flows used in investing activities for the six months ended December 31, 2012 amounted to $3,285 as compared to $26,922 for the six months ended December 31, 2011. The cash flows used in investing activity for the six months ended December 31, 2012 related to purchases of computer equipment for the corporate office. The cash flows used in investing activity for the six months ended December 31, 2011 related to purchases of equipment used with our mobile mixing truck and additional computer and office equipment for the corporate office.

Cash flows from financing activities for the six months ended December 31, 2012 were $2,194,131 as compared to $217,815 for the six months ended December 31, 2011.  During the six months ended December 31, 2012, the Company received $910,000 from the exercise of options to purchase 1,820,000 shares of common stock at an exercise price of $0.50 per share, $128,000 from two accredited investors in exchange for 156,000 shares of common stock in connection with a private placement, $810,003 in exchange for 1,333,820 shares of common stock in connection with the stock purchase agreement with Lincoln Park Capital Fund LLC (“LPC”), $175,000 in exchange for six-month convertible notes with two accredited investors and $250,000 from the Company’s principal stockholder in exchange for a one year convertible original issue discount note.  The amounts received were used to make repayments on notes payable to related parties of $59,839 and to make payments on insurance premium finance contracts of $19,033. During the six months ended December 31, 2011, the Company received $50,000 proceeds from the sale of common stock, $33,335 from the exercise of options to purchase 35,000 shares of common stock at exercise prices from $0.667 to $1.00 per share by a director, $65,000 from the exercise of 130,000 warrants at $0.50 per share and $89,380 in loan proceeds from related parties and used those funds to repay $19,900 of insurance premium financing.

As of the filing date of this report, we have $152,500 in available cash. Although we do not anticipate the need to purchase any additional material capital assets in order to carry out our business, it may be necessary for us to purchase additional mobile mixing trucks and support vehicles in the future, depending on demand. As previously disclosed, in January 2012, the Company signed a $5 million purchase agreement with LPC and filed registration statement related to the transaction covering the shares that may be issued to LPC under the purchase agreement. Provided that the registration statement is current, the Company has the right, in its sole discretion, over a 30-month period to sell shares of common stock to LPC in amounts between $30,000 and $500,000 per sale, depending on certain conditions as set forth in the purchase

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GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

agreement, up to $4.9 million. To date, the Company has issued 2,336,569 shares of common stock in exchange for $1,420,003 under the purchase agreement and has the ability to sell another $3.6 million under the purchase agreement.  The price at which the Company may sell shares to LPC is subject to a floor of $0.35 per share.  The Company believes the LPC purchase agreement could provide the Company with a sufficient amount of working capital for the next 12 months; however the Company must file an amendment to its registration statement and update it before it can sell any common stock.  The Company has continued to meet with additional potential investors to explore other financing alternatives.

In September and October 2012, the Company issued 1,820,000 shares of common stock in exchange for $910,000 in connection with the exercise of 1,820,000 warrants (including 1,200,000 warrants held by our principal shareholder) related to an offer by the Company to reduce the exercise prices of the warrants to $0.50 per share. Additionally, in September 2012, our principal shareholder converted his $322,996 convertible original issue discount note which was due on September 28, 2012 into 665,992 shares of common stock.

In December 2012, in consideration for a $250,000 loan, the Company issued its principal shareholder a $275,000 one-year 10% original issue discount note convertible at $0.35 per share (the “2012 Note”).  The 2012 Note was amended to: (i) reduce the interest to 7.5% and (ii) extend the due date to December 31, 2016.  In February 2013, the Company borrowed $250,000 from its principal shareholder.  In connection with this loan, the Company consolidated all of the outstanding notes held by the principal shareholder and issued him a $1,997,482.95 note convertible at $0.35 per share due December 31, 2016 (the “2013 Note”) and the principal shareholder cancelled his $1.4 million note and the 2012 Note.  The 2013 Note bears an annual interest rate of 7.5% with interest to be paid annually in cash or common stock at $0.35 per share at the principal shareholder’s option.

Ultimately, if the Company is unable to generate substantial cash flows from sales of its products or complete financings, the Company may not be able to remain operational.  As a result of the recent court ruling in the Hopkins’ matter (see page 25, “Item 1. Legal Proceedings), the Company does not have an imminent need for liquidity to fund a bond requirement. However, in the event that Mr. Hopkins is awarded a substantial award in the new trial, the Company may not have the money to secure an appeal bond.  There can be no assurance that we will complete any financing or otherwise be able to meet our working capital needs.

Related Person Transactions

For information on related party transactions and their financial impact, see Note 6 and Note 8 to the Unaudited Condensed Consolidated Financial Statements.

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 processes 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 estimates are 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.

Revenue Recognition

Under ASC 605-15-25 we recognize sales of our products when each of the following has occurred:

- 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.

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GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

Stock-Based Compensation

Under ASC 718-10 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 herein. 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

For information on recent accounting pronouncements, see Note 1 to the Unaudited Condensed Consolidated Financial Statements.

Cautionary Note Regarding Forward-Looking Statements

This report contains forward-looking statements including our liquidity and anticipated capital asset requirements, the substantial markets for our products including Soil₂O® “Dust Control” and expected increase in sales of our products internationally. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects” and similar references to future periods.

Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions.  Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict.  Our actual results may differ materially from those contemplated by the forward-looking statements.  We caution you therefore against relying on any of these forward-looking statements.  They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include global and domestic economic conditions, budgetary pressures facing state and local governments, our failure to receive or the potential delay of anticipated orders for our products, failure to receive acceptance of FireIce® by State and Local governments, failure to resolve our trademark issue in China, and an adverse result in the Hopkin’s litigation.

Further information on our risk factors is contained in our filings with the SEC, including the Form 10-K for the fiscal year ended June 30, 2012.  Any forward-looking statement made by us speaks only as of the date on which it is made.  Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them.  We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

ITEM 3. 

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable to smaller reporting companies

ITEM 4. 

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures.  Our management carried out an evaluation, with the participation of our Principal Executive Officer and Principal Financial Officer, required by Rule 13a-15 of the Securities Exchange Act of 1934 (the “Exchange Act”) of the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act. Based on their evaluation, our management has concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting.  There were no changes in our internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

PART II – OTHER INFORMATION

ITEM 1. 

LEGAL PROCEEDINGS.

As previously disclosed, David Hopkins, a former employee, obtained a jury verdict in July 2012 against the Company for $1,046,000 and against Mr. Michael Cordani, the Company’s Chief Executive Officer, for $200,000.  In January, 2013 the court ruled on the defendant’s post-trial motions dismissing the $200,000 claim against Mr. Cordani and reducing the $841,000 verdict to $500,000.  In November 2012, the Company’s insurance carrier paid the plaintiff $200,000 which leaves the Company liable for the $5,000 trespass award and the $500,000 breach of consulting agreement award. The Company has filed another post trial motion seeking a new trial on damages relating to the $500,000 verdict.  The Company’s motion for a new trial on damages was granted in February 2013.

ITEM 1A.

RISK FACTORS.

Not applicable to smaller reporting companies.

ITEM 2. 

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

In addition to those unregistered securities previously disclosed in reports filed with the Securities and Exchange Commission, or the SEC, we have sold securities without registration under the Securities Act of 1933, or the Securities Act, as described below.

Name or Class of Investor	Date of Sale	No. of Securities	Reason for Issuance
Lender (1)	12/28/12	$275,000 one year note convertible at $0.35 per share	In consideration for $250,000 loan by the Company’s Principal Stockholder
Warrant and Option Holders (1)	10/3/12	80,000 shares of common stock	Exercise of warrants and options at $0.50 per share for $40,000

————————

(1) Exempt under Section 4(a)(2) of the Securities Act and Regulation 506 thereunder. The securities were issued to accredited investors and there was no general solicitation.

ITEM 3. 

DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4. 

MINE SAFETY DISCLOSURES.

Not Applicable

ITEM 5. 

OTHER INFORMATION.

On February 8, 2013, Joseph Ingarra resigned as a director and President of the Company in order to pursue other interests.  In connection with his resignation, the Company agreed to pay Mr. Ingarra 12 months of severance at the same rate as his current base salary, or $150,000, (plus COBRA reimbursement) payable in accordance with the Company’s standard payroll practices with the first 10 months paid each month and the last two months paid once a month (in one-half of the monthly rate installments) for four months.  The severance was in lieu of the approximately 45 months due under his Employment Agreement under certain circumstances.  Additionally, the Company granted Mr. Ingarra 112,500 fully-vested stock options exercisable at $0.39 per share, subject to a lockup agreement for the option shares and the other shares he currently owns.  All other stock options and stock appreciation rights previously granted to Mr. Ingarra have been cancelled.

ITEM 6. 

EXHIBITS.

The exhibits listed in the accompanying “Index to Exhibits” are filed or incorporated by reference as part of this Form 10-Q.

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GELTECH SOLUTIONS, INC. AND SUBSIDIARIES

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 11, 2013	/s/ Michael Cordani
	Michael Cordani
	Chief Executive Officer (Principal Executive Officer)
February 11, 2013	/s/ Michael Hull
	Michael Hull
	Chief Financial Officer (Principal Financial Officer)

26

INDEX TO EXHIBITS

		Incorporated by Reference			Filed or Furnished
No.	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	Amendment No. 1 to the Amended and Restated Bylaws	10-K	9/28/10	3.3
3.4	Amendment No. 2 to the Amended and Restated Bylaws	8-K	9/26/11	3.1
3.5	Amendment No. 3 to the Amended and Restated Bylaws	8-K	9/27/12	3.1
10.1	Reduced Warrant Exercise Price Offer	10-Q	11/2/12	10.1
10.2	Reger Note dated December 27, 2012				Filed
10.3	Reger Note dated February 1, 2013				Filed
10.4	Form of Executive Employment Agreement dated as of October 1, 2012+				Filed
10.5	Jerome Eisenberg Employment Agreement dated as of October 1, 2012+				Filed
10.6	Form of Restricted Stock Unit Agreement+				Filed
10.7	Form of Stock Appreciation Rights Agreement+				Filed
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*
101 INS	XBRL Instance Document				Furnished**
101 SCH	XBRL Taxonomy Extension Schema				Furnished**
101 CAL	XBRL Taxonomy Extension Calculation Linkbase				Furnished**
101 LAB	XBRL Taxonomy Extension Label Linkbase				Furnished**
101 PRE	XBRL Taxonomy Extension Presentation Linkbase				Furnished**
101 DEF	XBRL Taxonomy Extension Definition Linkbase				Furnished**

———————

+	Management compensatory agreement.
*	This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

** Attached as Exhibit 101 to this report are the Company’s financial statements for the quarter ended December 31, 2012 formatted in XBRL (eXtensible Business Reporting Language). The XBRL-related information in Exhibit 101 to this report shall not be deemed “filed” or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act, and is not filed for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of those sections.

Copies of this report (including the financial statements) and any of the exhibits referred to above will be furnished at no cost to our shareholders who make a written request to GelTech Solutions, Inc., 1460 Park Lane South, Suite 1, Jupiter, Florida 33458, Attention: Darlene Cordani.

EX-10.2

EXHIBIT 10.2

THE SHARES ISSUABLE UPON CONVERSION OF THIS CONVERTIBLE NOTE AND THE CONVERTIBLE NOTE HAVE NOT BEEN REGISTERED UNDER FEDERAL OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH LAWS AS MAY BE APPLICABLE OR, AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT AN EXEMPTION FROM SUCH APPLICABLE LAWS EXIST.

CONVERTIBLE NOTE

$275,000.00 December 27, 2012

FOR VALUE RECEIVED, GelTech Solutions, Inc., a Delaware corporation, (the “Company”) hereby promises to pay to the order of Michael Reger (the “Holder”), at 777 Yamato Road, Suite 3, Boca Raton, Florida 33431, or at such other office as the Holder designates in writing to the Company, the sum of Two Hundred Seventy Five Thousand ($275,000.00), which amount includes interest at the rate of 10.0%, one year from the date of this Note (the “Maturity Date”), unless this Note is converted into Common Stock (as hereinafter defined) of the Company pursuant to Section 1 hereof.  While in default, this Note shall bear interest at the rate of 12% per annum or such maximum rate of interest allowable under the laws of the State of Florida. Payments shall be made in lawful money of the United States.

1.

Conversion to Common Stock.  

The Holder shall have the right to convert this Note, in whole or in part, into shares of common stock of the Company (“Common Stock”) at the rate of $0.35 per share as adjusted (the “Conversion Price”) at any time, subject to prior prepayment; provided, however, that prior to maturity the Holder may only make two elections to convert this Note in part, one at any time and one during the period commencing on the receipt of a notice from the Company under Section 2(c) regarding the termination of the right to convert this Note in connection with a Liquidation Event (as defined in Section 2(c)) and ending on the date on which the conversion right terminates under Section 2(c).

(c)

Conversion Formula.  The number of shares of Common Stock issuable upon a conversion of this Note shall be determined by dividing (i) the full principal amount of this Note, which includes all interest that will be accrued as of the conversion date, including default interest if converted after the Maturity Date,  (or the portion thereof to be converted in the event of a partial conversion), less any principal or interest that has been prepaid as of the date of conversion, by (ii) the Conversion Price.

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2.

Anti-Dilution Protection.  

(a)

In the event, prior to the payment of this Note, the Company shall (i) issue any of its shares of Common Stock as a stock dividend on shares of Common Stock, (ii) subdivide the number of outstanding shares of Common Stock into a greater number of shares or (iii) reduce the number of outstanding shares of Common Stock by combining such shares into a smaller number of shares, then, in such event, the Conversion Price shall be adjusted to equal the product of (A) the total number of shares of Common Stock outstanding immediately prior to such event multiplied by the Conversion Price in effect immediately prior to such event, divided by (B) the total number of shares of Common Stock outstanding immediately after such event.

(b)

In the event, prior to the payment of this Note, the Company shall be recapitalized by reclassifying its outstanding Common Stock (other than into shares of Common Stock with a different par value, or by changing its outstanding shares of Common Stock to shares without par value), or in the event the Company or a successor corporation, partnership, limited liability company or other entity (any of which is defined as a “Corporation”) shall consolidate or merge with or convey all or substantially all of its, or of any successor Corporation’s property and assets to any other Corporation or Corporations (any such other Corporation being included within the meaning of the term “successor Corporation” used in the context of any consolidation or merger of any other Corporation with, or the sale of all or substantially all of the property of any such other Corporation to, another Corporation or Corporations), or in the event of any other material change in the capital structure of the Company or of any successor Corporation by reason of any reclassification, reorganization, recapitalization, consolidation, merger, conveyance or otherwise, then, as a condition of any such reclassification, reorganization, recapitalization, consolidation, merger or conveyance, a prompt, proportionate, equitable, lawful and adequate provision shall be made whereby the Holder of this Note shall thereafter have the right to purchase, upon the basis and the terms and conditions specified in this Note, in lieu of the securities of the Company theretofore purchasable upon the conversion of this Note, such shares, securities or assets as may be issued or payable with respect to or in exchange for the number of securities of the Company theretofore obtainable upon conversion of this Note as provided above had such reclassification, reorganization, recapitalization, consolidation, merger or conveyance not taken place; and in any such event, the rights of the Holder of this Note to any adjustment in the number of shares of Common Stock obtainable upon conversion of this Note, as provided, shall continue and be preserved in respect of any shares, securities or assets which the Holder becomes entitled to obtain.  Notwithstanding anything herein to the contrary, this Section 2 shall not apply to a merger with a subsidiary provided the Company is the continuing Corporation and provided further such merger does not result in any reclassification, capital reorganization or other change of the securities issuable under this Note.  The foregoing provisions of this Section 2(b) shall apply to successive reclassification, capital reorganizations and changes of securities and to successive consolidation, mergers, sales or conveyances.

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(c)

In the event the Company, at any time while this Note shall remain outstanding, shall sell all or substantially all of its assets, dissolve, liquidate, or wind up its affairs (each a “Liquidation Event”), a prompt, proportionate, equitable, lawful and adequate provision shall be made as part of the terms of any such Liquidation Event such that the Holder of this Note may thereafter receive, upon exercise hereof, in lieu of the securities of the Company which it would have been entitled to receive, the same kind and amount of any shares, securities or assets as may be issuable, distributable or payable upon any such Liquidation Event with respect to each share of Common Stock of the Company.  Notwithstanding the preceding, in the event of any  Liquidation Event, the right to convert this Note shall terminate on a date fixed by the Company, such date so fixed to be not earlier than (i) 6:00 p.m., New York time, on the 30th day after the date on which notice of such termination of the right to convert this Note has been given by mail to the Holder of this Note at such Holder’s address as it appears on the books of the Company or (ii) the date that the Company received sufficient approval of the Liquidation Event from its shareholders and/or directors, as required by law, if later; provided, however, that if such Liquidation Event is abandoned prior to its consummation or is not otherwise consummated within 180 days from the date of notice referred to in (i) above, then the conversion right of the Holder shall be reinstated.

3.

Event of Default.   Upon an Event of Default, the entire unpaid balance of this Note then outstanding, together with accrued interest thereon, if any, shall be and become immediately due and payable upon written notice from the Holder. In addition, an event of default of this note creates an event of default of the Convertible Note dated February 18, 2011 in the amount of $1,497482.95.    For purposes of this Note, an “Event of Default” shall consist of any of the following events:

(a)

The Company shall fail to pay any amounts which shall become due and payable to Holder under this Note, whether at the Maturity Date or at any accelerated date of maturity or at any other date fixed for payment.

(b)

The Company shall commence any case, proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to its debts; or a court shall enter an order for relief or any such adjudication or appointment, which case, proceeding or action or order, adjudication, or appointment, as the case may be, remains undismissed, undischarged or unbonded for a period of 30 days, then, or any time thereafter during the continuance of any of such events.

(c)

The Company shall fail to issue the shares of Common Stock issuable upon any conversion of this Note within five days following the conversion date, or to perform in any material respect any of the other material covenants or agreements contained in this Note and not cure, if possible to cure, such failure within 10 business days after notice thereof.

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(d)

Any material representation or warranty of the Company herein shall prove to have been false in any material respect upon the date when made.

(e)

The occurrence of an event of default, subject to any applicable cure period, under the Agreement.

(f)

The occurrence of a Liquidation Event.

(g)

The Company shall fail to timely pay any interest or principal pursuant to any material indebtedness of the Company which results in the acceleration of the maturity of such indebtedness.

4.

Prepayment.  

(a)

This Note may be prepaid in whole or in part at any time for cash on 15 business days’ prior written notice, subject to the right of holder of the Note to convert into shares of Common Stock of the Company prior to any prepayment.  The Company shall honor any Conversion Notice (as defined in Section 5) delivered by the Holder up to 10 days following the notice of prepayment.  

(b)

All payments made on this Note shall be applied first to any interest accrued to the date of such payment with the remainder applied toward principal.

5.

Mechanics of Conversion.  To convert the Note into Common Stock on any date (a “Conversion Date”), the Holder shall (i) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit 1 (the “Conversion Notice”) to the Company, and (ii) surrender this Note to a common carrier for delivery to the Company as soon as practicable on or following such date (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction).  On or before the second (2^nd) business day following the date of receipt of a Conversion Notice, the Company shall confirm that it has issued to the Holder the number of shares of Common Stock to which the Holder shall be entitled, and shall return to the Holder a new Note with respect to the portion of the original Note which was not converted.  The person or persons entitled to receive the Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such Common Stock on the Conversion Date.

6.

Conversion Shares.

(a)

The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments under Section 2) upon the conversion of the Note. The Company covenants that all shares of Common Stock that shall

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be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable, and free of all taxes, liens and charges created by the Company.

(b)

No fractional shares shall be issued upon a conversion. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall pay the Holder cash equal to the product of such fraction multiplied by the Common Stock’s fair market value at the time of conversion based on the closing price of a share of Common Stock at such time.

(c)

The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder for any documentary stamp or similar taxes or any other expense that may be payable in respect of the issue or delivery of such certificates, all of which taxes and expenses shall be paid by the Company, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

7.

Negative Covenant. As long as any portion of this Note remains outstanding, the Company shall not (i) declare or pay cash dividends or make any distributions of cash or property in respect of any equity securities of the Company, excluding dividends on the Company’s Preferred Stock.

8.

Miscellaneous.

(a)

All makers and endorsers now or hereafter becoming parties hereto jointly and severally waive demand, presentment, notice of non-payment and protest.

(b)

This Note may not be changed or terminated orally, but only with an agreement in writing, signed by the parties against whom enforcement of any waiver, change, modification, or discharge is sought with such agreement being effective and binding only upon attachment hereto.

(c)

This Note and the rights and obligations of the Holder and of the undersigned shall be governed and construed in accordance with the laws of the State of Florida.

(d)

Upon the occurrence of an Event of Default under this Note, the Company shall, upon demand, pay to the Holder the amount of any and all reasonable costs and expenses (including reasonable attorneys’ fees) that Holder may incur in connection with the enforcement or collection of this Note.

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(e)

No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies.

(f)

The Company hereby, to the fullest extent permitted by applicable law, waives presentment, demand, notice (including without limitation notice of default (except as otherwise specifically set forth herein), notice of protest, notice of intention to accelerate maturity, notice of acceleration of maturity and notice of nonpayment or dishonor), protest and all other demands and notices in connection with delivery, acceptance, performance, default, acceleration or enforcement of or under this Note, and the bringing of suit and diligence in taking any action to collect amounts owing hereunder or in proceeding against any of the rights and properties securing payment hereof, and is directly and primarily liable for the amount of all sums owing or to be owing hereon. The Company agrees that its liability on or with respect to this Note shall not be affected by any release of or change in any guaranty or security at any time or by any failure to perfect or maintain perfection of any lien against or security interest in any such security or the partial or complete unenforceability of any guaranty or other surety obligation, in each case in whole or in part, with or without notice and before or after maturity.  No extension of the time for the payment of this Note made by agreement with any person now or hereafter liable for the payment of this Note shall operate to release, discharge, modify, change or affect the original liability of the Company under this Note.

(g)

All notices, offers, acceptance and any other acts under this Note (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar receipted next business day delivery, or by facsimile delivery followed by overnight next business day delivery to the Company at the address  set forth in the Agreement (as it may be changed pursuant to the Agreement) and to the Holder at the address set forth in the Agreement or such other address as the Holder by notice to the Company may designate from time to time.  The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of successful facsimile delivery.  Time shall be counted to, or from, as the case may be, the date of delivery.

IN WITNESS WHEREOF, the Company has caused this Note to be executed as of the date aforesaid.

By:
	Michael R. Hull
	Chief Financial Officer

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EXHIBIT 1

CONVERSION NOTICE

Reference is made to the  Convertible Note (the “Note”) issued to the undersigned by GelTech Solutions, Inc., (the “Company”).  In accordance with and pursuant to the Note, the undersigned hereby elects to convert, in whole or in part (as applicable), the principal and any accrued interest of the Note to which this notice is attached into Common Stock of the Company, as of the date specified below.

Date of Conversion:

Please confirm the following information:

Conversion Price:

Principal and accrued interest to be converted (if partial):

Number of Shares of Common Stock to be issued:

Please issue the Common Stock into which the Note is being converted in the following name and to the following address:

Issue to:

Facsimile Number:

Authorization:

By:

Title:

Dated:

Account Number:

  (if electronic book entry transfer)

Transaction Code Number:

  (if electronic book entry transfer)

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EX-10.3

EXHIBIT 10.3

THE SHARES ISSUABLE UPON CONVERSION OF THIS CONVERTIBLE NOTE AND THE CONVERTIBLE NOTE HAVE NOT BEEN REGISTERED UNDER THE FEDERAL OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR HYPOTHECATED IN ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH LAWS AS MAY BE APPLICABLE OR, AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT AN EXEMPTION FROM SUCH APPLICABLE LAWS EXIST.

FIRST AMENDED AND RESTATED  CONVERTIBLE NOTE

$1,997,482.95	Issuance Date: February 1, 2013
	Maturity Date:  December 31, 2016

FOR VALUE RECEIVED, GelTech Solutions, Inc., a Delaware corporation, (the “Company”) hereby promises to pay to the order of Michael Reger (the “Holder”), at 777 Yamato Road, Suite 3, Boca Raton, Florida 33431, or at such other office as the Holder designates in writing to the Company, the sum of one million nine hundred ninety seven thousand four hundred and eighty two dollars and 95/100 ($1,997,482.95), together with interest thereon computed at the annual rate of seven and one-half percent (7.5%) (the “Interest”).  This First Amended and Restated Convertible Note (the “Note”) replaces in its entirety that certain Convertible Promissory Note executed by the Company dated February 18, 2011 (the “Original Note”) and that certain Convertible Promissory Note dated December 29, 2012 (the “2012 Note”).  Upon execution of this Note by the Company and the issuance of 210,226 shares of Common Stock (defined below) as payment for interest owed under the Original Note and the 2012 Note, the Holder will cancel the Original Note and the 2012 Note and return them to the Company and that certain Interest Payment Agreement dated as of December 27, 2012 between the Company and the Holder shall be void.  

Interest shall be payable annually in arrears on each of the subsequent one year anniversary dates of the Issuance Date until all principal and accrued Interest is paid under this Note.  The Holder shall have the right to convert the Interest under Note, in whole or in part, into shares of the Company’s common stock (“Common Stock”) at the rate of $0.35 per share, as adjusted, by delivering the Company written notice. The Holder’s conversion right under this paragraph shall not be superseded by the Company and is absolute regardless of the timing of payment of accrued Interest by the Company.

Principal and Interest shall be due and payable on the Maturity Date unless this Note has been converted as provided below.  While in default, this Note shall bear interest at the rate of 18% per annum or such maximum rate of interest allowable under the laws of the State of Florida. Payments

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shall be made in lawful money of the United States and the Holder, shall at have at is option, to convert the Default Interest in the Company’s Common Stock by delivering the Company written notice.  

1.

Conversion to Common Stock.  

(a)

The Holder shall have the right to convert this Note, in whole or in part, into shares of Common Stock at the rate of $0.35 per share as adjusted (the “Conversion Price”) at any time, subject to prior prepayment.

(b)

The number of shares of Common Stock issuable upon a conversion of this Note shall be determined by dividing (i) the full principal amount of this Note, which includes all interest that will be accrued as of the conversion date, including default interest if converted after the Maturity Date, (or the portion thereof to be converted in the event of a partial conversion), less any principal or interest that has been prepaid or paid, as applicable, as of the date of conversion, by (ii) the Conversion Price.

(c)

In the event less than all of the remaining balance of this Note is converted, the Company shall promptly issue to the Holder a similar promissory note representing the outstanding balance.

2.

Anti-Dilution Protection.  

(a)

In the event, prior to the payment of this Note, the Company shall (i) issue any of its shares of Common Stock as a stock dividend on shares of Common Stock, (ii) subdivide the number of outstanding shares of Common Stock into a greater number of shares or (iii) reduce the number of outstanding shares of Common Stock by combining such shares into a smaller number of shares, then, in such event, the Conversion Price shall be adjusted to equal the product of (A) the total number of shares of Common Stock outstanding immediately prior to such event multiplied by the Conversion Price in effect immediately prior to such event, divided by (B) the total number of shares of Common Stock outstanding immediately after such event.

(b)

In the event, prior to the payment of this Note, the Company shall be recapitalized by reclassifying its outstanding Common Stock (other than into shares of Common Stock with a different par value, or by changing its outstanding shares of Common Stock to shares without par value), or in the event the Company or a successor corporation, partnership, limited liability company or other entity (any of which is defined as a “Corporation”) shall consolidate or merge with or convey all or substantially all of its, or of any successor Corporation’s property and assets to any other Corporation or Corporations (any such other Corporation being included within the meaning of the term “successor Corporation” used in the context of any consolidation or merger of any other Corporation with, or the sale of all or substantially all of the property of any such other Corporation to, another Corporation or Corporations), or in the event of any other material change in the capital structure of the Company or of any successor Corporation by reason of any reclassification, reorganization, recapitalization, consolidation, merger, conveyance or otherwise, then, as a condition of any such reclassification, reorganization, recapitalization, consolidation,

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merger or conveyance, a prompt, proportionate, equitable, lawful and adequate provision shall be made whereby the Holder of this Note shall thereafter have the right to purchase, upon the basis and the terms and conditions specified in this Note, in lieu of the securities of the Company theretofore purchasable upon the conversion of this Note, such shares, securities or assets as may be issued or payable with respect to or in exchange for the number of securities of the Company theretofore obtainable upon conversion of this Note as provided above had such reclassification, reorganization, recapitalization, consolidation, merger or conveyance not taken place; and in any such event, the rights of the Holder of this Note to any adjustment in the number of shares of Common Stock obtainable upon conversion of this Note, as provided, shall continue and be preserved in respect of any shares, securities or assets which the Holder becomes entitled to obtain.  Notwithstanding anything herein to the contrary, this Section 2 shall not apply to a merger with a subsidiary provided the Company is the continuing Corporation and provided further such merger does not result in any reclassification, capital reorganization or other change of the securities issuable under this Note.  The foregoing provisions of this Section 2(b) shall apply to successive reclassification, capital reorganizations and changes of securities and to successive consolidation, mergers, sales or conveyances.

(c)

In the event the Company, at any time while this Note shall remain outstanding, shall sell all or substantially all of its assets, dissolve, liquidate, or wind up its affairs (each a “Liquidation Event”), a prompt, proportionate, equitable, lawful and adequate provision shall be made as part of the terms of any such Liquidation Event such that the Holder of this Note may thereafter receive, upon exercise hereof, in lieu of the securities of the Company which it would have been entitled to receive, the same kind and amount of any shares, securities or assets as may be issuable, distributable or payable upon any such Liquidation Event with respect to each share of Common Stock of the Company.  Notwithstanding the preceding, in the event of any Liquidation Event, the right to convert this Note shall terminate on a date fixed by the Company, such date so fixed to be not earlier than (i) 6:00 p.m., New York time, on the 30th day after the date on which notice of such termination of the right to convert this Note has been given by mail to the Holder of this Note at such Holder’s address as it appears on the books of the Company or (ii) the date that the Company received sufficient approval of the Liquidation Event from its shareholders and/or directors, as required by law, if later; provided, however, that if such Liquidation Event is abandoned prior to its consummation or is not otherwise consummated within 180 days from the date of notice referred to in (i) above, then the conversion right of the Holder shall be reinstated.

3.

Event of Default.   Upon an Event of Default, the entire unpaid balance of this Note then outstanding, together with accrued interest thereon, if any, shall be and become immediately due and payable upon written notice from the Holder.  For purposes of this Note, an “Event of Default” shall consist of any of the following events:

(a)

The Company fails to pay any installment of principal, interest or other sum due under this Note when due and such failure continues for a period of 30 days after the due date.

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(b)

The Company shall commence any case, proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it as bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to its debts; or a court shall enter an order for relief or any such adjudication or appointment, which case, proceeding or action or order, adjudication, or appointment, as the case may be, remains undismissed, undischarged or unbonded for a period of 30 days, then, or any time thereafter during the continuance of any of such events.

(c)

The Company shall fail to issue the shares of Common Stock issuable upon any conversion of this Note within five days following the conversion date, or to perform in any material respect any of the other material covenants or agreements contained in this Note and not cure, if possible to cure, such failure within 10 business days after notice thereof.

(d)

The delisting of the Company’s Common Stock from any principal market (presently the Over-the-Counter Bulletin Board).  The Company’s failure to comply with the requirements for continued listing on a principal market for a period of 30 consecutive trading days, or notification from the principal market that the Company is not in compliance with the conditions for such continued listing on such principal market.  The Company is subject to a trading suspension on the principal market that lasts for five or more consecutive trading days.   

(e)

The occurrence of a Liquidation Event.

(f)

The Company shall fail to timely pay any interest or principal pursuant to any material indebtedness of the Company which results in the acceleration of the maturity of such indebtedness.

4.

Subordination.

  This Note shall be subordinate to any other debt obligations of the Company to the extent the proceeds of such debt obligations are used primarily for the purchase of inventory and other working capital requirements of the Company.

5.

First Right of Refusal.  Until this Note has been paid in full or fully converted, the Holder shall be given not less than 10 days prior written notice of any proposed sale by the Company of its common stock or other securities convertible into its common stock, except in connection with (i) full or partial consideration in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of the securities or assets of a corporation or other entity, (ii) the Company’s issuance of securities in connection with strategic license or service agreements and other partnering arrangements so long as such issuances are not for the purpose of raising capital, (iii) the Company’s issuance of common stock or the issuances or grants of options to purchase common stock to employees, directors, and consultants, pursuant to the Company’s equity incentive plan or similar individual agreements, (iv) securities upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible into shares of common stock issued and outstanding on the date of this Note, and (v) as a result of the exercise of warrants which are granted or issued pursuant in connection with the execution and delivery of this

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Note.  The Holder shall have the right during the 10 days following receipt of the notice to purchase for cash or by using the outstanding balance of this Note including principal, interest, liquidated damages and any other amount then owing to Holder by the Company, such offered common stock, debt or other securities in accordance with the terms and conditions set forth in the notice of sale.  In the event such terms and conditions are modified during the notice period, the Holder shall be given prompt notice of such modification and shall have the right during the 10 days following the notice of modification to exercise the right to participate in such offering.

6.

Prepayment.  

(a)

This Note may be prepaid in whole or in part at any time for cash on 15 business days’ prior written notice.  The Company shall honor any Conversion Notice (as defined below) delivered by the Holder up to 10 days following the notice of prepayment.  

(b)

All payments made on this Note shall be applied first to any interest accrued to the date of such payment with the remainder applied toward principal.

7.

Mechanics of Conversion.  To convert the Note into Common Stock on any date (a “Conversion Date”), the Holder shall (i) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit 1 (the “Conversion Notice”) to the Company, and (ii) surrender this Note to a common carrier for delivery to the Company as soon as practicable on or following such date (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction).  On or before the second (2^nd) business day following the date of receipt of a Conversion Notice, the Company shall confirm that it has issued to the Holder the number of shares of Common Stock to which the Holder shall be entitled, and shall return to the Holder a new Note with respect to the portion of the original Note which was not converted.  The person or persons entitled to receive the Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such Common Stock on the Conversion Date.

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Conversion Shares.

(a)

The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note not less than such aggregate number of shares of the Common Stock as shall be issuable (taking into account the adjustments under Section 2) upon the conversion of the Note. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable, and free of all taxes, liens and charges created by the Company.

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(b)

No fractional shares shall be issued upon a conversion. In lieu of any fractional share to which the Holder would otherwise be entitled, the Company shall pay the Holder cash equal to the product of such fraction multiplied by the Common Stock’s fair market value at the time of conversion based on the closing price of a share of Common Stock at such time.

(c)

The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder for any documentary stamp or similar taxes or any other expense that may be payable in respect of the issue or delivery of such certificates, all of which taxes and expenses shall be paid by the Company, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

9.

Negative Covenant. As long as any portion of this Note remains outstanding, the Company shall not declare or pay cash dividends or make any distributions of cash or property in respect of any equity securities of the Company, excluding dividends on the Company’s Preferred Stock.

10.

Miscellaneous.

(a)

All makers and endorsers now or hereafter becoming parties hereto jointly and severally waive demand, presentment, notice of non-payment and protest.

(b)

This Note may not be changed or terminated orally, but only with an agreement in writing, signed by the parties against whom enforcement of any waiver, change, modification, or discharge is sought with such agreement being effective and binding only upon attachment hereto.

(c)

This Note and the rights and obligations of the Holder and of the undersigned shall be governed and construed in accordance with the laws of the State of Florida.

(d)

Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state or federal courts of Florida and venue shall be in the County of Palm Beach or the Southern District of Florida.  The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens.

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(e)

In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and expenses (including such fees and costs on appeal).

(f)

Upon any endorsement, assignment, or other transfer of this Note by the Holder or by operation of law, the term “Holder,” as used herein, shall mean such endorsee, assignee, or other transferee or successor to the Holder, then becoming the holder of this Note.  This Note shall inure to the benefit of the Holder and its successors and assigns and shall be binding upon the undersigned and their successors and assigns.  The term “Company” as used herein, shall include the respective successors and assigns of the Company and any other obligor.

(g)

In the event that any interest paid on this Note is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note, and any surplus thereafter shall immediately be refunded to the Company.  

[Signature Page Follows]

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IN WITNESS WHEREOF, the Company has caused this Note to be executed as of the date aforesaid.

By:
	Michael R. Hull
	Chief Financial Officer

8

EXHIBIT 1

CONVERSION NOTICE

Reference is made to the Convertible Note (the “Note”) issued to the undersigned by GelTech Solutions, Inc. (the “Company”).  In accordance with and pursuant to the Note, the undersigned hereby elects to convert, in whole or in part (as applicable), the principal and any accrued interest of the Note to which this notice is attached into Common Stock of the Company, as of the date specified below.

Date of Conversion:

Please confirm the following information:

Conversion Price:

Principal and accrued interest to be converted (if partial):

Number of Shares of Common Stock to be issued:

Please issue the Common Stock into which the Note is being converted in the following name and to the following address:

Issue to:

Facsimile Number:

Authorization:

By:

Title:

Dated:

Account Number:

  (if electronic book entry transfer)

Transaction Code Number:

  (if electronic book entry transfer)

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EX-10.4

Exhibit 10.4

FORM OF EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) entered into as of October 1, 2012, between GelTech Solutions, Inc., a Delaware corporation (the “Company”), and ______ (the “Executive”).

WHEREAS, in its business, the Company has acquired and developed certain trade secrets, including, but not limited to, proprietary processes, sales methods and techniques, and other like confidential business and technical information, including but not limited to, technical information, design systems, pricing methods, pricing rates or discounts, processes, procedures, formulas, designs of computer software, or improvements, or any portion or phase thereof, whether patented, or not, or unpatentable, that is of any value whatsoever to the Company, as well as information relating to the Company’s products, information concerning proposed new products, market feasibility studies, proposed or existing marketing techniques or plans (whether developed or produced by the Company or by any other person or entity for the Company), other Confidential Information, as defined in Section 9(a), and information about the Company’s executives, officers, and directors, which necessarily will be communicated to the Executive by reason of his employment by the Company; and

WHEREAS, the Company markets and sells certain of its inventions and products, and has strong and legitimate business interests in preserving and protecting its investment in the Executive, its trade secrets and Confidential Information, and its substantial, significant, or key relationships with vendors and Customers, as defined below, whether actual or prospective; and

WHEREAS, the Company desires to preserve and protect its legitimate business interests further by restricting competitive activities of the Executive during the term of this Agreement and for a reasonable time following the termination of this Agreement; and

WHEREAS, the Company and the Executive desire to enter into this new Agreement to supersede and replace all prior or current agreements on the subject matter hereto, including, but not limited to, the employment agreement between the Company and the Executive dated March 10, 2011; and

WHEREAS, the Company desires to employ the Executive and to ensure the continued availability to the Company of the Executive’s services, and the Executive is willing to accept such employment and render such services, all upon and subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth in this Agreement, and intending to be legally bound, the Company and the Executive agree as follows:

1.

Representations and Warranties.  The Executive hereby represents and warrants to the Company that he (i) is not subject to any non-solicitation or non-competition agreement affecting his employment with the Company (other than any prior agreement with the Company), (ii) is not subject to any confidentiality or nonuse/nondisclosure agreement affecting his  employment with the Company (other than any prior agreement with the Company), and (iii) has

brought to the Company no trade secrets, confidential business information, documents, or other personal property of a prior employer.

2.

Term of Employment.

(a)

Term.  The Company hereby employs the Executive, and the Executive hereby accepts employment with the Company for a period of four years commencing as of October 1, 2012 (the “Term”).

(b)

Continuing Effect.  Notwithstanding any termination of this Agreement, at the end of the Term or otherwise, the provisions of Sections 8 and 9 shall remain in full force and effect and the provisions of Section 8 shall be binding upon the legal representatives, successors and assigns of the Executive.  Provided, however, if the Executive is terminated without Cause or if he terminates his employment for Good Reason as those terms are defined in Sections 6(b) and (c), the provisions of Sections 8 and 9 shall not apply except for acts occurring prior to the date of termination.

3.

Duties.

(a)

General Duties.  The Executive shall serve as the _________ of the Company, with duties and responsibilities that are customary for such executives. [The Executive shall report to the Chief Executive Officer.]  The Executive shall also perform services for such subsidiaries of the Company as may be necessary.  The Executive shall use his best efforts to perform his duties and discharge his responsibilities pursuant to this Agreement competently, carefully and faithfully. In determining whether or not the Executive has used his best efforts hereunder, the Executive’s and the Company’s delegation of authority and all surrounding circumstances shall be taken into account and the best efforts of the Executive shall not be judged solely on the Company’s earnings or other results of the Executive’s performance, except as specifically provided to the contrary by this Agreement.

(b)

Devotion of Time.  Subject to the last sentence of this Section 3(b), the Executive shall devote such time, attention and energies to the affairs of the Company and its subsidiaries and affiliates as are necessary to perform his duties and responsibilities pursuant to this Agreement.  The Executive shall not enter the employ of or serve as a consultant to, or in any way perform any services with or without compensation to, any other persons, business, or organization, without the prior consent of the Board of Directors of the Company (the “Board”).  Notwithstanding the above, the Executive shall be permitted to devote a limited amount of his time, without compensation, to professional, charitable or similar organizations, provided that such activities do not interfere with the Executive’s performance of his duties and responsibilities as provided hereunder.

(c)

Location of Office. The Executive’s principal business office shall be at the Company’s Jupiter, Florida offices and/or any other location where the Company decides to open an office; provided that such office is within 15 miles of the Company’s Jupiter office location as of the date of this Agreement.  However, the Executive’s job responsibilities shall include all business travel necessary for the performance of his job.

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(d)

Adherence to Inside Information Policies.  The Executive acknowledges that the Company is publicly-held and, as a result, has implemented inside information policies designed to preclude its executives and those of its subsidiaries from violating the federal securities laws by trading on material, non-public information or passing such information on to others in breach of any duty owed to the Company, or any third party.  The Executive shall promptly execute any agreements generally distributed by the Company to its employees requiring such employees to abide by its inside information policies.  

4.

Compensation and Expenses.

(a)

Salary.  For the services of the Executive to be rendered under this Agreement, the Company shall pay the Executive an annual salary of $150,000 (the “Base Salary”), payable in accordance with the Company’s customary payroll practices, but no less frequently than twice per month. The Base Salary shall increase to: (i) $170,000 upon the Company generating $3,000,000 of revenue in any period of 12 consecutive months (in contrast to a fiscal year) (“Revenue Period”); (ii) $190,000 upon the Company generating $5,000,000 of revenue in any Revenue Period; and (iii) $200,000 upon the Company generating $6,000,000 of revenue in any Revenue Period.  Prior to the end of each 12-month period ending September 30^th (the “12-Month Period”), the Compensation Committee of the Board of Directors (the “Compensation Committee”) may, in its sole discretion, authorize an increase in the Executive’s Base Salary for the succeeding 12-Month Period.  Any increase of Base Salary shall be based on profitability, positive cash flow or such other factors as the Compensation Committee deems important.

(b)

Discretionary Bonus.  In each 12-Month Period, the Compensation Committee shall have the discretion to award the Executive a bonus based upon the Executive’s job performance, the Company’s revenue growth or any other factors as determined by the Compensation Committee.  Except for the first 12-Month Period, the specific criteria shall be set annually by the Compensation Committee in advance of the start of the 12-Month Period to which such criteria relates.  The specific criteria for the first 12-Month Period shall be set within six months of the date of this Agreement.  

(c)

Equity Incentive Compensation.  As soon as practicable following the execution of this Agreement by the Company and the Executive, the Company shall grant to the Executive 800,000 Stock Appreciation Rights (“SARs”) pursuant to the Company’s 2007 Equity Incentive Plan (the “Incentive Plan”).  The SARs shall vest, subject to continued employment with the Company on the applicable vesting date, as follows: (i) 200,000 SARs shall vest immediately on the date the SARs are granted to the Executive, (ii) another 200,000 SARs shall vest upon the Company generating $3,000,000 of revenue in any Revenue Period, (iii) another 200,000 SARs shall vest upon the Company generating $5,000,000 of revenue in any Revenue Period and (iv) another 200,000 SARs shall vest upon the Company generating $6,000,000 of revenue in any Revenue Period.  The SARs shall fully vest upon a “Change of Control” (as such term is defined in the Incentive Plan) or upon the Executive’s termination without Cause or with Good Reason.  Vested SARs shall be exercisable for a 10-year period from the date of this Agreement for shares of the Company’s common stock with an exercise price based on the closing price of the Company’s common stock on the date prior to the approval of this Agreement by the Compensation Committee.  Notwithstanding the foregoing, all grants of SARs

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pursuant to this Section 4(c) shall be subject to the terms of the Incentive Plan and the applicable award agreements.  The Company shall at all times reserve and keep available sufficient shares of the Company’s common stock to satisfy the requirements of the Incentive Plan, including the SARs granted pursuant to this Section 4(c).

(d)

Automobile Allowance.  During the Term of this Agreement, the Executive shall be entitled to an automobile allowance of $600 per month.  The Executive shall also be reimbursed for properly submitted expenses related to business related automobile expenses including gas, oil and tires.  Such amount shall be paid to the Executive by the Company in accordance with the Company’s policies and procedures in effect from time to time relating to automobile allowances for its executive officers.

(e)

Expenses.  In addition to any compensation received pursuant to this Section 4, the Company will reimburse or advance funds to the Executive for all reasonable documented travel, entertainment and miscellaneous expenses incurred in connection with the performance of his duties under this Agreement, provided that the Executive properly provides a written accounting of such expenses to the Company in accordance with the Company’s practices.  Such reimbursement or advances will be made in accordance with policies and procedures of the Company in effect from time to time relating to reimbursement of, or advances to, its executive officers.

5.

Benefits.

(a)

Vacation.  For each calendar year occurring during the Term, beginning with the calendar year in which the Term begins and ending with the calendar year in which the Term ends, the Executive shall be entitled to 20 days of vacation without loss of compensation or other benefits to which he is entitled under this Agreement, to be taken at such times as the Executive may select and the affairs of the Company may permit. The vacation days for any particular calendar year do not have to be used consecutively, and may be used at different times during the calendar year as the Executive may select and the affairs of the Company may permit.  Up to 10 days of unused vacation days for one calendar year may be carried over and used in a subsequent calendar year, provided that the number of such unused and carried over vacation days at any time shall not exceed 30 days.  Unused and carried over vacation days in excess of 30 days will be forfeited without compensation.  The Executive shall be entitled to a number of sick days each year in amounts consistent with the Company’s policy for employees. Notwithstanding anything contained herein, in no event shall the Executive be entitled to be paid cash for unused vacation days, and any unused vacation days at the end of the Term or remaining as of the date of termination shall be forfeited.  

(b)

Employee Benefit Programs.  The Executive is entitled to participate in any pension, 401(k), insurance or other employee benefit plan that is maintained by the Company for its executives, including programs of life and medical insurance and reimbursement of membership fees in professional organizations.  The Company shall also pay for, or reimburse the Executive, medical insurance premiums for the Executive.  The Company shall also pay one-half of the medical insurance premiums for the Executive’s spouse.

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6.

Termination.

(a)

Death or Disability.  Except as otherwise provided in this Agreement, this Agreement shall automatically terminate upon the death or disability of the Executive.  For purposes of this Section 6(a), “disability” shall mean (i)  the Executive is unable to engage in his customary duties by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months; (ii) the Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three  months under an accident and health plan covering employees of the Company; or (iii) the Executive is determined to be totally disabled by the Social Security Administration.  Any question as to the existence of a disability shall be determined by the written opinion of the Executive’s regularly attending physician (or his guardian) (or the Social Security Administration, where applicable). In the event that the Executive’s employment is terminated by reason of Executive’s death or disability, the Company shall pay the following to the Executive or his personal representative: (i) any accrued but unpaid Base Salary for services rendered to the date of termination, (ii) an amount equal to one (1) times Base Salary, (iii) any accrued but unpaid expenses required to be reimbursed under this Agreement, (iv) any earned but unpaid bonuses for any prior period and his annual bonus prorated to date of termination (to the extent the Compensation Committee has set a formula and it can be calculated), and (v) all equity awards previously granted to the Executive under the Incentive Plan or similar plan shall thereupon become fully vested, and the Executive or his legally appointed guardian, as the case may be, shall have up to one year from the date of termination to exercise all such previously granted options and SARs, provided that in no event shall any option or SAR be exercisable beyond its term.  The Executive (or his estate) shall receive the payments provided herein at such times as he would have received them if there was no death or disability.  Additionally, if the Executive’s employment is terminated because of disability, any benefits (except perquisites) to which the Executive may be entitled pursuant to Section 5(b) hereof shall continue to be paid or provided by the Company, as the case may be, for one year, subject to the terms of any applicable plan or insurance contract and applicable law.

(b)

Termination by the Company for Cause or by the Executive Without Good Reason.  The Company may terminate the Executive’s employment pursuant to the terms of this Agreement at any time for Cause (as defined below) by giving the Executive written notice of termination.  Such termination shall become effective upon the giving of such notice.  Upon any such termination for Cause, or in the event the Executive terminates his employment with the Company without Good Reason (as defined in Section 6(c)), then the Executive shall have no right to compensation, or reimbursement under Section 4, or to participate in any Executive benefit programs under Section 5, except as may otherwise be provided for herein or by law, for any period subsequent to the effective date of termination.  For purposes of this Agreement, “Cause” shall mean: (i) the Executive is convicted of, or pleads guilty or nolo contendere to, a felony related to the business of the Company; (ii) the Executive, in carrying out his duties hereunder, has acted with gross negligence or intentional misconduct resulting, in any case, in harm to the Company; (iii) the Executive misappropriates Company funds or otherwise defrauds the Company; (iv) the Executive breaches his fiduciary duty to the Company resulting in profit to him, directly or indirectly; (v) the Executive materially breaches any agreement with the Company; (vi) the Executive breaches any provision of Section 8 or Section 9; (vii) the

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Executive becomes subject to a preliminary or permanent injunction issued by a United States District Court enjoining the Executive from violating any securities law administered or regulated by the Securities and Exchange Commission; (viii) the Executive becomes subject to a cease and desist order or other order issued by the Securities and Exchange Commission (the “SEC”) after an opportunity for a hearing; (ix) the Executive refuses to carry out a resolution adopted by the Company’s Board at a meeting in which the Executive was offered a reasonable opportunity to argue that the resolution should not be adopted; or (x) the Executive abuses alcohol or drugs in a manner that interferes with the successful performance of his duties.    

(c)

Termination by the Company Without Cause or Termination by Executive for Good Reason.  The Executive may terminate this Agreement for Good Reason (as defined below) or the Company may terminate this Agreement without Cause.  In the event the Executive terminates this Agreement for Good Reason, or the Company terminates the Executive without Cause, the Executive shall be entitled to the following: (i) any accrued but unpaid Base Salary for services rendered to the date of termination; (ii) an amount equal to one (1) times Base Salary, or continuation of the Base Salary through the remaining Term of the Agreement, whichever is greater (the “Severance Amount”);  (iii) any accrued but unpaid expenses required to be reimbursed under this Agreement; (iv) any earned but unpaid bonuses, his annual bonus for the current period shall be prorated to the date of termination (to the extent the Board has set a formula and it can be calculated); and (v) all equity awards previously granted to the Executive under the Incentive Plan or similar plan shall thereupon become fully vested, and the Executive or his legally appointed guardian, as the case may be, shall have up to one year from the date of termination to exercise all such previously granted options and SARs, provided that in no event shall any option or SAR be exercisable beyond its term.  The payment of the Severance Amount is conditioned on the Executive signing the Agreement and General Release substantially in the form attached to this Agreement.  The term “Good Reason” shall mean: (i) a material diminution in the Executive’s authority, duties or responsibilities due to no fault of the Executive (unless the Executive has agreed to such diminution); or (ii) any other action or inaction that constitutes a material breach by the Company under this Agreement.  Prior to the Executive terminating his employment with the Company for Good Reason, the Executive must provide written notice to the Company, within 30 days following the Executive’s initial awareness of the existence of such condition, that such Good Reason exists and setting forth in detail the grounds the Executive believes constitutes Good Reason.  If the Company does not cure the condition(s) constituting Good Reason within 30 days following receipt of such notice, then the Executive’s employment shall be deemed terminated for Good Reason.  The Executive (or his estate) shall receive the payments provided herein at such times as he would have received them if there was no termination.

(d)

Any termination made by the Company under this Agreement shall be approved by the Board.  

7.

Indemnification.  The Company shall indemnify the Executive, to the maximum extent permitted by applicable law, against all costs, charges and expenses incurred or sustained by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being an officer, director or employee of the Company or of any subsidiary or affiliate of the Company.  This indemnification does not apply to intentional misconduct or ultra vires acts on the part of the Executive.  The Company shall provide, at its expense, directors and

6

officers insurance for the Executive in amounts and for a term consistent with industry standards.  Nothing in this Section 7 shall amend or supersede any existing Indemnification Agreement between the Company and the Executive.

8.

Non-Competition Agreement.

(a)

Competition with the Company.  Until termination of his employment and for a period of one year commencing on the date of termination, the Executive (individually or in association with, or as a shareholder, director, officer, consultant, employee, partner, joint venturer, member, or otherwise, of or through any person, firm, corporation, partnership, association or other entity) shall not, directly or indirectly, compete with the Company (which for the purpose of this Agreement also includes any of its subsidiaries or affiliates) by acting as an officer (or comparable position) of, owning an interest in, or providing services substantially similar to those services the Executive provided to the Company to any entity within any metropolitan area in the United States or other country in which the Company was actually engaged in business as of the time of termination of employment or where the Company reasonably expected to engage in business within three months of the date of termination of employment.  For purposes of this Agreement, the term “compete with the Company” shall refer to any business activity in which the Company was engaged as of the termination of the Executive’s employment or reasonably expected to engage in within three months of termination of employment; provided, however, the foregoing shall not prevent the Executive from (i) accepting employment with an enterprise engaged in two or more lines of business, one of which is the same or similar to the Company’s business (the “Prohibited Business”) if the Executive’s employment is totally unrelated to the Prohibited Business, (ii) competing in a country where as of the time of the alleged violation the Company has ceased engaging in business, or (iii) competing in a line of business which as of the time of the alleged violation the Company has either ceased engaging in or publicly announced or disclosed that it intends to cease engaging in; provided, further, the foregoing shall not prohibit the Executive from owning up to 5% of the securities of any publicly-traded enterprise provided that the Executive is not a director, officer, consultant, employee, partner, joint venturer, manager, or member of, or to such enterprise, or otherwise compensated for services rendered thereby.

(b)

Solicitation of Customers.  During the periods in which the provisions of Section 8(a) shall be in effect, the Executive, directly or indirectly, will not seek nor accept Prohibited Business from any Customer (as defined below) on behalf of himself or any enterprise or business other than the Company, refer Prohibited Business from any Customer to any enterprise or business other than the Company or receive commissions based on sales or otherwise relating to the Prohibited Business from any Customer, or any enterprise or business other than the Company.  For purposes of this Agreement, the term “Customer” means any person, firm, corporation, partnership, limited liability company, association or other entity to which the Company or any of its subsidiaries or affiliates sold or provided goods or services during the 24-month period prior to the time at which any determination is required to be made as to whether any such person, firm, corporation, partnership, limited liability company, association or other entity is a Customer, or who or which was approached by or who or which has approached an employee of the Company for the purpose of soliciting business from the Company or the third party, as the case may be, where the Executive was involved in the sales or sales negotiations.

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(c)

Solicitation of Employees. During the period in which the provisions of Section 8(a) and (b) shall be in effect, the Executive agrees that he shall not, directly or indirectly, request, recommend or advise any employee of the Company to terminate his or her employment with the Company, for the purposes of providing services for a Prohibited Business, or solicit for employment or recommend to any third party the solicitation for employment of any individual who was employed by the Company or any of its subsidiaries and affiliates at any time during the one year period preceding the Executive’s termination of employment.

(d)

Non-disparagement. The Executive agrees that, after the end of his employment, he will refrain from making, in writing or orally, any unfavorable comments about the Company, its operations, policies, or procedures that would be likely to injure the Company’s reputation or business prospects; provided, however, that nothing herein shall preclude the Executive from responding truthfully to a lawful subpoena or other compulsory legal process or from providing truthful information otherwise required by law.

(e)

No Payment. The Executive acknowledges and agrees that no separate or additional payment will be required to be made to him in consideration of his undertakings in this Section 8, and confirms he has received adequate consideration for such undertakings.

(f)

References.  References to the Company in this Section 8 shall include the Company’s subsidiaries and affiliates.

9.

Non-Disclosure of Confidential Information.

(a)

Confidential Information.  For purposes of this Agreement, “Confidential Information” includes, but is not limited to, trade secrets, processes, policies, procedures, techniques, designs, drawings, know-how, show-how, technical information, specifications, computer software and source code, information and data relating to the development, research, testing, costs, marketing, and uses of the Products (as defined below), the Company’s budgets and strategic plans, and the identity and special needs of Customers, vendors, and suppliers, subjects and databases, data, and all technology relating to the Company’s businesses, systems, methods of operation, and Customer lists, Customer information, solicitation leads, marketing and advertising materials, methods and manuals and forms, all of which pertain to the activities or operations of the Company, the names, home addresses and all telephone numbers and e-mail addresses of the Company’s directors, employees, officers, executives, former executives, Customers and former Customers. In addition, Confidential Information also includes Customers and the identity of and telephone numbers, e-mail addresses and other addresses of executives or agents of Customers who are the persons with whom the Company’s executives, officers, employees, and agents communicate in the ordinary course of business.  Confidential Information also includes, without limitation, Confidential Information received from the Company’s subsidiaries and affiliates.  For purposes of this Agreement, the following will not constitute Confidential Information (i) information which is or subsequently becomes generally available to the public through no act or fault of the Executive, (ii) information set forth in the written records of the Executive prior to disclosure to the Executive by or on behalf of the Company which information is given to the Company in writing as of or prior to the date of this Agreement, (iii) information which is lawfully obtained by the Executive in writing from a third party (excluding any affiliates of the Executive) who lawfully acquired the confidential

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information and who did not acquire such confidential information or trade secret, directly or indirectly, from the Executive or the Company or its subsidiaries or affiliates and who has not breached any duty of confidentiality, and (iv) information which the Executive is required to disclose pursuant to a lawful subpoena or other compulsory legal process or pursuant to applicable law for which the Company has determined not to seek a protective order.  As used herein, the term “Products” shall include all products offered for sale and marketed by the Company during the Term and any other products which the Company has taken concrete steps to offer for sale, but has not yet commenced marketing, during or prior to the Term.  Products also include any products disclosed in the Company’s latest Form 10-K and/or Form S-1 or S-3 (or successor form) filed with the SEC.

(b)

Legitimate Business Interests.  The Executive recognizes that the Company has legitimate business interests to protect and as a consequence, the Executive agrees to the restrictions contained in this Agreement because they further the Company’s legitimate business interests.  These legitimate business interests include, but are not limited to (i) trade secrets; (ii) valuable confidential business, technical, and/or professional information that otherwise may not qualify as trade secrets, including, but not limited to, all Confidential Information; (iii) substantial, significant, or key relationships with specific prospective or existing Customers, vendors or suppliers; (iv) Customer goodwill associated with the Company’s business; and (v) specialized training relating to the Company’s technology, Products, methods, operations and procedures.  Notwithstanding the foregoing, nothing in this Section 9(b) shall be construed to impose restrictions greater than those imposed by other provisions of this Agreement.

(c)

Confidentiality.  During the Term of this Agreement and following termination of employment, for any reason, the Confidential Information shall be held by the Executive in the strictest confidence and shall not, without the prior express written consent of the Company, be disclosed to any person other than in connection with the Executive’s employment by the Company.  The Executive further acknowledges that such Confidential Information as is acquired and used by the Company or its subsidiaries or affiliates is a special, valuable and unique asset.  The Executive shall exercise all due and diligent precautions to protect the integrity of the Company’s Confidential Information and to keep it confidential whether it is in written form, on electronic media, oral, or otherwise.  The Executive shall not copy any Confidential Information except to the extent necessary to his employment nor remove any Confidential Information or copies thereof from the Company’s premises except to the extent necessary to his employment.  All records, files, materials and other Confidential Information obtained by the Executive in the course of his employment with the Company are confidential and proprietary and shall remain the exclusive property of the Company, its Customers, or subjects, as the case may be.  The Executive shall not, except in connection with and as required by his performance of his duties under this Agreement, for any reason use for his own benefit or the benefit of any person or entity other than the Company or disclose any such Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever without the prior express written consent of an executive officer of the Company (excluding the Executive).

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10.

Equitable Relief.

(a)

The Company and the Executive recognize that the services to be rendered under this Agreement by the Executive are special, unique and of extraordinary character, and that in the event of the breach by the Executive of the terms and conditions of this Agreement or if the Executive, without the prior express consent of the Board, shall leave his employment for any reason and take any action in violation of Section 8 and/or Section 9, the Company shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction referred to in Section 10(b) below, to enjoin the Executive from breaching the provisions of Section 8 and/or Section 9.  In such action, the Company shall not be required to plead or prove irreparable harm or lack of an adequate remedy at law or post a bond or any security.

(b)

Any action must be commenced in Palm Beach County, Florida.  The Executive and the Company irrevocably and unconditionally submit to the exclusive jurisdiction of such courts and agree to take any and all future action necessary to submit to the jurisdiction of such courts.  The Executive and the Company irrevocably waive any objection that they now have or hereafter may have to the laying of venue of any suit, action or proceeding brought in any such court and further irrevocably waive any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Final judgment against the Executive or the Company in any such suit shall be conclusive and may be enforced in other jurisdictions by suit on the judgment, a certified or true copy of which shall be conclusive evidence of the fact and the amount of any liability of the Executive or the Company therein described, or by appropriate proceedings under any applicable treaty or otherwise.

11.

Conflicts of Interest.  While employed by the Company, the Executive shall not, unless approved by the Compensation Committee, directly or indirectly:

(a)

participate as an individual in any way in the benefits of transactions with any of the Company’s suppliers, vendors, Customers, or subjects, including, without limitation, having a financial interest in the Company’s suppliers, vendors, Customers, or subjects, or making loans to, or receiving loans, from, the Company’s suppliers, vendors, Customers, or subjects;

(b)

realize a personal gain or advantage from a transaction in which the Company has an interest or use information obtained in connection with the Executive’s employment with the Company for the Executive’s personal advantage or gain; or

(c)

accept any offer to serve as an officer, director, partner, consultant, manager with, or to be employed in a professional, medical, technical, or managerial capacity by, a person or entity which does business with the Company.

12.

Inventions, Ideas, Processes, and Designs.  All inventions, ideas, processes, programs, software, and designs (including all improvements) (i) conceived or made by the Executive during the course of his  employment with the Company (whether or not actually conceived during regular business hours) and for a period of six months subsequent to the termination (whether by expiration of the Term or otherwise) of such employment with the Company, and (ii) related to the business of the Company, shall be disclosed in writing promptly

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to the Company and shall be the sole and exclusive property of the Company, and the Executive hereby assigns any such inventions to the Company.  An invention, idea, process, program, software, or design (including an improvement) shall be deemed related to the business of the Company if (a) it was made with the Company’s funds, personnel, equipment, supplies, facilities, or Confidential Information, (b) results from work performed by the Executive for the Company, or (c) pertains to the current business or demonstrably anticipated research or development work of the Company.  The Executive shall cooperate with the Company and its attorneys in the preparation of patent and copyright applications for such developments and, upon request, shall promptly assign all such inventions, ideas, processes, and designs to the Company.  The decision to file for patent or copyright protection or to maintain such development as a trade secret, or otherwise, shall be in the sole discretion of the Company, and the Executive shall be bound by such decision.  If applicable, the Executive shall provide as a schedule to this Agreement, a complete list of all inventions, ideas, processes, and designs, if any, patented or unpatented, copyrighted or otherwise, or non-copyrighted, including a brief description, which he made or conceived prior to his  employment with the Company and which therefore are excluded from the scope of this Agreement. References to the Company in this Section 12 shall include the Company, its subsidiaries and affiliates.

13.

Indebtedness.  If, during the course of the Executive’s employment under this Agreement, the Executive becomes indebted to the Company for any reason, the Company may, if it so elects, and if permitted by applicable law, set off any sum due to the Company from the Executive and collect any remaining balance from the Executive unless the Executive has entered into a written agreement with the Company.

14.

Assignability.  The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company, provided that such successor or assign shall acquire all or substantially all of the securities or assets and business of the Company.  The Executive’s obligations hereunder may not be assigned or alienated and any attempt to do so by the Executive will be void.

15.

Severability.

(a)

The Executive expressly agrees that the character, duration and geographical scope of the non-competition provisions set forth in this Agreement are reasonable in light of the circumstances as they exist on the date hereof.  Should a decision, however, be made at a later date by a court of competent jurisdiction that the character, duration or geographical scope of such provisions is unreasonable, then it is the intention and the agreement of the Executive and the Company that this Agreement shall be construed by the court in such a manner as to impose only those restrictions on the Executive’s conduct that are reasonable in the light of the circumstances and as are necessary to assure to the Company the benefits of this Agreement.  If, in any judicial proceeding, a court shall refuse to enforce all of the separate covenants deemed included herein because taken together they are more extensive than necessary to assure to the Company the intended benefits of this Agreement, it is expressly understood and agreed by the parties hereto that the provisions of this Agreement that, if eliminated, would permit the remaining separate provisions to be enforced in such proceeding shall be deemed eliminated, for the purposes of such proceeding, from this Agreement.

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(b)

If any provision of this Agreement otherwise is deemed to be invalid or unenforceable or is prohibited by the laws of the state or jurisdiction where it is to be performed, this Agreement shall be considered divisible as to such provision and such provision shall be inoperative in such state or jurisdiction and shall not be part of the consideration moving from either of the parties to the other.  The remaining provisions of this Agreement shall be valid and binding and of like effect as though such provisions were not included.

16.

Notices and Addresses.  All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted delivery, or next business day delivery, or by facsimile or e-mail delivery (in which event a copy shall immediately be sent by FedEx or similar receipted delivery), as follows:

To the Company:

[Michael J. Cordani]

Chief Executive Officer

GelTech Solutions, Inc.

1460 Park Lane South, Suite 1

Jupiter, FL 33458

Email: mcordani@geltechsolutions.com

Facsimile:  (561) 427-6182

With a Copy to:

Pillsbury Winthrop Shaw Pittman LLP

Attn:  Stephen R. Rusmisel

1540 Broadway

New York, NY 10036

Email:  Stephen.rusmisel@pillsburylaw.com

To the Executive:

______________

GelTech Solutions, Inc.

1460 Park Lane South, Suite 1

Jupiter, FL 33458

Email:

Facsimile:  (561) 427-6182

or to such other address or facsimile number, as either of them, by notice to the other may designate from time to time.  The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of successful facsimile delivery.

17.

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

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18.

Attorneys’ Fees.  

(a)

Review of the Agreement.  The Company shall pay or the Executive shall be reimbursed for the Executive’s reasonable legal fees incurred in reviewing and negotiating this Agreement, up to a maximum of $7,000.00, provided that any such payment shall be made no later than March 15 of the calendar year immediately following the date hereof.

(b)

Controversy or Claim.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and expenses (including such fees and costs on appeal).

19.

Governing Law.  This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided therein or performance shall be governed or interpreted according to the internal laws of the State of Delaware without regard to choice of law considerations.

20.

Entire Agreement.  This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof, including, but not limited to, the employment agreement between the Company and the Executive dated March 10, 2011.  Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against which enforcement or the change, waiver discharge or termination is sought.

21.

Section and Paragraph Headings.  The section and paragraph headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

22.

Arbitration.  Except for a claim for equitable relief or as otherwise described in this Agreement, any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in Palm Beach County, Florida, before one arbitrator in accordance with the rules of the American Arbitration Association then in effect.  In any such arbitration proceeding the parties agree to provide all discovery deemed necessary by the arbitrator.  The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof.

23.

Sarbanes-Oxley Act of 2002.

(a)

In the event the Executive or the Company is the subject of an investigation (whether criminal, civil, or administrative) involving possible violations of the United States federal securities laws by the Executive, the Compensation Committee or the Board may, in its sole discretion, direct the Company to withhold any and all payments to the Executive (whether compensation or otherwise) which would have otherwise been made

13

pursuant to this Agreement or otherwise would have been paid or payable by the Company, which the Compensation Committee or the Board believes, in its sole discretion, may or could be considered an “extraordinary payment” and therefore at risk and potentially subject to, the provisions of Section 1103 of the Sarbanes-Oxley Act of 2002 (“SOX”) (including, but not limited to, any severance payments made to the Executive upon termination of employment).  The withholding of any payment shall be until such time as the investigation is concluded, without charges having been brought or until the successful conclusion of any legal proceedings brought in connection with such amounts as directed by the Compensation Committee or the Board to be withheld with or without the accruing of interest (and if with interest the rate thereof).  Except by an admission of wrongdoing or the final adjudication by a court or administrative agency finding the Executive liable for or guilty of violating any of the federal securities laws, rules or regulations, the Compensation Committee or the Board shall pay to the Executive such compensation or other payments.  Notwithstanding the exclusion caused by the first clause of the prior sentence, the Executive shall receive such payments if provided for by a court or other administrative order.

(b)

In the event that the Company restates any financial statements which have been contained in reports or registration statements filed with the SEC, and the restatement of the prior financial statements is as the result of material noncompliance with any financial reporting requirement under the securities laws, the Executive hereby acknowledges that the Company shall recover from the Executive (i) incentive-based compensation (including stock options) awarded during the three year period preceding the date on which the Company is required to prepare the restatement (ii) in excess of what would have been paid the Executive under the restatement.  This Section 23(b) shall be interpreted and administered in a manner consistent with any rules issued by the Securities and Exchange Commission under Section 10D of the Securities Exchange Act of 1934 (added by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) to the extent applicable. The Executive agrees to reimburse the Company for any bonuses received and/or profits realized from the sale of the Company’s securities (including the cash received from exercise of any options (or other awards of stock rights) during the 12-month period following the first public issuance or filing with the SEC of the report or registration statement (whichever comes first) containing the financial information required to be restated; provided, however, that this sentence shall not impose any liability on the Executive beyond any liability that is imposed under Section 304 of SOX.

(c)

Notwithstanding the provisions of Section 23(b), if the Company’s common stock is listed on a national securities exchange and such exchange adopts rules requiring clawbacks beyond what Section 10D of the Securities Exchange Act of 1934 or Section 304 of SOX requires, such rules shall be incorporated in this Agreement to the extent applicable and the Executive shall comply with such rules, including but not limited to executing any amendment to this Agreement.

24.

Section 409A.

(a)

Notwithstanding anything to the contrary contained in this Agreement, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code,

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then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20% additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (i) six months and one day after the Executive’s separation from service, or (ii) the Executive’s death (the “Six Month Delay Rule”).

(b)

For purposes of this Section 24, amounts payable under the Agreement should not be considered a deferral of compensation subject to Section 409A to the extent provided in Treasury Regulation Section 1.409A-1(b)(4) (i.e., short-term deferrals), Treasury Regulation Section 1.409A-1(b)(9) (i.e., separation pay plans, including the exception under subparagraph (iii)), and other applicable provisions of Treasury Regulations Sections 1.409A-1 through A-6.

(c)

To the extent that the Six Month Delay Rule applies to payments otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of the Six Month Delay Rule, and the balance of the installments shall be payable in accordance with their original schedule.

(d)

To the extent that the Six Month Delay Rule applies to the provision of benefits (including, but not limited to, life insurance and medical insurance), such benefit coverage shall nonetheless be provided to the Executive during the first six months following his separation from service (the “Six Month Period”), provided that, during such Six-Month Period, the Executive pays to the Company, on a monthly basis in advance, an amount equal to the Monthly Cost (as defined below) of such benefit coverage. The Company shall reimburse the Executive for any such payments made by the Executive in a lump sum not later than 30 days following the sixth month anniversary of the Executive’s separation from service. For purposes of this subparagraph, “Monthly Cost” means the minimum dollar amount which, if paid by the Executive on a monthly basis in advance, results in the Executive not being required to recognize any federal income tax on receipt of the benefit coverage during the Six Month Period.

(e)

The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

(f)

The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

Signature Page To Follow

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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date and year first above written.

	GelTech Solutions, Inc.
	By
Date		______________ ___________

	Executive:
Date		______________ ___________

AGREEMENT AND GENERAL RELEASE

THIS AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made and entered into on ______________ , 201_, by and between ___________ (“Employee”) and GelTech Solutions, Inc. (“Employer”).

WHEREAS, Employee formerly was employed by Employer;

WHEREAS, the parties wish to resolve all outstanding claims and disputes between them in an amicable manner;

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth in this Agreement, the sufficiency of which the parties acknowledge, it is agreed as follows:

1.

In consideration for Employee’s promises in this Agreement, Employer agrees to pay Employee a total of _______________ Dollars ($__________), minus standard payroll tax deductions.  Employee would not otherwise be entitled to this payment but for his/her promises in this Agreement.  The payment will be disbursed to Employee within ten (10) business days following Employer’s receipt of this Agreement executed by Employee.

2.

The parties agree that the payment in Section 1 is in full, final and complete settlement of all claims Employee may have against Employer, its past and present affiliates, officers, directors, owners, employees, agents, successors and assigns.

3.

Nothing in this Agreement shall be construed as an admission of liability by Employer, its past and present affiliates, officers, directors, owners, employees or agents, and Employer specifically disclaims liability to or wrongful treatment of Employee on the part of itself, its past and present affiliates, officers, directors, owners, employees and agents.

4.

Employee represents that he/she has not filed any complaints or charges against Employer with the Equal Employment Opportunity Commission, or with any other federal, state or local agency or court, and covenants that he/she will not seek to recover on any claim released in this Agreement.

5.

Employee agrees that he/she will not encourage or assist any of Employer’s employees to litigate claims or file administrative charges against Employer or its past and present affiliates, officers, directors, owners, employees and agents, unless required to provide testimony or documents pursuant to a lawful subpoena or other compulsory legal process.

6.

Employee covenants not to sue, and fully and forever releases and discharges Employer, its past and present affiliates, directors, officers, owners, employees and agents, as well as its successors and assigns (collectively, the “Releasees”) from any and all legally waivable claims, liabilities, damages, demands, and causes of action or liabilities of any nature or kind, whether now known or unknown, arising out of or in any way connected with Employee’s employment with Employer or the termination of that employment; provided, however, that nothing in this Agreement shall either waive any rights or claims of Employee that arise after

Employee signs this Agreement or impair or preclude Employee’s right to take action to enforce the terms of this Agreement.  This release includes but is not limited to claims arising under federal, state or local laws prohibiting employment discrimination or relating to leave from employment, including but not limited to Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as amended, the Equal Pay Act and the Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, claims for attorneys’ fees or costs, and any and all claims in contract, tort, or premised on any other legal theory. Employee acknowledges that Employee has been paid in full all compensation owed to Employee by Employer as a result of Employee’s employment.

7.

Employee acknowledges that all confidential information regarding Employer’s business compiled, created or obtained by, or furnished to, Employee during the course of or in connection with his/her employment with Employer is Employer’s exclusive property.  Upon or before execution of this Agreement, Employee will return to Employer all originals and copies of any material containing confidential information and Employee further agrees that he/she will not, directly or indirectly, use or disclose such information.  Employee will also return to Employer upon or before execution of this Agreement any other items in his/her possession, custody or control that are the property of Employer, including, but not limited to, his/her files, PDA, credit cards, identification card, flash drives, passwords and office keys.

8.

Employee acknowledges that he/she has been given at least twenty-one (21) days to consider this Agreement and that he/she has seven (7) days from the date he/she executes this Agreement in which to revoke it and that this Agreement will not be effective or enforceable nor the amounts set forth in Section 1 paid until after the seven-day revocation period ends without revocation by Employee.  Revocation can be made by delivery of a written notice of revocation to [name/title/address], by midnight on or before the seventh calendar day after Employee signs the Agreement.

9.

Employee acknowledges that he/she has been advised to consult with an attorney of his/her choice with regard to this Agreement.  Employee hereby acknowledges that he/she understands the significance of this Agreement, and represents that the terms of this Agreement are fully understood and voluntarily accepted by him/her.

10.

Employee agrees that he/she will treat the existence and terms of this Agreement as confidential and will not discuss the Agreement with anyone other than:  (i) his/her counsel or tax advisor as necessary to secure their professional advice, (ii) his/her spouse, or (iii) as may be required by law.

11.

Employee agrees to refrain from making any unfavorable comments, in writing or orally, about Employer, its operations, policies, or procedures, or about the Releasees; provided, however, that nothing herein shall preclude Employee from responding truthfully to a lawful subpoena or other compulsory legal process or from providing truthful information otherwise required by law.

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12.

In the event of any lawsuit against Employer that relates to alleged acts or omissions by Employee during his/her employment with Employer, Employee agrees to cooperate with Employer by voluntarily providing truthful and full information as reasonably necessary for Employer to defend against such lawsuit.

13.

This Agreement shall be binding on Employer and Employee and upon their respective heirs, representatives, successors and assigns, and shall run to the benefit of the Releasees and each of them and to their respective heirs, representatives, successors and assigns.

14.

This Agreement sets forth the entire agreement between Employee and Employer, and fully supersedes any and all prior agreements or understandings between them regarding its subject matter; provided, however, that nothing in this Agreement is intended to or shall be construed to modify, impair or terminate any obligation of Employee pursuant to provisions of Employee’s Employment Agreement dated _________ that by their terms continues after Employee’s separation from Employer’s employment.  This Agreement may only be modified by written agreement signed by both parties.

15.

Employer and Employee agree that in the event any provision of this Agreement is deemed to be invalid or unenforceable by any court or administrative agency of competent jurisdiction, or in the event that any provision cannot be modified so as to be valid and enforceable, then that provision shall be deemed severed from the Agreement and the remainder of the Agreement shall remain in full force and effect.

16.

Employee agrees that his/her compliance with Sections 7, 10, 11, and 12 of this Agreement are material to this Agreement and that, in the event of breach by Employee of his/her obligations under those Sections, Employer shall be entitled to withhold or recover all but $100.00 of the amounts paid or payable to Employee under Section 1 of this Agreement, which Employee agrees shall constitute sufficient and adequate consideration for his/her promises in the Agreement, including without limitation his/her undertakings pursuant to Section 6 of this Agreement.

17.

This Agreement in all respects shall be interpreted and entered under the laws of the State of Florida.  The language of all parts of this Agreement in all cases shall be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties.

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PLEASE READ CAREFULLY.  THIS AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

Dated:  _________________________		______________________________________
		[EMPLOYEE]
Dated:  _________________________		GelTech Solutions, Inc.
	By:	______________________________________

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EX-10.5

Exhibit 10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) entered into as of October 1, 2012, between GelTech Solutions, Inc., a Delaware corporation (the “Company”), and Jerome B. Eisenberg (the “Executive”).

WHEREAS, in its business, the Company has acquired and developed certain trade secrets, including, but not limited to, proprietary processes, sales methods and techniques, and other like confidential business and technical information, including but not limited to, technical information, design systems, pricing methods, pricing rates or discounts, processes, procedures, formulas, designs of computer software, or improvements, or any portion or phase thereof, whether patented, or not, or unpatentable, that is of any value whatsoever to the Company, as well as information relating to the Company’s products, information concerning proposed new products, market feasibility studies, proposed or existing marketing techniques or plans (whether developed or produced by the Company or by any other person or entity for the Company), other Confidential Information, as defined in Section 9(a), and information about the Company’s executives, officers, and directors, which necessarily will be communicated to the Executive by reason of his employment by the Company; and

WHEREAS, the Company markets and sells certain of its inventions and products, and has strong and legitimate business interests in preserving and protecting its investment in the Executive, its trade secrets and Confidential Information, and its substantial, significant, or key relationships with vendors and Customers, as defined below, whether actual or prospective; and

WHEREAS, the Company desires to preserve and protect its legitimate business interests further by restricting competitive activities of the Executive during the term of this Agreement and for a reasonable time following the termination of this Agreement; and

WHEREAS, the Company and the Executive desire to enter into this new Agreement to supersede and replace all prior or current agreements on the subject matter hereto; and

WHEREAS, the Company desires to employ the Executive and to ensure the continued availability to the Company of the Executive’s services, and the Executive is willing to accept such employment and render such services, all upon and subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth in this Agreement, and intending to be legally bound, the Company and the Executive agree as follows:

1.

Representations and Warranties.  The Executive hereby represents and warrants to the Company that he (i) is not subject to any non-solicitation or non-competition agreement affecting his employment with the Company (other than any prior agreement with the Company), (ii) is not subject to any confidentiality or nonuse/nondisclosure agreement affecting his  employment with the Company (other than any prior agreement with the Company), and (iii) has brought to the Company no trade secrets, confidential business information, documents, or other personal property of a prior employer.

2.

Term of Employment.

(a)

Term.  The Company hereby employs the Executive, and the Executive hereby accepts employment with the Company for a period of four years commencing as of October 1, 2012 (the “Term”).

(b)

Continuing Effect.  Notwithstanding any termination of this Agreement, at the end of the Term or otherwise, the provisions of Sections 8 and 9 shall remain in full force and effect and the provisions of Section 8 shall be binding upon the legal representatives, successors and assigns of the Executive.  Provided, however, if the Executive is terminated without Cause or if he terminates his employment for Good Reason as those terms are defined in Sections 6(b) and (c), the provisions of Sections 8 and 9 shall not apply except for acts occurring prior to the date of termination.

3.

Duties.

(a)

General Duties.  The Executive shall serve as the Executive Chairman of the Company, with the following duties and responsibilities: serving as the President of the international subsidiary of the Company; negotiating all equity and loan financing transactions of the Company; and all other duties and responsibilities that are customary for such executives. The Executive shall report to the Board of Directors (the “Board”).  The Executive shall also perform services for such subsidiaries of the Company as may be necessary.  The Executive shall use his best efforts to perform his duties and discharge his responsibilities pursuant to this Agreement competently, carefully and faithfully. In determining whether or not the Executive has used his best efforts hereunder, the Executive’s and the Company’s delegation of authority and all surrounding circumstances shall be taken into account and the best efforts of the Executive shall not be judged solely on the Company’s earnings or other results of the Executive’s performance, except as specifically provided to the contrary by this Agreement.

(b)

Devotion of Time.  Subject to the last sentence of this Section 3(b), the Executive shall devote such time, attention and energies to the affairs of the Company and its subsidiaries and affiliates as are necessary to perform his duties and responsibilities pursuant to this Agreement.  The Executive shall not enter the employ of or serve as a consultant to, or in any way perform any services with or without compensation to, any other persons, business, or organization, without the prior consent of the Board.  Notwithstanding the above, the Executive shall be permitted to (i) devote a limited amount of his time, without compensation, to professional, charitable or similar organizations, and (ii) devote a limited amount of his time, with or without compensation, to, or own equity in, other companies that do not compete with the business of the Company, including, but not limited to, ORBCOMM, Inc., The New Jersey Institute for Training in Psychoanalysis, Inc., Dr. David Spiegel or any company he may form, MTI and WTE, provided that such activities described in this sentence do not interfere with the Executive’s performance of his duties and responsibilities as provided hereunder.

(c)

Location of Office. The Executive’s principal business office shall be at the Company’s Jupiter, Florida offices and/or any other location where the Company decides to open an office; provided that such office is within 15 miles of the Company’s Jupiter office

2

location as of the date of this Agreement.  However, the Executive’s job responsibilities shall include all business travel necessary for the performance of his job.

(d)

Adherence to Inside Information Policies.  The Executive acknowledges that the Company is publicly-held and, as a result, has implemented inside information policies designed to preclude its executives and those of its subsidiaries from violating the federal securities laws by trading on material, non-public information or passing such information on to others in breach of any duty owed to the Company, or any third party.  The Executive shall promptly execute any agreements generally distributed by the Company to its employees requiring such employees to abide by its inside information policies.  

4.

Compensation and Expenses.

(a)

Salary.  For the services of the Executive to be rendered under this Agreement, the Company shall pay the Executive an annual salary of $200,000 (the “Base Salary”), payable in accordance with the Company’s customary payroll practices, but no less frequently than twice per month.  Prior to the end of each 12-month period ending September 30^th (the “12-Month Period”), the Compensation Committee of the Board of Directors (the “Compensation Committee”) may, in its sole discretion, authorize an increase in the Executive’s Base Salary for the succeeding 12-Month Period.  Any increase of Base Salary shall be based on profitability, positive cash flow or such other factors as the Compensation Committee deems important.

(b)

Discretionary Bonus.  In each 12-Month Period, the Compensation Committee shall have the discretion to award the Executive a bonus based upon the Executive’s job performance, including equity and loan financings closed during the fiscal year and any other factors as determined by the Compensation Committee.  Except for the first 12-Month Period, the specific criteria shall be set annually by the Compensation Committee in advance of the start of the 12-Month Period to which such criteria relates.  The specific criteria for the first 12-Month Period shall be set within six months of the date of this Agreement.  

In addition, in connection with each equity and loan financing transaction closed during each fiscal year of the Term, the Compensation Committee shall have the discretion to award the Executive a bonus, payable in cash and/or in the form of warrants, stock options or other equity awards at the time of the closing for such financing transaction.  The specific criteria for each such bonus shall be set by the Compensation Committee in advance of the financing transaction for which such bonus is payable.  Any equity awards payable in connection with such a bonus may be paid under the Company’s 2007 Equity Incentive Plan (the “Incentive Plan”) or similar plan or in a separate issuance by the Company, as determined by the Compensation Committee.

(c)

Equity Incentive Compensation.  As soon as practicable following the execution of this Agreement by the Company and the Executive, the Company shall grant to the Executive 800,000 Restricted Stock Units (“RSUs”) pursuant to the Incentive Plan.  The RSUs shall vest, subject to continued employment with the Company on the applicable vesting date, as follows: (i) 200,000 RSUs shall vest immediately on the date the RSUs are granted to the Executive, (ii) another 200,000 RSUs shall vest upon the Company generating $3,000,000 of

3

revenue in any Revenue Period, (iii) another 200,000 RSUs shall vest upon the Company generating $5,000,000 of revenue in any Revenue Period and (iv) another 200,000 RSUs shall vest upon the Company generating $6,000,000 of revenue in any Revenue Period.  The RSUs shall fully vest upon a “Change of Control” (as such term is defined in the Incentive Plan) or upon the Executive’s termination without Cause or with Good Reason.  Notwithstanding the foregoing, all grants of RSUs pursuant to this Section 4(c) shall be subject to the terms of the Incentive Plan and the applicable award agreements.  The Company shall at all times reserve and keep available sufficient shares of the Company’s common stock to satisfy the requirements of the Incentive Plan, including the RSUs granted pursuant to this Section 4(c).

(d)

Automobile Allowance.  During the Term of this Agreement, the Executive shall be entitled to an automobile allowance of $600 per month.  The Executive shall also be reimbursed for properly submitted expenses related to business related automobile expenses including gas, oil and tires.  Such amount shall be paid to the Executive by the Company in accordance with the Company’s policies and procedures in effect from time to time relating to automobile allowances for its executive officers.

(e)

Expenses.  In addition to any compensation received pursuant to this Section 4, the Company will reimburse or advance funds to the Executive for all reasonable documented travel, entertainment and miscellaneous expenses incurred in connection with the performance of his duties under this Agreement, provided that the Executive properly provides a written accounting of such expenses to the Company in accordance with the Company’s practices.  Such reimbursement or advances will be made in accordance with policies and procedures of the Company in effect from time to time relating to reimbursement of, or advances to, its executive officers.

5.

Benefits.

(a)

Vacation.  For each calendar year occurring during the Term, beginning with the calendar year in which the Term begins and ending with the calendar year in which the Term ends, the Executive shall be entitled to 20 days of vacation without loss of compensation or other benefits to which he is entitled under this Agreement, to be taken at such times as the Executive may select and the affairs of the Company may permit. The vacation days for any particular calendar year do not have to be used consecutively, and may be used at different times during the calendar year as the Executive may select and the affairs of the Company may permit.  Up to 10 days of unused vacation days for one calendar year may be carried over and used in a subsequent calendar year, provided that the number of such unused and carried over vacation days at any time shall not exceed 30 days.  Unused and carried over vacation days in excess of 30 days will be forfeited without compensation.  The Executive shall be entitled to a number of sick days each year in amounts consistent with the Company’s policy for employees. Notwithstanding anything contained herein, in no event shall the Executive be entitled to be paid cash for unused vacation days, and any unused vacation days at the end of the Term or remaining as of the date of termination shall be forfeited.  

(b)

Employee Benefit Programs.  The Executive is entitled to participate in any pension, 401(k), insurance or other employee benefit plan that is maintained by the Company for its executives, including programs of life and medical insurance and

4

reimbursement of membership fees in professional organizations.  The Company shall also pay for, or reimburse the Executive, medical insurance premiums for the Executive.  The Company shall also pay one-half of the medical insurance premiums for the Executive’s spouse.

6.

Termination.

(a)

Death or Disability.  Except as otherwise provided in this Agreement, this Agreement shall automatically terminate upon the death or disability of the Executive.  For purposes of this Section 6(a), “disability” shall mean (i)  the Executive is unable to engage in his customary duties by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months; (ii) the Executive is, by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three  months under an accident and health plan covering employees of the Company; or (iii) the Executive is determined to be totally disabled by the Social Security Administration.  Any question as to the existence of a disability shall be determined by the written opinion of the Executive’s regularly attending physician (or his guardian) (or the Social Security Administration, where applicable). In the event that the Executive’s employment is terminated by reason of Executive’s death or disability, the Company shall pay the following to the Executive or his personal representative: (i) any accrued but unpaid Base Salary for services rendered to the date of termination, (ii) an amount equal to one (1) times Base Salary, (iii) any accrued but unpaid expenses required to be reimbursed under this Agreement, (iv) any earned but unpaid bonuses for any prior period and his annual bonus prorated to date of termination (to the extent the Compensation Committee has set a formula and it can be calculated), and (v) all RSUs, warrants and other equity awards previously granted to the Executive under this Agreement or the Incentive Plan or similar plan shall thereupon become fully vested, and the Executive or his legally appointed guardian, as the case may be, shall have up to one year from the date of termination to exercise all such previously granted warrants, options and SARs, provided that in no event shall any warrant, option or SAR be exercisable beyond its term.  The Executive (or his estate) shall receive the payments provided herein at such times as he would have received them if there was no death or disability.  Additionally, if the Executive’s employment is terminated because of disability, any benefits (except perquisites) to which the Executive may be entitled pursuant to Section 5(b) hereof shall continue to be paid or provided by the Company, as the case may be, for one year, subject to the terms of any applicable plan or insurance contract and applicable law.

(b)

Termination by the Company for Cause or by the Executive Without Good Reason.  The Company may terminate the Executive’s employment pursuant to the terms of this Agreement at any time for Cause (as defined below) by giving the Executive written notice of termination.  Such termination shall become effective upon the giving of such notice.  Upon any such termination for Cause, or in the event the Executive terminates his employment with the Company without Good Reason (as defined in Section 6(c)), then the Executive shall have no right to compensation, or reimbursement under Section 4, or to participate in any Executive benefit programs under Section 5, except as may otherwise be provided for herein or by law, for any period subsequent to the effective date of termination.  For purposes of this Agreement, “Cause” shall mean: (i) the Executive is convicted of, or pleads guilty or nolo contendere to, a felony related to the business of the Company; (ii) the Executive, in carrying out his duties

5

hereunder, has acted with gross negligence or intentional misconduct resulting, in any case, in harm to the Company; (iii) the Executive misappropriates Company funds or otherwise defrauds the Company; (iv) the Executive breaches his fiduciary duty to the Company resulting in profit to him, directly or indirectly; (v) the Executive materially breaches any agreement with the Company; (vi) the Executive breaches any provision of Section 8 or Section 9; (vii) the Executive becomes subject to a preliminary or permanent injunction issued by a United States District Court enjoining the Executive from violating any securities law administered or regulated by the Securities and Exchange Commission; (viii) the Executive becomes subject to a cease and desist order or other order issued by the Securities and Exchange Commission (the “SEC”) after an opportunity for a hearing; (ix) the Executive refuses to carry out a resolution adopted by the Company’s Board at a meeting in which the Executive was offered a reasonable opportunity to argue that the resolution should not be adopted; or (x) the Executive abuses alcohol or drugs in a manner that interferes with the successful performance of his duties.    

(c)

Termination by the Company Without Cause or Termination by Executive for Good Reason.  The Executive may terminate this Agreement for Good Reason (as defined below) or the Company may terminate this Agreement without Cause.  In the event the Executive terminates this Agreement for Good Reason, or the Company terminates the Executive without Cause, the Executive shall be entitled to the following: (i) any accrued but unpaid Base Salary for services rendered to the date of termination; (ii) an amount equal to one (1) times Base Salary, or continuation of the Base Salary through the remaining Term of the Agreement, whichever is greater (the “Severance Amount”);  (iii) any accrued but unpaid expenses required to be reimbursed under this Agreement; (iv) any earned but unpaid bonuses, his annual bonus for the current period shall be prorated to the date of termination (to the extent the Board has set a formula and it can be calculated); and (v) all RSUs, warrants and other equity awards previously granted to the Executive under this Agreement or the Incentive Plan or similar plan shall thereupon become fully vested, and the Executive or his legally appointed guardian, as the case may be, shall have up to one (1) year from the date of termination to exercise all such previously granted warrants, options and SARs, provided that in no event shall any warrant, option or SAR be exercisable beyond its term.  The payment of the Severance Amount is conditioned on the Executive signing the Agreement and General Release substantially in the form attached to this Agreement.  The term “Good Reason” shall mean: (i) a material diminution in the Executive’s authority, duties or responsibilities due to no fault of the Executive (unless the Executive has agreed to such diminution); or (ii) any other action or inaction that constitutes a material breach by the Company under this Agreement.  Prior to the Executive terminating his employment with the Company for Good Reason, the Executive must provide written notice to the Company, within 30 days following the Executive’s initial awareness of the existence of such condition, that such Good Reason exists and setting forth in detail the grounds the Executive believes constitutes Good Reason.  If the Company does not cure the condition(s) constituting Good Reason within 30 days following receipt of such notice, then the Executive’s employment shall be deemed terminated for Good Reason.  The Executive (or his estate) shall receive the payments provided herein at such times as he would have received them if there was no termination.

(d)

Any termination made by the Company under this Agreement shall be approved by the Board.  

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7.

Indemnification.  The Company shall indemnify the Executive, to the maximum extent permitted by applicable law, against all costs, charges and expenses incurred or sustained by him in connection with any action, suit or proceeding to which he may be made a party by reason of his being an officer, director or employee of the Company or of any subsidiary or affiliate of the Company.  This indemnification does not apply to intentional misconduct or ultra vires acts on the part of the Executive.  The Company shall provide, at its expense, directors and officers insurance for the Executive in amounts and for a term consistent with industry standards.  Nothing in this Section 7 shall amend or supersede any existing Indemnification Agreement between the Company and the Executive.

8.

Non-Competition Agreement.

(a)

Competition with the Company.  Until termination of his employment and for a period of one year commencing on the date of termination, the Executive (individually or in association with, or as a shareholder, director, officer, consultant, employee, partner, joint venturer, member, or otherwise, of or through any person, firm, corporation, partnership, association or other entity) shall not, directly or indirectly, compete with the Company (which for the purpose of this Agreement also includes any of its subsidiaries or affiliates) by acting as an officer (or comparable position) of, owning an interest in, or providing services substantially similar to those services the Executive provided to the Company to any entity within any metropolitan area in the United States or other country in which the Company was actually engaged in business as of the time of termination of employment or where the Company reasonably expected to engage in business within three months of the date of termination of employment.  For purposes of this Agreement, the term “compete with the Company” shall refer to any business activity in which the Company was engaged as of the termination of the Executive’s employment or reasonably expected to engage in within three months of termination of employment; provided, however, the foregoing shall not prevent the Executive from (i) accepting employment with an enterprise engaged in two or more lines of business, one of which is the same or similar to the Company’s business (the “Prohibited Business”) if the Executive’s employment is totally unrelated to the Prohibited Business, (ii) competing in a country where as of the time of the alleged violation the Company has ceased engaging in business, or (iii) competing in a line of business which as of the time of the alleged violation the Company has either ceased engaging in or publicly announced or disclosed that it intends to cease engaging in; provided, further, the foregoing shall not prohibit the Executive from owning up to 5% of the securities of any publicly-traded enterprise provided that the Executive is not a director, officer, consultant, employee, partner, joint venturer, manager, or member of, or to such enterprise, or otherwise compensated for services rendered thereby.

(b)

Solicitation of Customers.  During the periods in which the provisions of Section 8(a) shall be in effect, the Executive, directly or indirectly, will not seek nor accept Prohibited Business from any Customer (as defined below) on behalf of himself or any enterprise or business other than the Company, refer Prohibited Business from any Customer to any enterprise or business other than the Company or receive commissions based on sales or otherwise relating to the Prohibited Business from any Customer, or any enterprise or business other than the Company.  For purposes of this Agreement, the term “Customer” means any person, firm, corporation, partnership, limited liability company, association or other entity to which the Company or any of its subsidiaries or affiliates sold or provided goods or services

7

during the 24-month period prior to the time at which any determination is required to be made as to whether any such person, firm, corporation, partnership, limited liability company, association or other entity is a Customer, or who or which was approached by or who or which has approached an employee of the Company for the purpose of soliciting business from the Company or the third party, as the case may be, where the Executive was involved in the sales or sales negotiations.

(c)

Solicitation of Employees. During the period in which the provisions of Section 8(a) and (b) shall be in effect, the Executive agrees that he shall not, directly or indirectly, request, recommend or advise any employee of the Company to terminate his or her employment with the Company, for the purposes of providing services for a Prohibited Business, or solicit for employment or recommend to any third party the solicitation for employment of any individual who was employed by the Company or any of its subsidiaries and affiliates at any time during the one year period preceding the Executive’s termination of employment.

(d)

Non-disparagement. The Executive agrees that, after the end of his employment, he will refrain from making, in writing or orally, any unfavorable comments about the Company, its operations, policies, or procedures that would be likely to injure the Company’s reputation or business prospects; provided, however, that nothing herein shall preclude the Executive from responding truthfully to a lawful subpoena or other compulsory legal process or from providing truthful information otherwise required by law.

(e)

No Payment. The Executive acknowledges and agrees that no separate or additional payment will be required to be made to him in consideration of his undertakings in this Section 8, and confirms he has received adequate consideration for such undertakings.

(f)

References.  References to the Company in this Section 8 shall include the Company’s subsidiaries and affiliates.

9.

Non-Disclosure of Confidential Information.

(a)

Confidential Information.  For purposes of this Agreement, “Confidential Information” includes, but is not limited to, trade secrets, processes, policies, procedures, techniques, designs, drawings, know-how, show-how, technical information, specifications, computer software and source code, information and data relating to the development, research, testing, costs, marketing, and uses of the Products (as defined below), the Company’s budgets and strategic plans, and the identity and special needs of Customers, vendors, and suppliers, subjects and databases, data, and all technology relating to the Company’s businesses, systems, methods of operation, and Customer lists, Customer information, solicitation leads, marketing and advertising materials, methods and manuals and forms, all of which pertain to the activities or operations of the Company, the names, home addresses and all telephone numbers and e-mail addresses of the Company’s directors, employees, officers, executives, former executives, Customers and former Customers. In addition, Confidential Information also includes Customers and the identity of and telephone numbers, e-mail addresses and other addresses of executives or agents of Customers who are the persons with whom the Company’s executives, officers, employees, and agents communicate in the ordinary course of business.  Confidential Information also includes, without limitation, Confidential Information received from the

8

Company’s subsidiaries and affiliates.  For purposes of this Agreement, the following will not constitute Confidential Information (i) information which is or subsequently becomes generally available to the public through no act or fault of the Executive, (ii) information set forth in the written records of the Executive prior to disclosure to the Executive by or on behalf of the Company which information is given to the Company in writing as of or prior to the date of this Agreement, (iii) information which is lawfully obtained by the Executive in writing from a third party (excluding any affiliates of the Executive) who lawfully acquired the confidential information and who did not acquire such confidential information or trade secret, directly or indirectly, from the Executive or the Company or its subsidiaries or affiliates and who has not breached any duty of confidentiality, and (iv) information which the Executive is required to disclose pursuant to a lawful subpoena or other compulsory legal process or pursuant to applicable law for which the Company has determined not to seek a protective order.  As used herein, the term “Products” shall include all products offered for sale and marketed by the Company during the Term and any other products which the Company has taken concrete steps to offer for sale, but has not yet commenced marketing, during or prior to the Term.  Products also include any products disclosed in the Company’s latest Form 10-K and/or Form S-1 or S-3 (or successor form) filed with the SEC.

(b)

Legitimate Business Interests.  The Executive recognizes that the Company has legitimate business interests to protect and as a consequence, the Executive agrees to the restrictions contained in this Agreement because they further the Company’s legitimate business interests.  These legitimate business interests include, but are not limited to (i) trade secrets; (ii) valuable confidential business, technical, and/or professional information that otherwise may not qualify as trade secrets, including, but not limited to, all Confidential Information; (iii) substantial, significant, or key relationships with specific prospective or existing Customers, vendors or suppliers; (iv) Customer goodwill associated with the Company’s business; and (v) specialized training relating to the Company’s technology, Products, methods, operations and procedures.  Notwithstanding the foregoing, nothing in this Section 9(b) shall be construed to impose restrictions greater than those imposed by other provisions of this Agreement.

(c)

Confidentiality.  During the Term of this Agreement and following termination of employment, for any reason, the Confidential Information shall be held by the Executive in the strictest confidence and shall not, without the prior express written consent of the Company, be disclosed to any person other than in connection with the Executive’s employment by the Company.  The Executive further acknowledges that such Confidential Information as is acquired and used by the Company or its subsidiaries or affiliates is a special, valuable and unique asset.  The Executive shall exercise all due and diligent precautions to protect the integrity of the Company’s Confidential Information and to keep it confidential whether it is in written form, on electronic media, oral, or otherwise.  The Executive shall not copy any Confidential Information except to the extent necessary to his employment nor remove any Confidential Information or copies thereof from the Company’s premises except to the extent necessary to his employment.  All records, files, materials and other Confidential Information obtained by the Executive in the course of his employment with the Company are confidential and proprietary and shall remain the exclusive property of the Company, its Customers, or subjects, as the case may be.  The Executive shall not, except in connection with and as required by his performance of his duties under this Agreement, for any reason use for his

9

own benefit or the benefit of any person or entity other than the Company or disclose any such Confidential Information to any person, firm, corporation, association or other entity for any reason or purpose whatsoever without the prior express written consent of an executive officer of the Company (excluding the Executive).

10.

Equitable Relief.

(a)

The Company and the Executive recognize that the services to be rendered under this Agreement by the Executive are special, unique and of extraordinary character, and that in the event of the breach by the Executive of the terms and conditions of this Agreement or if the Executive, without the prior express consent of the Board, shall leave his employment for any reason and take any action in violation of Section 8 and/or Section 9, the Company shall be entitled to institute and prosecute proceedings in any court of competent jurisdiction referred to in Section 10(b) below, to enjoin the Executive from breaching the provisions of Section 8 and/or Section 9.  In such action, the Company shall not be required to plead or prove irreparable harm or lack of an adequate remedy at law or post a bond or any security.

(b)

Any action must be commenced in Palm Beach County, Florida.  The Executive and the Company irrevocably and unconditionally submit to the exclusive jurisdiction of such courts and agree to take any and all future action necessary to submit to the jurisdiction of such courts.  The Executive and the Company irrevocably waive any objection that they now have or hereafter may have to the laying of venue of any suit, action or proceeding brought in any such court and further irrevocably waive any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Final judgment against the Executive or the Company in any such suit shall be conclusive and may be enforced in other jurisdictions by suit on the judgment, a certified or true copy of which shall be conclusive evidence of the fact and the amount of any liability of the Executive or the Company therein described, or by appropriate proceedings under any applicable treaty or otherwise.

11.

Conflicts of Interest.  While employed by the Company, the Executive shall not, unless approved by the Compensation Committee, directly or indirectly:

(a)

participate as an individual in any way in the benefits of transactions with any of the Company’s suppliers, vendors, Customers, or subjects, including, without limitation, having a financial interest in the Company’s suppliers, vendors, Customers, or subjects, or making loans to, or receiving loans, from, the Company’s suppliers, vendors, Customers, or subjects;

(b)

realize a personal gain or advantage from a transaction in which the Company has an interest or use information obtained in connection with the Executive’s employment with the Company for the Executive’s personal advantage or gain; or

(c)

accept any offer to serve as an officer, director, partner, consultant, manager with, or to be employed in a professional, medical, technical, or managerial capacity by, a person or entity which does business with the Company.

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Notwithstanding anything in this Agreement to the contrary, the Company acknowledges and agrees that the Executive currently has and may continue to maintain an ownership interest in TFISA, LLC.  

12.

Inventions, Ideas, Processes, and Designs.  All inventions, ideas, processes, programs, software, and designs (including all improvements) (i) conceived or made by the Executive during the course of his  employment with the Company (whether or not actually conceived during regular business hours) and for a period of six months subsequent to the termination (whether by expiration of the Term or otherwise) of such employment with the Company, and (ii) related to the business of the Company, shall be disclosed in writing promptly to the Company and shall be the sole and exclusive property of the Company, and the Executive hereby assigns any such inventions to the Company.  An invention, idea, process, program, software, or design (including an improvement) shall be deemed related to the business of the Company if (a) it was made with the Company’s funds, personnel, equipment, supplies, facilities, or Confidential Information, (b) results from work performed by the Executive for the Company, or (c) pertains to the current business or demonstrably anticipated research or development work of the Company.  The Executive shall cooperate with the Company and its attorneys in the preparation of patent and copyright applications for such developments and, upon request, shall promptly assign all such inventions, ideas, processes, and designs to the Company.  The decision to file for patent or copyright protection or to maintain such development as a trade secret, or otherwise, shall be in the sole discretion of the Company, and the Executive shall be bound by such decision.  If applicable, the Executive shall provide as a schedule to this Agreement, a complete list of all inventions, ideas, processes, and designs, if any, patented or unpatented, copyrighted or otherwise, or non-copyrighted, including a brief description, which he made or conceived prior to his  employment with the Company and which therefore are excluded from the scope of this Agreement. References to the Company in this Section 12 shall include the Company, its subsidiaries and affiliates.

13.

Indebtedness.  If, during the course of the Executive’s employment under this Agreement, the Executive becomes indebted to the Company for any reason, the Company may, if it so elects, and if permitted by applicable law, set off any sum due to the Company from the Executive and collect any remaining balance from the Executive unless the Executive has entered into a written agreement with the Company.

14.

Assignability.  The rights and obligations of the Company under this Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company, provided that such successor or assign shall acquire all or substantially all of the securities or assets and business of the Company.  The Executive’s obligations hereunder may not be assigned or alienated and any attempt to do so by the Executive will be void.

15.

Severability.

(a)

The Executive expressly agrees that the character, duration and geographical scope of the non-competition provisions set forth in this Agreement are reasonable in light of the circumstances as they exist on the date hereof.  Should a decision, however, be made at a later date by a court of competent jurisdiction that the character, duration or geographical scope of such provisions is unreasonable, then it is the intention and the agreement

11

of the Executive and the Company that this Agreement shall be construed by the court in such a manner as to impose only those restrictions on the Executive’s conduct that are reasonable in the light of the circumstances and as are necessary to assure to the Company the benefits of this Agreement.  If, in any judicial proceeding, a court shall refuse to enforce all of the separate covenants deemed included herein because taken together they are more extensive than necessary to assure to the Company the intended benefits of this Agreement, it is expressly understood and agreed by the parties hereto that the provisions of this Agreement that, if eliminated, would permit the remaining separate provisions to be enforced in such proceeding shall be deemed eliminated, for the purposes of such proceeding, from this Agreement.

(b)

If any provision of this Agreement otherwise is deemed to be invalid or unenforceable or is prohibited by the laws of the state or jurisdiction where it is to be performed, this Agreement shall be considered divisible as to such provision and such provision shall be inoperative in such state or jurisdiction and shall not be part of the consideration moving from either of the parties to the other.  The remaining provisions of this Agreement shall be valid and binding and of like effect as though such provisions were not included.

16.

Notices and Addresses.  All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted delivery, or next business day delivery, or by facsimile or e-mail delivery (in which event a copy shall immediately be sent by FedEx or similar receipted delivery), as follows:

To the Company:

Michael J. Cordani

Chief Executive Officer

GelTech Solutions, Inc.

1460 Park Lane South, Suite 1

Jupiter, FL 33458

Email: mcordani@geltechsolutions.com

Facsimile:  (561) 427-6182

With a Copy to:

Pillsbury Winthrop Shaw Pittman LLP

Attn:  Stephen R. Rusmisel

1540 Broadway

New York, NY 10036

Email:  Stephen.rusmisel@pillsburylaw.com

To the Executive:

Jerome B. Eisenberg

1500 South Ocean Boulevard

Boca Raton, FL 33432

Email:  jerryeisenberg@cs.com

Facsimile:  ________________________

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or to such other address or facsimile number, as either of them, by notice to the other may designate from time to time.  The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of successful facsimile delivery.

17.

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

18.

Attorneys’ Fees.  

(a)

Review of the Agreement.  The Company shall pay or the Executive shall be reimbursed for the Executive’s reasonable legal fees incurred in reviewing and negotiating this Agreement, up to a maximum of $7,000.00, provided that any such payment shall be made no later than March 15 of the calendar year immediately following the date hereof.

(b)

Controversy or Claim.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and expenses (including such fees and costs on appeal).

19.

Governing Law.  This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided therein or performance shall be governed or interpreted according to the internal laws of the State of Delaware without regard to choice of law considerations.

20.

Entire Agreement.  This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof.  Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against which enforcement or the change, waiver discharge or termination is sought.

21.

Section and Paragraph Headings.  The section and paragraph headings in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

22.

Arbitration.  Except for a claim for equitable relief or as otherwise described in this Agreement, any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in Palm Beach County, Florida, before one arbitrator in accordance with the rules of the American Arbitration Association then in effect.  In any such arbitration proceeding the parties agree to provide all discovery deemed necessary by the arbitrator.  The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof.

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23.

Sarbanes-Oxley Act of 2002.

(a)

In the event the Executive or the Company is the subject of an investigation (whether criminal, civil, or administrative) involving possible violations of the United States federal securities laws by the Executive, the Compensation Committee or the Board may, in its sole discretion, direct the Company to withhold any and all payments to the Executive (whether compensation or otherwise) which would have otherwise been made pursuant to this Agreement or otherwise would have been paid or payable by the Company, which the Compensation Committee or the Board believes, in its sole discretion, may or could be considered an “extraordinary payment” and therefore at risk and potentially subject to, the provisions of Section 1103 of the Sarbanes-Oxley Act of 2002 (“SOX”) (including, but not limited to, any severance payments made to the Executive upon termination of employment).  The withholding of any payment shall be until such time as the investigation is concluded, without charges having been brought or until the successful conclusion of any legal proceedings brought in connection with such amounts as directed by the Compensation Committee or the Board to be withheld with or without the accruing of interest (and if with interest the rate thereof).  Except by an admission of wrongdoing or the final adjudication by a court or administrative agency finding the Executive liable for or guilty of violating any of the federal securities laws, rules or regulations, the Compensation Committee or the Board shall pay to the Executive such compensation or other payments.  Notwithstanding the exclusion caused by the first clause of the prior sentence, the Executive shall receive such payments if provided for by a court or other administrative order.

(b)

In the event that the Company restates any financial statements which have been contained in reports or registration statements filed with the SEC, and the restatement of the prior financial statements is as the result of material noncompliance with any financial reporting requirement under the securities laws, the Executive hereby acknowledges that the Company shall recover from the Executive (i) incentive-based compensation (including stock options) awarded during the three year period preceding the date on which the Company is required to prepare the restatement (ii) in excess of what would have been paid the Executive under the restatement.  This Section 23(b) shall be interpreted and administered in a manner consistent with any rules issued by the Securities and Exchange Commission under Section 10D of the Securities Exchange Act of 1934 (added by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) to the extent applicable. The Executive agrees to reimburse the Company for any bonuses received and/or profits realized from the sale of the Company’s securities (including the cash received from exercise of any options (or other awards of stock rights) during the 12-month period following the first public issuance or filing with the SEC of the report or registration statement (whichever comes first) containing the financial information required to be restated; provided, however, that this sentence shall not impose any liability on the Executive beyond any liability that is imposed under Section 304 of SOX.

(c)

Notwithstanding the provisions of Section 23(b), if the Company’s common stock is listed on a national securities exchange and such exchange adopts rules requiring clawbacks beyond what Section 10D of the Securities Exchange Act of 1934 or Section 304 of SOX requires, such rules shall be incorporated in this Agreement to the extent applicable and the Executive shall comply with such rules, including but not limited to executing any amendment to this Agreement.

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24.

Section 409A.

(a)

Notwithstanding anything to the contrary contained in this Agreement, if at the time of the Executive’s separation from service within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20% additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of (i) six months and one day after the Executive’s separation from service, or (ii) the Executive’s death (the “Six Month Delay Rule”).

(b)

For purposes of this Section 24, amounts payable under the Agreement should not be considered a deferral of compensation subject to Section 409A to the extent provided in Treasury Regulation Section 1.409A-1(b)(4) (i.e., short-term deferrals), Treasury Regulation Section 1.409A-1(b)(9) (i.e., separation pay plans, including the exception under subparagraph (iii)), and other applicable provisions of Treasury Regulations Sections 1.409A-1 through A-6.

(c)

To the extent that the Six Month Delay Rule applies to payments otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the application of the Six Month Delay Rule, and the balance of the installments shall be payable in accordance with their original schedule.

(d)

To the extent that the Six Month Delay Rule applies to the provision of benefits (including, but not limited to, life insurance and medical insurance), such benefit coverage shall nonetheless be provided to the Executive during the first six months following his separation from service (the “Six Month Period”), provided that, during such Six-Month Period, the Executive pays to the Company, on a monthly basis in advance, an amount equal to the Monthly Cost (as defined below) of such benefit coverage. The Company shall reimburse the Executive for any such payments made by the Executive in a lump sum not later than 30 days following the sixth month anniversary of the Executive’s separation from service. For purposes of this subparagraph, “Monthly Cost” means the minimum dollar amount which, if paid by the Executive on a monthly basis in advance, results in the Executive not being required to recognize any federal income tax on receipt of the benefit coverage during the Six Month Period.

(e)

The parties intend that this Agreement will be administered in accordance with Section 409A of the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

15

(f)

The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of the Code but do not satisfy an exemption from, or the conditions of, such Section.

Signature Page To Follow

16

IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the date and year first above written.

	GelTech Solutions, Inc.
	By	/s/ Michael J. Cordani
Date		Michael J. Cordani Chief Executive Officer

	Executive:
		/s/ Jerome B. Eisenberg
Date		Jerome B. Eisenberg Executive Chairman

AGREEMENT AND GENERAL RELEASE

THIS AGREEMENT AND GENERAL RELEASE (the “Agreement”) is made and entered into on ______________ , 201_, by and between ___________ (“Employee”) and GelTech Solutions, Inc. (“Employer”).

WHEREAS, Employee formerly was employed by Employer;

WHEREAS, the parties wish to resolve all outstanding claims and disputes between them in an amicable manner;

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements set forth in this Agreement, the sufficiency of which the parties acknowledge, it is agreed as follows:

1.

In consideration for Employee’s promises in this Agreement, Employer agrees to pay Employee a total of _______________ Dollars ($__________), minus standard payroll tax deductions.  Employee would not otherwise be entitled to this payment but for his/her promises in this Agreement.  The payment will be disbursed to Employee within ten (10) business days following Employer’s receipt of this Agreement executed by Employee.

2.

The parties agree that the payment in Section 1 is in full, final and complete settlement of all claims Employee may have against Employer, its past and present affiliates, officers, directors, owners, employees, agents, successors and assigns.

3.

Nothing in this Agreement shall be construed as an admission of liability by Employer, its past and present affiliates, officers, directors, owners, employees or agents, and Employer specifically disclaims liability to or wrongful treatment of Employee on the part of itself, its past and present affiliates, officers, directors, owners, employees and agents.

4.

Employee represents that he/she has not filed any complaints or charges against Employer with the Equal Employment Opportunity Commission, or with any other federal, state or local agency or court, and covenants that he/she will not seek to recover on any claim released in this Agreement.

5.

Employee agrees that he/she will not encourage or assist any of Employer’s employees to litigate claims or file administrative charges against Employer or its past and present affiliates, officers, directors, owners, employees and agents, unless required to provide testimony or documents pursuant to a lawful subpoena or other compulsory legal process.

6.

Employee covenants not to sue, and fully and forever releases and discharges Employer, its past and present affiliates, directors, officers, owners, employees and agents, as well as its successors and assigns (collectively, the “Releasees”) from any and all legally waivable claims, liabilities, damages, demands, and causes of action or liabilities of any nature or kind, whether now known or unknown, arising out of or in any way connected with Employee’s employment with Employer or the termination of that employment; provided, however, that nothing in this Agreement shall either waive any rights or claims of Employee that arise after

Employee signs this Agreement or impair or preclude Employee’s right to take action to enforce the terms of this Agreement.  This release includes but is not limited to claims arising under federal, state or local laws prohibiting employment discrimination or relating to leave from employment, including but not limited to Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as amended, the Equal Pay Act and the Americans with Disabilities Act, as amended, the Family and Medical Leave Act, as amended, claims for attorneys’ fees or costs, and any and all claims in contract, tort, or premised on any other legal theory. Employee acknowledges that Employee has been paid in full all compensation owed to Employee by Employer as a result of Employee’s employment.

7.

Employee acknowledges that all confidential information regarding Employer’s business compiled, created or obtained by, or furnished to, Employee during the course of or in connection with his/her employment with Employer is Employer’s exclusive property.  Upon or before execution of this Agreement, Employee will return to Employer all originals and copies of any material containing confidential information and Employee further agrees that he/she will not, directly or indirectly, use or disclose such information.  Employee will also return to Employer upon or before execution of this Agreement any other items in his/her possession, custody or control that are the property of Employer, including, but not limited to, his/her files, PDA, credit cards, identification card, flash drives, passwords and office keys.

8.

Employee acknowledges that he/she has been given at least twenty-one (21) days to consider this Agreement and that he/she has seven (7) days from the date he/she executes this Agreement in which to revoke it and that this Agreement will not be effective or enforceable nor the amounts set forth in Section 1 paid until after the seven-day revocation period ends without revocation by Employee.  Revocation can be made by delivery of a written notice of revocation to [name/title/address], by midnight on or before the seventh calendar day after Employee signs the Agreement.

9.

Employee acknowledges that he/she has been advised to consult with an attorney of his/her choice with regard to this Agreement.  Employee hereby acknowledges that he/she understands the significance of this Agreement, and represents that the terms of this Agreement are fully understood and voluntarily accepted by him/her.

10.

Employee agrees that he/she will treat the existence and terms of this Agreement as confidential and will not discuss the Agreement with anyone other than:  (i) his/her counsel or tax advisor as necessary to secure their professional advice, (ii) his/her spouse, or (iii) as may be required by law.

11.

Employee agrees to refrain from making any unfavorable comments, in writing or orally, about Employer, its operations, policies, or procedures, or about the Releasees; provided, however, that nothing herein shall preclude Employee from responding truthfully to a lawful subpoena or other compulsory legal process or from providing truthful information otherwise required by law.

2

12.

In the event of any lawsuit against Employer that relates to alleged acts or omissions by Employee during his/her employment with Employer, Employee agrees to cooperate with Employer by voluntarily providing truthful and full information as reasonably necessary for Employer to defend against such lawsuit.

13.

This Agreement shall be binding on Employer and Employee and upon their respective heirs, representatives, successors and assigns, and shall run to the benefit of the Releasees and each of them and to their respective heirs, representatives, successors and assigns.

14.

This Agreement sets forth the entire agreement between Employee and Employer, and fully supersedes any and all prior agreements or understandings between them regarding its subject matter; provided, however, that nothing in this Agreement is intended to or shall be construed to modify, impair or terminate any obligation of Employee pursuant to provisions of Employee’s Employment Agreement dated _________ that by their terms continues after Employee’s separation from Employer’s employment.  This Agreement may only be modified by written agreement signed by both parties.

15.

Employer and Employee agree that in the event any provision of this Agreement is deemed to be invalid or unenforceable by any court or administrative agency of competent jurisdiction, or in the event that any provision cannot be modified so as to be valid and enforceable, then that provision shall be deemed severed from the Agreement and the remainder of the Agreement shall remain in full force and effect.

16.

Employee agrees that his/her compliance with Sections 7, 10, 11, and 12 of this Agreement are material to this Agreement and that, in the event of breach by Employee of his/her obligations under those Sections, Employer shall be entitled to withhold or recover all but $100.00 of the amounts paid or payable to Employee under Section 1 of this Agreement, which Employee agrees shall constitute sufficient and adequate consideration for his/her promises in the Agreement, including without limitation his/her undertakings pursuant to Section 6 of this Agreement.

17.

This Agreement in all respects shall be interpreted and entered under the laws of the State of Florida.  The language of all parts of this Agreement in all cases shall be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties.

3

PLEASE READ CAREFULLY.  THIS AGREEMENT AND GENERAL RELEASE INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS.

Dated:  _________________________		______________________________________
		[EMPLOYEE]
Dated:  _________________________		GelTech Solutions, Inc.
	By:	______________________________________

4

EX-10.6

Exhibit 10.6

RESTRICTED STOCK UNIT AGREEMENT

This Restricted Stock Unit Agreement (this “Agreement”), entered into as of November 14, 2012 (the “Grant Date”), sets forth the terms and conditions of an award (this “Award”) of restricted stock units (“Units”) granted by GelTech Solutions, Inc., a Delaware corporation (the “Company”), to Jerome B. Eisenberg (the “Recipient”) under the 2007 Equity Incentive Plan (the “Plan”).

1.

The Plan. This Award is made pursuant to the Plan, the terms of which are incorporated in this Agreement.  Capitalized terms used in this Agreement that are not defined in this Agreement have the meanings as used or defined in the Plan.  The Recipient hereby acknowledges receipt of the Plan.  

2.

Award. On the Grant Date, the Recipient was granted 800,000 Units.  Any certificates issued upon vesting of the Units shall contain an appropriate restrictive legend.  The Units were issued in connection with that certain Employment Agreement dated as of October 1, 2012 between the Recipient and the Company (the “Employment Agreement”).

3.

Vesting/Forfeiture.

(a)

The Units shall vest as provided for on Schedule A, subject to the Recipient continuing to perform services for the Company as an employee on each applicable vesting date.  Vested Units shall be paid out in the form of shares of the Company’s common stock (“Common Stock”) as soon as practicable but no later than 30 days following each vesting date.  The Company will issue to the Recipient, in settlement of the Units and subject to the provisions of Section 9 below, the number of whole shares of Common Stock that equals the number of whole Units that become vested (less any shares of Common Stock withheld to satisfy applicable tax withholding requirements), and the vested Units will cease to be outstanding upon your receipt of such shares of Common Stock. No fractional shares will be issued in settlement of Units.  The Units shall fully vest upon a Change of Control or the Recipient’s employment is terminated without Cause, with Good Reason, or by reason of the Recipient’s death or disability.  The preceding sentence shall be subject to the Employment Agreement and the defined terms, if not defined herein, shall have the meanings as defined in the Employment Agreement.  

(b)

Notwithstanding any other provision of this Agreement, all Units and shares of Common Stock subject to this Agreement, whether vested or unvested, may be immediately forfeited in the event the following events occur:

(1)

The Recipient is dismissed as an employee based upon fraud, theft, or dishonesty related to the business of the Company, which is reflected in a written or electronic notice given to the employee;

(2)

The Recipient purchases or sells securities of the Company in violation of the Company’s insider trading guidelines then in effect;

(3)

The Recipient breaches any duty of confidentiality as set forth in Section 9 of the Employment Agreement;  

(4)

The Recipient competes with the Company during a period of one year following termination of employment by soliciting customers located within or otherwise where the Company is doing business within any state, or where the Company expects to do business within three months following termination and, in this later event, the Recipient has actual knowledge of such plans;

(5)

The Recipient recruits Company personnel for another entity or business within 12 months following termination of employment;

(6)

The Recipient fails to assign any invention, technology, or related intellectual property rights to the Company, which was conceived or made by the Recipient during his employment with the Company, if such assignment is a condition of any agreement between the Company and the Recipient; or

(7)

The Recipient refuses to carry out a resolution adopted by the Company’s Board at a meeting in which the Recipient was offered a reasonable opportunity to argue that the resolution should not be adopted.  

Notwithstanding the preceding, the Company shall notify the Recipient of its determination to enforce this Section 3(b) and the Recipient shall have the right to cure the Section 3(b) event, if such event can be cured, within 30 days of such notice.  This Section 3(b) and Section 4 shall no longer remain in effect after the occurrence of a Change of Control.  

4.

Profits on the Sale of Certain Shares; Cancellation.  If any of the events specified in Section 3(b) of this Agreement occur within one year following the date the Recipient last performed services as an employee of the Company (the “Termination Date”) (or such longer period required by any written employment agreement), all profits earned from the Recipient’s sale of the Company’s Common Stock during the two-year period commencing one year prior to the Termination Date shall be forfeited and forthwith paid by the Recipient to the Company.  Further, in such event, the Company may at its option cancel the Unit and/or the Common Stock granted under this Agreement.  The Company’s rights under this Section do not lapse one year from the Termination Date but are a contract right subject to any appropriate statutory limitation period.

5.

Rights.  The Recipient will receive no benefit or adjustment to the Units with respect to any cash or stock dividend, or other distributions except as provided for in the Plan.  Further, the Recipient will have no voting rights with respect to the Units until the shares of Common Stock are issued.

6.

Restriction on Transfer.  The Recipient shall not sell, transfer, pledge, hypothecate or otherwise dispose of any Units prior to the applicable vesting date.  

7.  

Reservation of Right to Terminate Relationship.  Nothing contained in this Agreement shall restrict the right of the Company to terminate the relationship of the Recipient at any time, with or without cause.  

8.  

Securities.  If a Registration Statement on Form S-8 (or any other successor form) is not effective as to the shares of Common Stock issuable upon vesting of the Units, the remainder of this Section 8 is applicable as to federal law.  In order to enable the Company to comply with the Securities Act of 1933 (the “Securities Act”) and relevant state law, the Company may require the Recipient, the Recipient’s estate, or any permitted transferee as a condition of issuing the Common Stock, to give written assurance satisfactory to the Company that the shares subject to the Units are being acquired for such person’s own account, for investment only, with no view to the distribution of same, and that any subsequent resale of any such shares either shall be made pursuant to a registration statement under the Securities Act and applicable state law which has become effective and is current with regard to the shares being sold, or shall be pursuant to an exemption from registration under the Securities Act and applicable state law.

The Units and the underlying shares of Common Stock are further subject to the requirement that, if at any time the Board shall determine, in its discretion, that the listing, registration, or qualification of the shares of Common Stock underlying the Units upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with the issuance of the Common Stock, the Common Stock will not be issued unless such listing, registration, qualification, consent or approval shall have been effected.  

9.

Tax Withholding.  The Recipient acknowledges and agrees that the Company may require the Recipient to pay, or may withhold from sums owed by the Company to the Recipient, any amount necessary to comply with the minimum applicable withholding requirements that the Company deems necessary to comply with any federal, state or local withholding requirements for income and employment tax purposes.  

10. 

No Obligation to Minimize Taxes. The Company has no duty or obligation to minimize the tax consequences of this Award to the Recipient and will not be liable to the Recipient for any adverse tax consequences arising in connection with this Award.  The Recipient has been advised to consult with his own personal tax, financial and/or legal advisors regarding the tax consequences of this Award.

11.

409A Compliance. The provisions of this Agreement and the issuance of the shares of Common Stock in respect of the Units is intended to comply with the short-term deferral exception as specified in Treas. Reg. § 1.409A-l(b)(4).

12

Notices and Addresses.  All notices, offers, acceptance and any other acts under this  Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar overnight next business day delivery, or by facsimile delivery followed by overnight next day delivery, as follows:

The Recipient:

Jerome Eisenberg

_________________

_________________

Facsimile: (___) ___________

The Company:

GelTech Solutions, Inc.

1460 Park Lane South, Suite 1

Jupiter, FL 33458

Attention: Michael Cordani

Facsimile: (561) 427-6182

with a copy to:

Michael D. Harris, Esq.

Nason, Yeager, Gerson, White & Lioce P.A.

1645 Palm Beach Lakes Blvd., Suite 1200

West Palm Beach, FL 33401

Facsimile:  (561) 471-0894

or to such other address as either of them, by notice to the other may designate from time to time.  The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of successful facsimile delivery.  Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.

13.

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.  

14.

Attorney’s Fees.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to a reasonable attorney’s fee, costs and expenses.

15.

Severability.  If any term or condition of this Agreement shall be invalid or unenforceable to any extent or in any application, then the remainder of this Agreement, and such term or condition except to such extent or in such application, shall not be affected hereby and each and every term and condition of this Agreement shall be valid and enforced to the fullest extent and in the broadest application permitted by law.  

16.

Entire Agreement.  This Agreement represents the entire agreement and understanding between the parties and supersedes all prior negotiations, understandings, representations (if any), and agreements made by and between the parties.  Each party specifically acknowledges, represents and warrants that they have not been induced to sign this Agreement.

17. 

Governing Law. This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided therein or performance shall be governed or interpreted according to the internal laws of the State of Delaware without regard to choice of law considerations.  

18. 

Headings. The headings in this Agreement are for the purpose of convenience only and are not intended to define or limit the construction of the provisions hereof.

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed and delivered as of the date aforesaid.

WITNESSES:	GELTECH SOLUTIONS, INC.
	By:	/s/ Michael Cordani
		Michael Cordani, Chief Executive Officer
	RECIPIENT
	/s/ Jerome Eisenberg
	Jerome Eisenberg

Schedule A

Vesting Terms

(1) 200,000 vest as of the date of the Agreement;

(2) another 200,000 vest upon the Company generating $3,000,000 in revenues in any 12 month period;

(3) another 200,000 vest upon the Company generating $5,000,000 in revenues in any 12 month period;

(4) another 200,000 vest upon the Company generating $6,000,000 in revenues in any 12 month period;

Provided however, that none of the Units under (2)-(4) above may vest until at least one year from the Grant Date.  

EX-10.7

Exhibit 10.7

STOCK APPRECIATION RIGHTS AGREEMENT

THIS STOCK APPRECIATION RIGHTS AGREEMENT (the “Agreement”) entered into as of October 1, 2012 (the “Grant Date”) between GelTech Solutions, Inc. (the “Company”) and __________ (the “Recipient”).

WHEREAS, by action taken by the Board of Directors (the “Board”) it has adopted the 2007 Equity Incentive Plan (the “Plan”); and

WHEREAS, pursuant to the Plan, it has been determined that in order to enhance the ability of the Company to attract and retain qualified employees, consultants and directors, the Company has granted the Recipient the stock appreciation rights.    

NOW THEREFORE, in consideration of the mutual covenants and promises hereafter set forth and for other good and valuable consideration, receipt of which is acknowledged, the parties hereto agree as follows:

1.

Grant of SARs.  The Company irrevocably granted to the Recipient, as a matter of separate agreement and not in lieu of salary or other compensation for services, the right to exercise all or any part of 200,000 stock settled stock appreciation rights into shares of authorized but unissued or treasury common stock of the Company (the “SARs”) on the terms and conditions herein set forth.  This Agreement replaces any other agreement or offer letter previously provided to the Recipient, if any, with respect to these SARs.  The Recipient acknowledges receipt of a copy of the Plan, as amended.

2.

Price.  The exercise price of the SARs is $0.45 per share.

3.

Vesting - When Exercisable.  

(a)

The SARs shall vest as described on Schedule A of this Agreement, subject to the Recipient’s continued employment with the Company on each applicable vesting date.  Any fractional vesting shall be rounded up to the extent necessary.  Notwithstanding any other provision in this Agreement, the SARs shall vest immediately on the occurrence of a Change of Control, as defined under the Plan (a “Triggering Event”); provided, however, that there shall be no immediate vesting under romanette (ii) of the definition of Change of Control if the directors serving just prior to the Triggering Event remain the majority of the Board after the Triggering Event. Additionally, all SARs shall vest immediately (subject to the preceding sentence) on the date the Company publicly announces, by press release, by disclosure in a filing with the Securities and Exchange Commission or otherwise (the “Public Announcement”), its intention to sell substantially all of the Company’s assets or to enter into a merger or consolidation as described in clauses (i) and (ii) under the definition of Change of Control in the Plan.  If the Recipient exercises the SARs within 10 calendar days from the date of the Public Announcement, the Recipient shall be deemed a record holder of the shares underlying the SARs as of the record date of the Change of Control.

(b)

Subject to Sections 3(c) and 4 of this Agreement, the vested SARs are exercisable until 6:00 p.m. New York time for 10 years from the Grant Date (the “Expiration Date”).  Upon exercise, in whole or in part, the Recipient shall be entitled to receive from the Company a number of shares of common stock equal to the excess of the Fair Market Value, as defined under the Plan, (on the date of exercise) of one share of common stock over the exercise price, multiplied by the number of SARs being exercised, the product of which shall be divided by the Fair Market Value. For example: if the Fair Market Value is $1.35 and all of the SARs are exercised, then the Recipient shall receive 133,333 shares [($1.35-$0.45)*200,000] / $1.35.  

(c)

Notwithstanding any other provision of this Agreement, at the discretion of the Board or the Compensation Committee (as defined in the Plan), all SARs, whether vested or unvested, will be immediately forfeited if any of the following events occur:

(1)

The Recipient is dismissed as an employee based upon fraud, theft, or dishonesty, which is reflected in a written or electronic notice given to the employee;

(2)

The Recipient purchases or sells securities of the Company in violation of the Company’s insider trading guidelines then in effect;

(3)

The Recipient breaches any duty of confidentiality including that required by the Company’s insider trading guidelines then in effect;

(4)

The Recipient competes with the Company during a period of one year following termination of employment by soliciting customers located within or otherwise where the Company is doing business within any state, or where the Company expects to do business within three months following termination and, in this later event, the Recipient has actual knowledge of such plans;

(5)

The Recipient is unavailable for consultation after termination of the Recipient if such availability is a condition of any agreement between the Company and the Recipient;

(6)

The Recipient recruits Company personnel for another entity or business within 24 months following termination of employment;

(7)

The Recipient fails to assign any invention, technology, or related intellectual property rights to the Company if such assignment is a condition of any agreement between the Company and the Recipient;

(8)

The Recipient acts in a disloyal manner to the Company; or

(9)

A finding by the Board that the Recipient has acted against the interests of the Company.

This Section 3(c) and Section 5 shall no longer remain in effect after the occurrence of a Change of Control.  

4.

Termination of Relationship.

(a)

If for any reason, except death or disability as provided below, the Recipient ceases to act as an employee of the Company, all vested SARs as of the date of the termination of employment may be exercised by the Recipient at any time within three months following termination of employment.

(b)

If the Recipient shall die while an employee of the Company, the Recipient’s estate or any Transferee, as defined herein, shall have the right to exercise the Recipient’s vested SARs within the time provided in the Plan subject to Section 3(c) above.  For the purpose of this Agreement, “Transferee” shall mean a person to whom such shares are transferred by will or by the laws of descent and distribution.  

(c)

If the Recipient becomes disabled, within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, while an employee of the Company, the Recipient shall have the right to exercise the Recipient’s vested SARs within the time provided in the Plan.

(d)

Notwithstanding anything contained in this Section 4, the SARs may not be exercised after the Expiration Date.

(e)

Any of the SARs that were not vested immediately prior to termination of employment shall terminate at that time.

For purposes of this Section 4 “Company” shall include subsidiaries and/or affiliates of the Company.

5.

Profits on the Sale of Certain Shares; Redemption.  If any of the events specified in Section 3(c) of this Agreement occur within one year following the date the Recipient last performed services as an employee of the Company (the “Termination Date”) (or such longer period required by any written employment agreement), all profits earned from the sale of the Company’s securities, including the sale of shares of common stock underlying the SARs, during the two-year period commencing one year prior to the Termination Date shall be forfeited and immediately paid by the Recipient to the Company.  Further, in such event, the Company may at its option redeem shares of common stock acquired upon exercise of this SAR by payment of the exercise price to the Recipient.  To the extent that another written agreement with the Company extends the events in Section 3(c) beyond one year following the Termination Date, the two-year period shall be extended by an equal number of days.  The Company’s rights under this Section 5 do not lapse one year from the Termination Date but are a contract right subject to any appropriate statutory limitation period.

6.

Method of Exercise.  The SARs shall be exercisable by a written notice, in the form of the attached Notice of Exercise, which shall:

(a)  

state the election to exercise the SARs, the number of shares to be exercised, the person in whose name the stock certificate or certificates for such shares of common stock is to be registered, address and social security number of such person (or if more than one, the names, addresses and social security numbers of such persons);

(b)  

if applicable, contain such representations and agreements as to the holder’s investment intent with respect to such shares of common stock as set forth in Section 11 hereof;

(c)  

be signed by the person or persons entitled to exercise the SARs and, if the SARs are being exercised by any person or persons other than the Recipient, be accompanied by proof, satisfactory to counsel for the Company, of the right of such person or persons to exercise the SARs;

(d)

be accompanied by payment of any amount that the Company, in its sole discretion, deems necessary to comply with any federal, state or local withholding requirements for income and employment tax purposes.  If the Recipient fails to make such payment in a timely manner, the Company may: (i) decline to permit exercise of the SARs or (ii) withhold and set-off against compensation and any other amounts payable to the Recipient the amount of such required payment. Such withholding may be in the shares underlying the SARs at the sole discretion of the Company.

The certificate or certificates for shares of common stock as to which the SARs shall be exercised shall be registered in the name of the person or persons exercising the SARs.

7.

Sale of Shares Acquired Upon Exercise of SARs.  If the Recipient is an officer (as defined by Section 16(b) of the Securities Exchange Act of 1934 (“Section 16(b)”)) or a director of the Company, any shares of the Company’s common stock acquired pursuant to the SARs cannot be sold by the Recipient until at least six months elapse from the Grant Date except in case of death or disability or if the grant was exempt from the short-swing profit provisions of Section 16(b).

8.

Anti-Dilution Provisions.  The SARs granted hereunder shall have the anti-dilution rights set forth in the Plan.

9.

Necessity to Become Holder of Record.  Neither the Recipient, the Recipient’s estate, nor any Transferee shall have any rights as a shareholder with respect to any of the shares underlying the SARs until such person shall have become the holder of record of such shares.  No cash dividends or cash distributions, ordinary or extraordinary, shall be provided to the holder if the record date is prior to the date on which such person became the holder of record thereof.

10.  

Reservation of Right to Terminate Relationship.  Nothing contained in this Agreement shall restrict the right of the Company to terminate the relationship of the Recipient at any time, with or without cause.  

11.  

Conditions to Exercise of SARs.  If a Registration Statement on Form S-8 (or any other successor form) is not effective as to the shares of common stock issuable upon exercise of the SARs, the remainder of this Section 11 is applicable as to federal law.  In order to enable the Company to comply with the Securities Act of 1933 (the “Securities Act”) and relevant state law, the Company may require the Recipient, the Recipient’s estate, or any Transferee as a condition of the exercising of the SARs granted hereunder, to give written assurance satisfactory to the Company that the shares subject to the SARs are being acquired for such person’s own account, for investment only, with no view to the distribution of same, and that any subsequent resale of any such shares either shall be made pursuant to a registration statement under the Securities Act and applicable state law which has become effective and is current with regard to the shares being sold, or shall be pursuant to an exemption from registration under the Securities Act and applicable state law.

The SARs are further subject to the requirement that, if at any time the Board shall determine, in its discretion, that the listing, registration, or qualification of the shares of common stock underlying the SARs upon any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with the issue or purchase of shares underlying the SARs, the SARs may not be exercised in whole or in part unless such listing, registration, qualification, consent or approval shall have been effected.  

12.  

Transfer.  No transfer of the SARs by the Recipient by will or by the laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and a copy of the letters testamentary or such other evidence as the Board may deem necessary to establish the authority of the estate and the acceptance by the Transferee or Transferees of the terms and conditions of the SARs.

13.  

Duties of the Company.  The Company will at all times during the term of the SARs:

(a)  

Reserve and keep available for issue such number of shares of its authorized and unissued common stock as will be sufficient to satisfy the requirements of this Agreement;

(b)  

Pay all original issue taxes with respect to the issuance of shares pursuant hereto and all other fees and expenses necessarily incurred by the Company in connection therewith;

(c)  

Use its best efforts to comply with all laws and regulations which, in the opinion of counsel for the Company, shall be applicable thereto.

14.

Parties Bound by Plan.  The Plan and each determination, interpretation or other action made or taken pursuant to the provisions of the Plan shall be final and shall be binding and conclusive for all purposes on the Company and the Recipient and the Recipient’s respective successors in interest.

15.

Severability.  In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.

16.

Arbitration.  Any controversy, dispute or claim arising out of or relating to this Agreement, or its interpretation, application, implementation, breach or enforcement which the parties are unable to resolve by mutual agreement, shall be settled by submission by either party of the controversy, claim or dispute to binding arbitration in Palm Beach County, Florida (unless the parties agree in writing to a different location), before a single arbitrator in accordance with the rules of the American Arbitration Association then in effect.  The decision and award made by the arbitrator shall be final, binding and conclusive on all parties hereto for all purposes, and judgment may be entered thereon in any court having jurisdiction thereof.

17.

Benefit.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.

18.

Notices and Addresses.  All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by FedEx or similar receipted delivery, or by facsimile delivery followed by overnight next day delivery, as follows:

The Recipient:

______________

______________

______________

______________

The Company:

GelTech Solutions, Inc.

1460 Park Lane South, Suite 1

Jupiter, FL 33458

Attention: Michael Cordani

Facsimile: (561) 427-6182

with a copy to:

Michael D. Harris, Esq.

Nason Yeager Gerson White & Lioce, P.A.

1645 Palm Beach Lakes Blvd., Suite 1200

West Palm Beach, FL 33401

Facsimile: (561) 686-5442

or to such other address as either of them, by notice to the other may designate from time to time.  The transmission confirmation receipt from the sender’s facsimile machine shall be evidence of successful facsimile delivery.  Time shall be counted to, or from, as the case may be, the delivery in person or by mailing.

19.

Attorney’s Fees.  In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding is commenced to enforce the provisions of this Agreement, the prevailing party shall be entitled to a reasonable attorney’s fee, costs and expenses.

20.

Governing Law.  This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided herein or performance shall be governed or interpreted according to the laws of the State of Delaware without regard to choice of law considerations.  

21.

Oral Evidence.  This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof.  Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against whom enforcement or the change, waiver discharge or termination is sought.

22.

Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  The execution of this Agreement may be by actual or facsimile signature.

23.

Section or Paragraph Headings.  Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.

24.

Stop-Transfer Orders.  

(a)

The Recipient agrees that, in order to ensure compliance with the restrictions set forth in the Plan and this Agreement, the Company may issue appropriate “stop transfer” instructions to its duly authorized transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(b)

The Company shall not be required (i) to transfer on its books any shares of the Company’s common stock that have been sold or otherwise transferred in violation of any of the provisions of the Plan or the Agreement or (ii) to treat the owner of such shares of common stock or to accord the right to vote or pay dividends to any purchaser or other Transferee to whom such shares of common stock shall have been so transferred.

[Signature Page to Follow]

IN WITNESS WHEREOF the parties hereto have set their hand and seals the day and year first above written.

WITNESSES:	GELTECH SOLUTIONS, INC.
	By:
	RECIPIENT

Schedule A

Stock Appreciation Rights Agreement

(1) 200,000 vest as of the date of the Agreement;

(2) another 200,000 vest upon the Company generating $3,000,000 in revenues in any 12 month period;

(3) another 200,000 vest upon the Company generating $5,000,000 in revenues in any 12 month period;

(4) another 200,000 vest upon the Company generating $6,000,000 in revenues in any 12 month period;

As previously stated in this Agreement, the vesting of the SARs is subject to continued employment on each applicable vesting date.  

NOTICE OF EXERCISE

To:

__________________________

__________________________

__________________________

Attention _________, _______________

Facsimile: (____) _____-______

Please be advised that I hereby elect to exercise my option to exercise ___________ shares of Stock Appreciation Rights, pursuant to the Stock Appreciation Rights Agreement dated ____________, 2012.  Please contact me as soon as possible to discuss the possible payment of withholding taxes and any other documents we may require.   

Name of Holder (Please Print): ________________________________

Address of Holder

________________________________________________________________

Telephone Number of Holder:

________________________________

Social Security Number of Holder:

________________________________

If the certificate is to be issued to person other than the Holder, please provide the following for such person:

________________________________

(Name)

________________________________

(Address)

________________________________

________________________________

________________________________

(Telephone Number)

________________________________

(Social Security Number)

In connection with the issuance of the Common Stock, if the Common Stock may not be immediately publicly sold, I hereby represent to the Company that I am acquiring the Common Stock for my own account for investment and not with a view to, or for resale in connection with, a distribution of the shares within the meaning of the Securities Act of 1933 (the “Securities Act”).

I am______ am not ______ [please initial one] an accredited investor for at least one of the reasons on the attached Exhibit A.  If the SEC has amended the rule defining the definition of accredited investor, I acknowledge that as a condition to exercise the securities, the Company may request updated information regarding the Holder’s status as an accredited investor.  My exercise of the securities shall be in compliance with the applicable exemptions under the Securities Act and applicable state law.

________________________________

Dated: _________________

Signature of Holder

Exhibit A

To Notice of Exercise of Stock Appreciation Rights Agreement

For Individual Investors Only:

1.

A person who has an individual net worth, or a person who with his or her spouse has a combined net worth, in excess of $1,000,000. For purposes of calculating net worth under this paragraph (1), (i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to exercising the securities, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability.

2a.

A person who had individual income (exclusive of any income attributable to the person’s spouse) of more than who has $200,000 in each of the two most recently completed years and who reasonably expects to have an individual income in excess of $200,000 this year.

2b.

Alternatively, a person, who with his or her spouse, has joint income in excess of $300,000 in each applicable year.

3.

A director or executive officer of the Company.

Other Investors:

4.

Any bank as defined in Section 3(a)(2) of the Securities Act of 1933 (“Securities Act”) whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; insurance company as defined in Section 2(13) of the Securities Act; investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; employee benefit plan within the meaning of Title I of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

5.

A private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940.

6.

An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000.  

7.

A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the Securities Act.

8.

An entity in which all of the equity owners are accredited investors.

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Michael Cordani, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of GelTech Solutions, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 11, 2013

/s/ Michael Cordani

Michael Cordani

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Michael Hull, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of GelTech Solutions, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: February 11, 2013

/s/ Michael Hull

Michael Hull

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of GelTech Solutions, Inc. (the “Company”) on Form 10-Q for the quarter ending December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof, I, Michael Cordani, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.

The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

2.

The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael Cordani

Michael Cordani

Chief Executive Officer

(Principal Executive Officer)

Dated: February 11, 2013

In connection with the quarterly report of GelTech Solutions, Inc. (the “Company”) on Form 10-Q for the quarter ending December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof, I, Michael Hull, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.

The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

2.

The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Michael Hull

Michael Hull

Chief Financial Officer

(Principal Financial Officer)

Dated: February 11, 2013

XML

Commitments and Contingencies (Details) (USD $)	0 Months Ended	3 Months Ended	6 Months Ended						0 Months Ended			1 Months Ended
	Feb. 08, 2013	Dec. 31, 2012	Dec. 31, 2012	Dec. 31, 2011	Nov. 14, 2012	Jun. 30, 2012	Aug. 31, 2011	Mar. 31, 2011	Nov. 14, 2012 3,000,000 in Revenue in any 12-Month Period [Member]	Nov. 14, 2012 5,000,000 in Revenue in any 12-Month Period [Member]	Nov. 14, 2012 6,000,000 in Revenue in any 12-Month Period [Member]	Nov. 30, 2012 Loss Contingency Invasion Of Privacy And Misrepresentation [Member]	Jul. 31, 2012 Loss Contingency Invasion Of Privacy And Misrepresentation [Member]	Jul. 31, 2012 Loss Contingency Breach Of Agreement [Member]	Jul. 31, 2012 Loss Contingency Trespass Claim [Member]	Jul. 31, 2012 Loss Contingency Civil Theft [Member]	Jul. 31, 2012 Loss Contingency Civil Theft Law Enforced Settlement [Member]
Commitments and Contingencies [Abstract]
Rent expense			$ 53,479	$ 67,312
Loss Contingencies [Line Items]
Litigation accrual		1,446,000	1,446,000			1,646,000
Litigation, provision													200,000	841,000	5,000	200,000	600,000
Loss contingency potentially paid by insurance												200,000
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted	112,500
Granted, exercise price	$ 0.39
Operating revenues									3,000,000	5,000,000	6,000,000
Stock options vested during period					200,000				200,000	200,000	200,000
Annual base salary executive							146,000	150,000	170,000	190,000	200,000
Monthly car allowance		$ 600

XML

Stockholders' Equity

6 Months Ended

Dec. 31, 2012

Stockholders' Equity [Abstract]

Stockholders' Equity

NOTE 4 - Stockholders' Equity

Preferred Stock

The Company has authorized 5,000,000 shares of preferred stock, par value $0.001 per share with such rights, preferences and limitation as may be set from time to time by resolution of the board of directors and the filing of a certificate of designation as required by Delaware General Corporation Law.

Common Stock

The issuances of common stock during the six months ended December 31, 2012 were as follows:

During the six months ended December 31, 2012, the Company has issued 1,333,820 shares of common stock in exchange for $810,003 in connection with the Purchase Agreement with Lincoln Park Capital.

In August 2012, the Company issued 256,000 shares of common stock in exchange for $128,000 in connection with private placement transactions with two accredited investors.

In September 2012, the Company issued 1,740,000 shares of common stock in exchange for $870,000 in connection with the exercise of 1,640,000 warrants and 100,000 options to purchase shares of the Company's common stock related to an offer by the Company to reduce the exercise price to $0.50 per share. The original exercise prices of the warrants and options ranged from $1.25 to $1.75 per share. The cost of repricing warrants recognized by the Company amounted to $70,491 for the three months ended September 30, 2012. The cost represents the incremental increase in the fair value of the repriced warrants and options as compared to the original warrants and options granted, valued on the exercise date. The fair value of the warrants and options was determined using the Black-Scholes option pricing model. In October 2012, the Company issued 80,000 shares of common in exchange for $40,000 in connection with the exercise of warrants at $0.50 per share.

In September 2012, our principal shareholder converted his $322,996 convertible original issue discount note which was due on September 28, 2012 into 665,992 shares of common stock.

Options and Stock Appreciation Rights to Purchase Common Stock

Stock-based compensation expense recognized under ASC 718-10 for the period July 1, 2012 to December 31, 2012 was $990,559 for stock options and stock appreciation rights granted to employees, directors and a consultant. This expense is included in selling, general and administrative expenses in the unaudited condensed 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 December 31, 2012, the total compensation cost for stock options and stock appreciation rights not yet recognized was approximately $1,734, 037. This cost will be recognized over the remaining vesting term of the options and stock appreciation rights of approximately three years.

Restricted Stock Units

The Company recognized stock-based compensation expense of $90,000 related to vested restricted stock units granted to the Company's Executive Chairman. Stock based compensation expense not yet recognized related to restricted stock units amounted to $270,000 at December 31, 2012. This cost will be recognized over the remaining vesting term of the restricted stock units of approximately three years.

A summary of transactions for all employee stock options and stock appreciation rights for the six month periods ended December 31, 2012 and 2011 is as follows:

Employee Options and Stock Appreciation Rights

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		4,439,507		$	1.12		6.40
Granted		675,000		$	1.06		-
Exercised		-		$	-		-
Forfeited		-		$	-
Expired		(525,000	)	$	1.00		-
Outstanding at December 31, 2011		4,589,507		$	1.08		5.94	$	-
Exercisable at December 31, 2011		2,355,508		$	1.03		5.61	$	-
Weighted average fair value of options granted during the six months ended December 31, 2011				$	0.61
Balance at June 30, 2012		4,589,507		$	1.04		5.95
Granted		4,135,000		$	0.50		9.60
Exercised		-		$	-		-
Forfeited		(750,000	)	$	1.25		-
Expired		-		$	-
Outstanding at December 31, 2012		7,974,507		$	0.77		6.93	$	-
Exercisable at December 31, 2012		4,500,257		$	0.89		5.90	$	-
Weighted average fair value of options granted during the six months ended December 31, 2012				$	0.37

On September 1, 2011, ten-year options to purchase 150,000 shares of common stock at an exercise price of $1.95 share, which were contingently granted by the Company on June 3, 2011, were granted to its Chief Financial Officer, upon his transition from part time consultant to full-time employee. Of the options granted, 50,000 vested immediately and the remaining options vest semi-annually on December 31st and June 30th with the first vesting date being December 31, 2011, subject to continued employment. The options were valued using the Black-Scholes option pricing model using a volatility of 90.6% (derived from the historical market price of 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 2.11%. The value of the options, $224,778, will be recorded as expense over the requisite service period.

On September 20, 2011, the Company granted ten-year options to purchase 175,000 shares of common stock at an exercise price of $0.81 share to each of its three original executive officers. The options vest semi-annually on December 31st and June 30th with the first vesting date being December 31, 2011, subject to continued employment. The options were valued using the Black-Scholes option pricing model using a volatility of 88.89% (derived from the historical market price of 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 1.25%. The value of the options, $320,271, will be recorded as expense over the requisite service period. These options replaced options to purchase the same number of shares at an exercise price of $1.00 per share which expired on September 15, 2011.

On September 21, 2012, the Company granted options to purchase 70,000 shares of the Company's common stock at an exercise price of $0.63 per share to the father of the Company's CEO and CTO in recognition of his service. Of the options granted, 35,000 vest immediately with the remainder vesting semi-annually each December 31 and June 30 over a three year period, subject to continued employment on the vesting date. The Company valued the options at $28,358 using the Black-Scholes option pricing model using a volatility of 90.09%, based upon the historical price of the Company's common stock since June 2008, an estimated term of 4 years, using the Simplified Method and a discount rate of 0.53%.

On September 21, 2012, the Compensation Committee of the Board of Directors approved the granting of five-year options to purchase 265,000 shares of common stock at an exercise price of $0.60 per share to non-executive employees. The options vest 25% immediately with the remainder vesting annually over three years, subject to continued employment. The Company valued the options at $101,029 using the Black-Scholes option pricing model using a volatility of 89.93%, based upon the historical price of the Company's common stock since June 2008, an estimated term of 4 years, using the Simplified Method and a discount rate of 0.53%. The resulting expense will be recognized 25% immediately and the remainder over the vesting period.

On November 14, 2012 , the Compensation Committee of the Board of Directors granted its Chief Executive Officer, Chief Financial Officer, Chief Technology Officer and President 800,000 each stock settled stock appreciation rights ("SARS") of which (i) 200,000 vested immediately, (ii) 200,000 vest upon the Company generating $3,000,000 in revenue in any 12-month period, (iii) another 200,000 vest upon the Company generating $5,000,000 in revenue in any 12-month period and (iv) another 200,000 vest upon the Company generating $6,000,000 in revenue in any 12-month period. The SARs are exercisable at $0.45 per share over a 10-year period. . The Company valued the SARS at $1,086,560 using the Black-Scholes option pricing model using a volatility of 89.67%, based upon the historical price of the Company's common stock since June 2008, an estimated term of 6.5 years, using the Simplified Method and a discount rate of 0.93%. The resulting expense will be recognized 25% immediately and the remainder over the vesting period.

The Company's Chief Executive Officer, President and Chief Technology Officer agreed to cancel the 250,000 stock options granted to each of them in their prior employment agreements.

A summary of options issued to directors under the 2007 Plan and changes during the period from June 30, 2011 to December 31, 2011 and from June 30, 2012 to December 31, 2012 is as follows:

Options Issued to Directors

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		790,000		$	1.25		7.98
Granted		245,000		$	1.75		10.00
Exercised		(35,000	)	$	0.95		-
Forfeited		(142,500	)	$	1.46		-
Expired		-		$	-		-
Outstanding at December 31, 2011		857,500		$	1.37		8.06	$	-
Exercisable at December 31, 2011		525,500		$	1.24		7.33	$	-
Weighted average fair value of options granted during the six months ended December 31, 2011				$	1.34
Balance at June 30, 2012		857,500		$	1.36		7.96
Granted		235,000		$	0.90		10.00
Exercised		-		$	-		-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2012		1,092,500		$	1.26		7.90	$	-
Exercisable at December 31, 2012		756,831		$	1.38		7.37	$	-
Weighted average fair value of options granted during the six months ended December 31, 2012				$	0.65

On July 1, 2011, the Company granted options to purchase 245,000 shares of the Company's common stock to directors of the Company. The options have an exercise price of $1.75 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 89.65% (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 2.35%. The value of the options, $311,001, will be recognized over the vesting term, one year.

On September 28, 2011, in connection with the resignation of a director, options to purchase 142,500 shares of common stock at a weighted average exercise price of $1.46 per share were forfeited.

On July 1, 2012, the Company issued options to purchase 230,000 shares of common stock to directors. The options have an exercise price of $0.91 per share, vest on June 30, 2013¸ subject to continuing service as a director and bear a ten year term. The options were valued using the Black-Scholes model using a volatility of 91.04% (derived using the historical market price for the Company's common stock since it began trading in June 2008), an expected term of 5.5 years (using the simplified method) and a discount rate of 0.82%. The value of these options will be recognized as expense over the requisite service period.

On December 6, 2012, the Company issued options to purchase 5,000 shares of common stock to a director upon his appointment to the audit committee. The options have an exercise price of $0.36 per share, and vest over three years, subject to continued service and bear a ten year term. The options were valued using the Black-Scholes model using a volatility of 89.86% (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 0.90%. The value of these options, $1,360, will be recognized as expense over the requisite service period.

A summary of options issued to non-employees under the 2007 Plan and changes during the six month periods from June 30, 2011 to December 31, 2011 and from June 30, 2012 to December 31, 2012 is as follows:

Non-Employee, Non-Director Options

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		540,000		$	1.16		3.14
Granted		-		$	-		-
Exercised		-		$	-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2011		540,000		$	1.16		2.64	$	-
Exercisable at December 31, 2011		540,000		$	1.16		2.64	$	-
Weighted average fair value of options granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		540,000		$	1.16		3.14
Granted		-		$	-		-
Exercised		(100,000	)	$	0.50		-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2012		440,000		$	1.14		1.77	$	-
Exercisable at December 31, 2012		440,000		$	1.14		1.77	$	-
Weighted average fair value of options granted during the six months ended December 31, 2012					N/A

In September 2012, the Company issued 100,000 shares of common stock in exchange for $50,000 in connection with the exercise of 100,000 options to purchase shares of the Company's common stock related to an offer by the Company to reduce the exercise price to $0.50 per share. The original exercise price of the options was $1.25 per share. The Company recognized a loss resulting from the reduction of the exercise price of the options exercised in the amount of $391 representing the difference in the fair market value of the repriced options as compared to the fair market value of the original options on the exercise date. The fair market value of the options was determined using the Black-Scholes options pricing model.

Warrants to Purchase Common Stock

The Company accounts for warrants issued for services in accordance with ASC 505-50-30-2 Equity Based Payments to Non-Employees. As such, the Company calculates the fair value of the warrants granted using the Black-Scholes option pricing model and records the fair value to either prepaid expense or expense based upon the terms of the underlying contract for services. In applying the Black-Scholes method, the Company calculates volatility based upon the historical market price of the Company's common stock, utilizes discount rates obtained from the Federal Reserve Statistical Release for treasury instruments of the same duration and expected term as the contractual term of the warrants.

Warrants issued in connection with the sale of shares of common stock are treated as part of the equity transaction and are recorded in stockholders' equity or liabilities in accordance with the guidance at ASC 480-10-25.

A summary of warrants issued for settlements and changes during the periods July 1, 2011 to December 31, 2011 and from July 1, 2012 to December 31, 2012 is as follows:

Warrants Issued as Settlements

	Number of Warrants			Weighted Average Exercise Price		Remaining Contractual Life
Balance at June 30, 2011		474,508		$	1.05		1.91
Granted		-		$	-		-
Exercised		(130,000	)	$	0.50		-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2011		344,508		$	1.50		1.42
Exercisable at December 31, 2011		344,508		$	1.50		1.42
Weighted average fair value of warrants granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		344,058		$	1.50		0.92
Granted		350,000		$	0.60		5.00
Exercised		-		$	-		-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2012		694,058		$	0.84		2.58
Exercisable at December 31, 2012		694,058		$	0.84		2.58
Weighted average fair value of warrants granted during the six months ended December 31, 2012				$	0.33

On September 21, 2012, the Board of Directors granted five year warrants to purchase 350,000 shares of the Company's common stock at an exercise price of $0.63 per share to a director in recognition of his exemplary five years of service to the Company. The warrants vested immediately. The Company valued the warrants at $115,883 using the Black-Scholes option pricing model using a volatility of 90.09%, based upon the historical price of the Company's common stock since June 2008, an estimated term of 2.5 years, using the Simplified Method and a discount rate of 0.32%.

A summary of warrants issued for cash and changes during the periods June 30, 2011 to December 31, 2011 and from June 30, 2012 to December 31, 2012 is as follows:

Warrants issued for cash or services

	Number of Warrants			Weighted Average Exercise Price		Remaining Contractual Life
Balance at June 30, 2011		4,651,200		$	1.46		2.68
Granted		-		$	-		-
Exercised		-		$	-		-
Exercise recission		45,000		$	1.25
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2011		4,696,200		$	1.46		2.18
Exercisable at December 31, 2011		4,696,200		$	1.46		2.18
Weighted average fair value of warrants granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		4,481,200		$	1.46		2.46
Granted		50,000		$	0.63		5.00
Exercised		(1,820,000	)	$	0.50		-
Forfeited		-		$	-		-
Expired		(320,000	)	$	1.60		-
Outstanding at December 31, 2012		2,391,200		$	1.42		1.00
Exercisable at December 31, 2012		2,391,200		$	1.42		1.00
Weighted average fair value of warrants granted during the six months ended December 31, 2012				$	0.44

On September 21, 2012, the Board of Directors granted five year warrants to purchase 50,000 shares of the Company's common stock at an exercise price of $0.63 per share to the Company's Investor Relations firm in recognition of their performance over the past year. The warrants vested immediately. The Company valued the warrants at $21,787 using the Black-Scholes option pricing model using a volatility of 90.09%, based upon the historical price of the Company's common stock since June 2008, an estimated term of 5 years, the term of the warrants, and a discount rate of 0.70%.

During the six months ended December 31, 2012, the Company issued 1,820,000 shares of common stock in exchange for $910,000 in connection with the exercise of 1,820,000 warrants to purchase shares of the Company's common stock related to an offer by the Company to reduce the exercise price to $0.50 per share. The original exercise prices of the warrants ranged from $1.25 to $1.75 per share. The cost of repricing warrants recognized by the Company amounted to $70,491 for the six months ended December 31, 2012. The cost represents the incremental increase in the fair value of the repriced warrants as compared to the original warrants granted, valued on the exercise date. The fair value of the warrants was determined using the Black-Scholes option pricing model.

During December 2012, warrants to purchase 320,000 shares of the Company's common stock at an exercise price of $1.60 per share expired unexercised.

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Subsequent Events (Details) (USD $)	0 Months Ended	1 Months Ended				0 Months Ended		1 Months Ended
	Feb. 08, 2013	Dec. 28, 2012	Aug. 31, 2012	Dec. 31, 2012	Mar. 29, 2009	Feb. 08, 2013 Minimum [Member]	Feb. 08, 2013 Maximum [Member]	Jul. 31, 2012 Loss Contingency Civil Theft [Member]	Jan. 31, 2013 Loss Contingency Breach Of Agreement [Member]	Jul. 31, 2012 Loss Contingency Breach Of Agreement [Member]	Jul. 31, 2012 Loss Contingency Trespass Claim [Member]	Jan. 31, 2013 Majority Shareholder [Member]
Related Party Transaction [Line Items]
Proceeds from the issuance of 5.0% convertible notes		$ 250,000	$ 175,000									$ 250,000
Convertible notes payable												1,997,483
Debt, interest rate		10.00%			5.00%							7.50%
Convertible note, conversion price		$ 0.35	$ 0.5									$ 0.35
Debt instrument, maturity date												Feb. 18, 2016
Litigation, provision								200,000		841,000	5,000
Litigation awarded value									500,000
Shares issued for debt												210,226
Interest accrued				3,318								73,579
Due to former President	$ 150,000
Option maturity period	10 years
Common stock shares granted	112,500
Granted, exercise price	$ 0.39
Options cancelled	1,137,500
Options cancelled, exercise price						$ 0.45	$ 1.22

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Convertible and Non-Convertible Note Agreements

6 Months Ended

Dec. 31, 2012

Convertible and Non-Convertible Note Agreements [Abstract]

Convertible and Non-Convertible Note Agreements

NOTE 3 - Convertible and Non-Convertible Note Agreements

On May 29, 2009, the Company entered into a Credit Enhancement and Financing Security Agreement with the Company's largest principal stockholder. In connection with this agreement the Company executed a Revolving Promissory Note which permitted the Company to borrow up to $2,500,000. Interest, at an annual rate of 5%, was due monthly on the 20th day of each month which commenced on July 20, 2009. In May 2010, this agreement was extended for an additional one year period.

In February 2011, the Company renegotiated the Line of Credit Agreement with its largest principal stockholder (the Lender). As part of the renegotiation, the Company issued 892,857 shares of the Company's common stock and five-year warrants to purchase 1,000,000 shares of the Company's common stock at an exercise price of $1.25 per share in exchange for a $1,000,000 reduction in the principal amount of the Line of Credit. In addition, the remaining principal amount due under the line of credit of $1,497,483 was replaced by a five-year convertible note of the same amount, convertible at $1.12 per share (fair market value on transaction date based upon the quoted trading price) and bearing annual interest of 5%, due on the maturity date of the note (the "2011 Note"). As an inducement for the Lender to enter into the convertible note agreement, the Company granted the Lender five-year warrants to purchase 300,000 shares of the Company's common stock at an exercise price of $1.75 per share. These warrants were exercised in September 2012 in exchange for $150,000 in connection with the Company's offer to all warrant holders to exercise warrants at $0.50 per share instead of the exercise price negotiated on the date of the grant.

In December 2011, the Company received short term advances from its Chief Executive Officer, President and Chief Financial Officer in the amounts of $10,000, $29,380 and $50,000, respectively. The advances bear interest rates of 0.7%, 5.0% and 5.0%, respectively. In addition, as further inducement for the advance from the Chief Financial Officer, the Company approved the reduction in the exercise price of 150,000 options granted to the Chief Financial Officer from $1.95 to $0.60 per share. In connection with this repricing, the expense related to the vesting of these options was increased by $15,067 which will be recognized over the remaining service period. Through December 31, 2012, the Company has made repayments to its President, Chief Executive Officer and Chief Financial Officer on the notes due these individuals in the amounts of $20,000, $9,839 and $35,000, respectively. As of December 31, 2012, accrued interest related to these notes amounted to $3,318.

On March 9, 2012, the Company received $105,000 from third parties in exchange for six month convertible original issue discount notes in the amount of $107,625. The notes bear an annual interest rate of 5% and are convertible into the Company's common stock at the rate of $0.50 per share. In connection with the issuance of the notes, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $84,562 which will be amortized to interest expense over the life of the notes. In September 2012, the Company issued new one-year convertible original issue discount notes in the amount of $120,540, bearing annual interest of 12% and convertible at $0.50 per share in exchange for cancellation of the old notes. This modification was not considered a debt extinguishment. In accordance with ASC 470, the Company will recognize a debt discount related to the change in fair value of the embedded conversion option in the amount of $35,138 which will be amortized to interest expense over the life of the convertible notes. For the six months ended December 31, 2012, the Company has recognized interest expense of $5,301 and $53,668, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.

On March 10, 2012, the Company received $75,000 from a director in exchange for a six month convertible original issue discount note in the amount of $76,875. The note bears an annual interest rate of 5% and is convertible into the Company's common stock at the rate of $0.50 per share. In connection with the issuance of the note, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $63,038 which will be amortized to interest expense over the life of the note. In September 2012, the Company issued a new one-year convertible original issue discount note in the amount of $86,100, bearing annual interest of 12% and convertible at $0.50 per share in exchange for cancellation of the old note. This modification was not considered a debt extinguishment. In accordance with ASC 470, the Company will recognize a debt discount related to the change in fair value of the embedded conversion option in the amount of $24,971 which will be amortized to interest expense over the life of the convertible note. For the six months ended December 31, 2012, the Company has recognized interest expense of $3,527 and $31,839, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.

On March 29, 2012, the Company received $250,000 from its principal stockholder and accrued interest due this stockholder as of February 18, 2012 of $74,874 was paid by including the interest in a new six month convertible original issue discount note in the amount of $332,996. The note bears an annual interest rate of 5% and is convertible into the Company's common stock at the rate of $0.50 per share. In connection with the issuance of the note, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $199,798 and an original issue discount of $8,121 which will be amortized to interest expense over the life of the note. For the period from July 1, 2012 to September 28, 2012 the Company recognized interest expense of $3,972 and $97,703, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount. On September 28, 2012, the holder elected to convert the note into common stock and was issued 665,992 shares of common stock by the Company.

In August 2012, the Company received $175,000 in exchange for six month convertible original issue discount notes in the amount of $179,375 with two accredited investors. The notes are convertible into common stock at $0.50 per share. The notes bear an annual interest rate of 5% and are convertible into the Company's common stock at the rate of $0.50 per share. In connection with the issuance of the notes, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $106,600 and an original issue discount of $4,375 which will be amortized to interest expense over the life of the notes. For the six months ended December 31, 2012, the Company has recognized interest expense of $3,475 and $85,368, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.

On December 28, 2012, the Company received $250,000 from its principal stockholder in exchange for a one year convertible original issue discount note in the amount of $275,000 (the "2012 Note"). The note bears an annual interest rate of 10% and is convertible into the Company's common stock at the rate of $0.35 per share. In connection with the issuance of the note, the Company recorded a loan discount related to the intrinsic value of the beneficial conversion feature in the amount of $23,571 and an original issue discount of $25,000 which will be amortized to interest expense over the life of the note. For the six months ended December 31, 2012, the Company has recognized interest expense of $412 and $389, respectively, related to the amortization of the original issue discount and the beneficial conversion feature discount.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2012	Jun. 30, 2012
Current assets
Cash and cash equivalents	$ 280,549	$ 84,194
Accounts receivable trade, net	43,716	55,160
Inventories	575,783	546,118
Prepaid expenses and other current assets	71,653	45,785
Total current assets	971,701	731,257
Furniture, fixtures and equipment, net	166,718	188,779
Deposits	15,631	15,631
Total assets	1,154,050	935,667
Current liabilities
Accounts payable	201,705	234,375
Accrued expenses	68,096	72,637
Litigation accrual	1,446,000	1,646,000
Notes payable - related parties	24,541	84,380
Convertible notes - related parties, net of discount	289,533	283,230
Convertible notes - third parties, net of discount	244,061	74,214
Insurance premium finance contract	37,688	9,250
Total current liabilities	2,311,624	2,404,086
Convertible note - related party	1,497,483	1,497,483
Total liabilities	3,809,107	3,901,569
Commitments and contingencies (Note 5)
Stockholders' 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; 29,190,286 and 24,914,474 shares issued and outstanding as of December 31, 2012 and June 30, 2012 , respectively.	29,190	24,914
Additional paid in capital	23,327,123	19,809,070
Accumulated deficit	(26,011,370)	(22,799,886)
Total stockholders' equity (deficit)	(2,655,057)	(2,965,902)
Total liabilities and stockholders' equity (deficit)	$ 1,154,050	$ 935,667

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Organization and Basis of Presentation

6 Months Ended

Dec. 31, 2012

Organization and Basis of Presentation [Abstract]

Organization and Basis of Presentation

NOTE 1 - Organization and Basis of Presentation

Organization

GelTech Solutions, Inc. ("GelTech" or the "Company") is a Delaware corporation organized in 2006. GelTech is focused on marketing four products: (1) FireIce®, a water soluble fire retardant used to protect firefighters, structures and wildlands; (2) Soil₂O® 'Dust Control', an application which is used for dust mitigation in the aggregate, road construction, mining, as well as, other industries that deal with daily dust control issues; (3) Soil₂O®, a product which reduces the use of water and is primarily marketed to golf courses and the agriculture market; and (4) FireIce® Home Defense Unit, a system for applying FireIce® to structures to protect them from wildfires. Additionally, GelTech owns a United States patent for a method to modify weather.

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: WeatherTech Innovations, Inc. and FireIce Gel, Inc. (formerly GelTech Innovations, 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 ("SEC") 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 interim 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, 2012 filed on September 28, 2012.

Inventories

Inventories as of December 31, 2012 consisted of raw materials and finished goods in the amounts of $158,670 and $417,335, respectively.

Fair Value of Financial Instruments and Fair Value Measurements

We measure our financial assets and liabilities in accordance with ASC 820 "Fair Value Measurements and Disclosures". For certain of our financial instruments, including cash equivalents, accounts receivable, accounts payable, accrued expenses and line of credit, the carrying amounts approximate fair value due to their short maturities. The carrying amount of our convertible debt approximates the fair value because the interest rate on the convertible note does not vary materially from the market rate for similar debt instruments.

We adopted accounting guidance for fair value measurements of financial assets and liabilities and adopted the same guidance for non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The Company had no financial or non-financial assets or liabilities measured at fair value and subject to this accounting standard as of December 31, 2012 or June 30, 2012.

Revenue Recognition

Revenue from sales of products is recognized when persuasive evidence of an arrangement exists, products have been shipped to the customer, economic risk of loss has passed to the customer, the price is fixed or determinable, collection is reasonably assured, and any future obligations of the Company are insignificant. Revenue is shown net of returns and allowances.

Products shipped from our third-party fulfillment companies or our Jupiter, Florida location are shipped FOB shipping point. Normal terms are net 30 or net 60 days depending on the arrangement we have with the customer. As such, revenue is recognized when product has been shipped from either the third-party fulfillment company or from the Jupiter, Florida location.

The Company follows the guidance of ASC 605-50-25, "Revenue Recognition, Customer Payments." Accordingly, any incentives received from vendors are recognized as a reduction of the cost of goods sold. Promotional products or samples given to customers or potential customers are recognized as a cost of goods sold. Cash incentives provided to our customers are recognized as a reduction of the related sale price, and, therefore, are a reduction of sales.

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 consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Significant estimates for the three months and six months ended December 31, 2012 include the allowance for doubtful accounts, depreciation and amortization, valuation of inventories, valuation of options and warrants granted for services or settlements, valuation of common stock granted for services or debt conversion, valuation of debt discount related to the beneficial conversion feature of convertible notes, accruals for litigation losses and the valuation of deferred tax assets.

Net Earnings (Loss) per Share

The Company computes net earnings (loss) per share in accordance with 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 December 31, 2012, there were stock appreciation rights to purchase 3,200,000 shares of the Company common stock, options to purchase 6,307,007 shares of the Company's common stock, warrants to purchase 3,085,258 shares of the Company's common stock, 800,000 restricted stock units and 2,894,782 shares of the Company's common stock are reserved for convertible notes which may dilute future earnings per share.

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with 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.

Determining Fair Value Under ASC 718-10

The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. 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 Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities.

The fair values of stock option grants for the period from July 1, 2012 to December 31, 2012 were estimated using the following assumptions:

Risk free interest rate	0.53% -0.93%
Expected term (in years)	2.5 - 6.5
Dividend yield	--
Volatility of common stock	89.67% - 91.04%
Estimated annual forfeitures	--

New Accounting Pronouncements

Accounting Standards Updates which were not effective until after December 31, 2012 are not expected to have a significant effect on the Company's consolidated financial position or results of operations.

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Stockholders' Equity (Schedule of Stock Options Activity) (Details) (USD $)	0 Months Ended	6 Months Ended			0 Months Ended	1 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended		0 Months Ended				1 Months Ended		6 Months Ended		1 Months Ended
	Feb. 08, 2013	Dec. 31, 2012	Dec. 31, 2012 Employee Options and Stock Appreciation Rights [Member]	Dec. 31, 2011 Employee Options and Stock Appreciation Rights [Member]	Dec. 06, 2012 Options Issued to Directors [Member]	Sep. 21, 2012 Options Issued to Directors [Member]	Sep. 28, 2011 Options Issued to Directors [Member]	Dec. 31, 2012 Options Issued to Directors [Member]	Dec. 31, 2011 Options Issued to Directors [Member]	Jun. 30, 2012 Options Issued to Directors [Member]	Jun. 30, 2011 Options Issued to Directors [Member]	Dec. 31, 2012 Non-Employee, Non-Director Options [Member]	Dec. 31, 2011 Non-Employee, Non-Director Options [Member]	Nov. 14, 2012 Chief Executive Officer And President And Chief Technology Officer [Member]	Dec. 06, 2012 Chief Executive Officer And President And Chief Technology Officer [Member] 3,000,000 in Revenue in any 12-Month Period [Member]	Dec. 06, 2012 Chief Executive Officer And President And Chief Technology Officer [Member] 5,000,000 in Revenue in any 12-Month Period [Member]	Dec. 06, 2012 Chief Executive Officer And President And Chief Technology Officer [Member] 6,000,000 in Revenue in any 12-Month Period [Member]	Dec. 31, 2012 Stock Option [Member]	Sep. 30, 2012 Stock Option [Member]	Dec. 31, 2012 Stock Option [Member]	Dec. 31, 2012 Restricted Stock Units [Member]	Aug. 31, 2011 Chief Financial Officer [Member]	Sep. 20, 2011 Original Three Executive Officers [Member]	Sep. 21, 2012 Chief Executive Officer And Chief Technology Officer Father [Member]	Sep. 21, 2012 Non Executive Employee [Member]	Sep. 21, 2012 Investors Relations [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensaion expense not yet recognized																		$ 1,734,037		$ 1,734,037	$ 270,000
Unrecognized compensation cost, recognition period																				3 years	3 years
Common stock shares granted	112,500				5,000	350,000	142,500			230,000	240,000							320,000				150,000	175,000	70,000	265,000	50,000
Granted, exercise price	$ 0.39				$ 0.36	$ 0.63	$ 1.46							$ 0.45					$ 0.5			$ 1.95	$ 0.81	$ 0.63	$ 0.6	$ 0.63
Option maturity period	10 years				10 years	5 years					10 years			10 years								10 years	10 years	3 years	5 years	5 years
Common stock vesting term					3 years						1 year														3 years
Additional expense to vest previously issued options																				990,559	90,000
Immediately vested shares															200,000	200,000	200,000					50,000		35,000
Percentage expensed immediately																									25.00%
Exercised		1,820,000							(35,000)			(100,000)							100,000
Fair value of options issued		$ 910,000																	$ 50,000
Options cancelled	1,137,500

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Stockholders' Equity (Schedule of Warrant Activity) (Details) (USD $)	0 Months Ended	6 Months Ended			12 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended		6 Months Ended		12 Months Ended
	Feb. 08, 2013	Dec. 31, 2012	Dec. 31, 2012 Employee Options and Stock Appreciation Rights [Member]	Dec. 31, 2011 Employee Options and Stock Appreciation Rights [Member]	Jun. 30, 2012 Employee Options and Stock Appreciation Rights [Member]	Jun. 30, 2011 Employee Options and Stock Appreciation Rights [Member]	Dec. 31, 2012 Options Issued to Directors [Member]	Dec. 31, 2011 Options Issued to Directors [Member]	Jun. 30, 2012 Options Issued to Directors [Member]	Jun. 30, 2011 Options Issued to Directors [Member]	Dec. 31, 2012 Non-Employee, Non-Director Options [Member]	Dec. 31, 2011 Non-Employee, Non-Director Options [Member]	Jun. 30, 2012 Non-Employee, Non-Director Options [Member]	Jun. 30, 2011 Non-Employee, Non-Director Options [Member]	Dec. 31, 2012 Warrants Issued For Settlement [Member]	Dec. 31, 2011 Warrants Issued For Settlement [Member]	Jun. 30, 2012 Warrants Issued For Settlement [Member]	Jun. 30, 2011 Warrants Issued For Settlement [Member]	Dec. 31, 2012 Warrants Issued for Cash or Services [Member]	Dec. 31, 2011 Warrants Issued for Cash or Services [Member]	Jun. 30, 2012 Warrants Issued for Cash or Services [Member]	Jun. 30, 2011 Warrants Issued for Cash or Services [Member]
Number of Warrants
Balance at beginning of period			4,589,507	4,439,507	4,439,507		857,500	790,000	790,000		540,000	540,000	540,000		344,058	474,508	474,508		4,481,200	4,651,200	4,651,200
Granted	112,500		4,135,000	675,000			235,000	245,000							350,000				50,000
Exercised		1,820,000						(35,000)			(100,000)					(130,000)			(1,820,000)
Exercise rescission																				45,000
Forfeited	1,137,500		(750,000)					(142,000)
Expired				(525,000)															(320,000)
Outstanding at end of period			7,974,507	4,589,507	4,589,507	4,439,507	1,092,500	857,500	857,500	790,000	440,000	540,000	540,000	540,000	694,058	344,508	344,058	474,508	2,391,200	4,696,200	4,481,200	4,651,200
Exercisable at end of period			4,500,257	2,355,508			756,831	525,500			440,000	540,000			694,058	344,508			2,391,200	4,696,200
Weighted Average Exercise Price
Balance at beginning of period			$ 1.04	$ 1.12	$ 1.12		$ 1.36	$ 1.25	$ 1.25		$ 1.16	$ 1.16	$ 1.16		$ 1.5	$ 1.05	$ 1.05		$ 1.46	$ 1.46	$ 1.46
Granted			$ 0.5	$ 1.06			$ 0.9	$ 1.75							$ 0.6				$ 0.63
Exercised								$ 0.95			$ 0.5					$ 0.5			$ 0.5
Exercise rescission																				$ 1.25
Forfeited			$ 1.25					$ 1.46
Expired				$ 1.0															$ 1.6
Outstanding at end of period			$ 0.77	$ 1.08	$ 1.04	$ 1.12	$ 1.26	$ 1.37	$ 1.36	$ 1.25	$ 1.14	$ 1.16	$ 1.16	$ 1.16	$ 0.84	$ 1.5	$ 1.5	$ 1.05	$ 1.42	$ 1.46	$ 1.46	$ 1.46
Exercisable at end of period			$ 0.89	$ 1.03			$ 1.38	$ 1.24			$ 1.14	$ 1.16			$ 0.84	$ 1.5			$ 1.42	$ 1.46
Weighted average fair value of warrants granted during the year			$ 0.37	$ 0.61			$ 0.65	$ 1.34							$ 0.33				$ 0.44
Remaining Contractual Life
Balance at beggining of period			6 years 11 months 6 days	5 years 11 months 9 days	5 years 11 months 9 days	6 years 4 months 20 days	7 years 10 months 26 days	8 years 21 days	7 years 11 months 17 days	7 years 11 months 29 days	1 year 9 months 2 days	2 years 7 months 15 days	3 years 1 month 20 days	3 years 1 month 20 days	2 years 6 months 24 days	1 year 4 months 28 days	11 months 2 days	1 year 10 months 25 days	1 year	2 years 2 months 3 days	2 years 5 months 12 days	2 years 8 months
Granted			9 years 7 months 2 days				10 years	10 years							5 years				5 years
Balance at end of period			6 years 11 months 6 days	5 years 11 months 9 days	5 years 11 months 9 days	6 years 4 months 20 days	7 years 10 months 26 days	8 years 21 days	7 years 11 months 17 days	7 years 11 months 29 days	1 year 9 months 2 days	2 years 7 months 15 days	3 years 1 month 20 days	3 years 1 month 20 days	2 years 6 months 24 days	1 year 4 months 28 days	11 months 2 days	1 year 10 months 25 days	1 year	2 years 2 months 3 days	2 years 5 months 12 days	2 years 8 months
Exercisable at end of period			5 years 10 months 26 days	5 years 7 months 5 days			7 years 4 months 10 days	7 years 4 months			1 year 9 months 2 days	2 years 7 months 15 days			2 years 6 months 24 days	1 year 4 months 28 days			1 year	2 years 2 months 3 days
Aggregate Intrinsic Value [Abstract]
Outstanding
Exercisable

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Going Concern

6 Months Ended

Dec. 31, 2012

Going Concern [Abstract]

Going Concern

NOTE 2 - Going Concern

These unaudited condensed 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 December 31, 2012, the Company had a working capital deficit, an accumulated deficit and stockholders' deficit of $1,339,923, $26,011,370 and $2,655,057, respectively, and incurred losses from operations of $3,211,484 for the six months ended December 31, 2012 and used cash from operations of $1,994,491 during the six months ended December 31, 2012. In addition, the Company has not yet generated revenue sufficient to support ongoing operations. These factors raise substantial doubt regarding the Company's ability to continue as a going concern.

In January 2012, the Company signed a purchase agreement with Lincoln Park Capital Fund LLC which provided for the sale of up to an additional $4.9 million worth of common stock of the Company, in addition to the $100,000 purchased upon entering into the agreement. To date the Company has issued 2,336,569 shares of common stock in exchange for $1,420,003 under this agreement and has the ability to sell another $3.6 million under the agreement under certain circumstances.

Management believes that the actions presently being taken provide the opportunity for the Company to continue as a going concern. Ultimately, the continuation of the Company as a going concern is dependent upon the ability of the Company to generated sufficient revenue to attain profitable operations. These unaudited condensed consolidated 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.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 31, 2012	Jun. 30, 2012
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract]
Preferred stock, par value per share	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	29,190,286	24,914,474
Common stock, shares outstanding	29,190,286	24,914,474

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Organization and Basis of Presentation (Narrative) (Details) (USD $)	6 Months Ended
	Dec. 31, 2012
Inventories
Raw materials	158,670
Finished goods	417,335
Stock Appreciation Rights [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares considered antidilutive	3,200,000
Stock Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares considered antidilutive	6,307,007
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares considered antidilutive	3,085,258
Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares considered antidilutive	800,000
Stock Options Reserved For Convertible Notes [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares considered antidilutive	2,894,782

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Document and Entity Information	6 Months Ended
	Dec. 31, 2012	Feb. 08, 2013
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Entity Registrant Name	GelTech Solutions, Inc.
Entity Central Index Key	0001403676
Current Fiscal Year End Date	--06-30
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2013
Entity Filer Category	Smaller Reporting Company
Entity Units Outstanding		29,400,512

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Organization and Basis of Presentation (Schedule of Fair Value Assumptions for Stock Options) (Details)	6 Months Ended
	Dec. 31, 2012
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Dividend yield
Estimated annual forfeitures
Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	2 years 6 months
Minimum [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate	0.53%
Volatility of common stock	89.67%
Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term (in years)	6 years 6 months
Maximum [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk free interest rate	0.93%
Volatility of common stock	91.04%

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS [Abstract]
Sales	$ 37,453	$ 84,551	$ 121,903	$ 262,953
Cost of goods sold	13,499	39,181	49,578	114,421
Gross profit	23,954	45,370	72,325	148,532
Operating expenses:
Selling, general and administrative expenses	1,526,616	1,123,204	3,076,098	2,626,410
Research and development	6,423	7,726	23,731	49,975
Total operating expenses	1,533,039	1,130,930	3,099,829	2,676,385
Loss from operations	(1,509,085)	(1,085,560)	(3,027,504)	(2,527,853)
Other income (expense)
Loss on settlement		(300,000)		(301,500)
Other income	200,000		200,000
Interest income	514	57	565	463
Loss on repricing warrants		(5,834)	(70,491)	(5,834)
Interest expense	(97,226)	(19,328)	(314,054)	(38,487)
Total other income (expense)	103,288	(325,105)	(183,980)	(345,358)
Net loss	$ (1,405,797)	$ (1,410,665)	$ (3,211,484)	$ (2,873,211)
Net loss per common share - basic and diluted	$ (0.05)	$ (0.06)	$ (0.12)	$ (0.13)
Weighted average shares outstanding - basic and diluted	28,877,700	22,204,124	27,387,133	22,152,375

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Concentrations

6 Months Ended

Dec. 31, 2012

Concentrations [Abstract]

Concentrations

NOTE 7 - 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 December 31, 2012. As of December 31, 2012, there were no cash equivalent balances held in depository accounts that are not insured.

At December 31, 2012, three customers accounted for 41.7%, 33.4% and 11.9%, respectively, of accounts receivable.

For the six months ended December 31, 2012 four customers accounted for approximately 18.5%, 15.6%, 12.8% and 11.1% of sales.

During the six months ended December 31, 2012 all sales resulted from two products, FireIce® and Soil₂O™ which made up 87.5% and 12.5%, respectively, of total sales. Of the FireIce® sales, 84.0% related to sales of FireIce product and 16.0% related to sales of the FireIce Home Defense units. Of the Soil₂O™ sales, 72.5% related to traditional sales of Soil₂O® and 27.5% related to Soil₂O® Dust Control.

Three vendors accounted for 37.2%, 19.2% and 10.0% of the Company's approximately $88,000 of raw material and packaging purchases during the six months ended December 31, 2012.

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Related Party Transactions

6 Months Ended

Dec. 31, 2012

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 6 - 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 is a bookkeeper at $1,000 per week,

· The CEO and CTO's father is a researcher at $1,200 per week, and

· The CEO and CTO's mother is 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.

The Company has employment arrangements with its executive officers which are described under Note 5.

The Company has entered into a series of credit facilities with its principal stockholder as more fully described in Note 3. Additionally, the Company was provided a loan of $250,000 in December 2012 by its principal stockholder. See Note 3.

The Company issued short term notes payable to its President, Chief Executive Officer and Chief Financial Officer as more fully described in Note 3.

In September 2012, the Company granted options to purchase 70,000 shares of the Company's common stock to the father of the Company's Chief Executive Officer and Chief Technology Officer as more fully described in Note 4.

In September 2012, the Company granted warrants to purchase 350,000 shares of the Company's common stock to a director as more fully described in Note 4.

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Stockholders' Equity (Schedule of Fair Value Assumptions for Stock Options) (Details) (USD $)	0 Months Ended	1 Months Ended	12 Months Ended		1 Months Ended		0 Months Ended	1 Months Ended
	Dec. 06, 2012 Director [Member]	Sep. 21, 2012 Director [Member]	Jun. 30, 2012 Director [Member]	Jun. 30, 2011 Director [Member]	Aug. 31, 2011 Chief Financial Officer [Member]	Sep. 20, 2011 Original Three Executive Officers [Member]	Nov. 14, 2012 Chief Executive Officer And President And Chief Technology Officer [Member]	Sep. 21, 2012 CEO and CTO's Father [Member]	Sep. 21, 2012 Non Executive Employee [Member]	Sep. 21, 2012 Investors Relations [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Pricing model used in calculation of grant-date fair value	Black-Scholes Model	Black-Scholes Model	Black-Scholes Model	Black-Scholes Model	Black-Scholes Model	Black-Scholes Model	Black-Scholes Model	Black-Scholes Model	Black-Scholes Model	Black-Scholes Model
Volatility of common stock	89.86%	90.09%	91.04%	89.65%	90.60%	88.89%	89.67%	90.09%	89.93%	90.09%
Expected term (in years)	6 years 6 months	2 years 6 months	5 years 6 months	6 years 6 months	6 years 6 months	6 years 6 months	6 years 6 months	4 years	4 years	5 years
Discount rate	0.90%	0.32%	0.82%	2.35%	2.11%	1.25%	0.93%	0.53%	0.53%	0.70%
Fair value of options	$ 1,360	$ 115,883		$ 311,001	$ 224,778	$ 320,271	$ 1,086,560	$ 28,358	$ 101,029	$ 21,787

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Going Concern (Details) (USD $)	1 Months Ended		3 Months Ended		6 Months Ended			1 Months Ended	6 Months Ended	1 Months Ended
	Sep. 30, 2012	Aug. 31, 2012	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Jun. 30, 2012	Jan. 31, 2012 Lincoln Park Capital Fund, LLC. [Member]	Dec. 31, 2012 Lincoln Park Capital Fund, LLC. [Member]	Jan. 31, 2012 Lincoln Park Capital Fund, LLC. [Member] New Common Stock Purchase Agreement [Member]
Going Concern [Abstract]
Net loss			$ (1,405,797)	$ (1,410,665)	$ (3,211,484)	$ (2,873,211)
Net cash used in operating activities					(1,994,491)	(2,054,789)
Working capital deficit			(1,339,923)		(1,339,923)
Accumulated deficit			(26,011,370)		(26,011,370)		(22,799,886)
Stockholders' deficit			(2,655,057)		(2,655,057)		(2,965,902)
Related Party Transaction [Line Items]
Potential proceeds from sale of equity								4,900,000		3,600,000
Common stock issued for cash, shares	1,740,000	256,000						2,336,569	1,333,820
Proceeds from sale of equity	870,000							1,420,003	810,003
Proceeds from sale of stock through private placements					$ 128,000	$ 50,000				$ 100,000

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Organization and Basis of Presentation (Tables)

6 Months Ended

Dec. 31, 2012

Organization and Basis of Presentation [Abstract]

Schedule of Stock Option Grants, Estimated using Assumptions

The fair values of stock option grants for the period from July 1, 2012 to December 31, 2012 were estimated using the following assumptions:

Risk free interest rate	0.53% -0.93%
Expected term (in years)	2.5 - 6.5
Dividend yield	--
Volatility of common stock	89.67% - 91.04%
Estimated annual forfeitures	--

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Subsequent Events

6 Months Ended

Dec. 31, 2012

Subsequent Events [Abstract]

Subsequent Events

NOTE 8 - Subsequent Events

In January 2013, the Company borrowed $250,000 from Michael Reger, its principal shareholder. In connection with this loan, the Company consolidated all of the outstanding notes held by the principal shareholder and issued him a $1,997,483 7.5% note convertible at $0.35 per share due February 18, 2016 (the "2013 Note") and the principal shareholder cancelled his 2011 Note and the 2012 Note. The 2013 Note bears an annual interest rate of 7.5% with interest to be paid annually. In connection with the new note the Company issued 210,226 shares of common stock in payment of accrued interest of $73,579 owed under the 2011 Note and the 2012 Note. See Note 3 above.

In January 2013, the court ruled on the Company's post-trial motions in the Hopkins litigation dismissing the $200,000 verdict (which was subject to triple damages) against Mr. Cordani and reducing the $841,000 breach of the consulting agreement award to $500,000. Previously, the Company's insurance carrier paid the plaintiff $200,000 which leaves the Company liable for the $5,000 trespass award and the $500,000 breach of consulting agreement award. The Company filed motions seeking a new trial on damages. The Company received a favorable ruling on these motions and has 30 days to elect to accept the reduced award or file for a new trial. The Company intends to file for a new trial.

Effective February 8, 2013, the Company's President and Director resigned from the Company to pursue other opportunities. In connection with his separation, the Company agreed to pay the President $150,000 plus COBRA payments over 14 months. In addition, the Company agreed to issue the former President ten year fully vested options to purchase 112,500 shares of the Company's common stock at an exercise price of $0.39 per share, subject to a lockup agreement for the option shares and the other shares he currently owns. In addition, vested options and stock appreciation rights to purchase 1,137,500 shares of the Company's common stock at exercise prices from $0.45 to $1.22 per share, previously issued to the President, were cancelled.

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Organization and Basis of Presentation (Policy)

6 Months Ended

Dec. 31, 2012

Organization and Basis of Presentation [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its two wholly owned subsidiaries: WeatherTech Innovations, Inc. and FireIce Gel, Inc. (formerly GelTech Innovations, 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 ("SEC") 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 interim 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, 2012 filed on September 28, 2012.

Inventories

Inventories

Inventories as of December 31, 2012 consisted of raw materials and finished goods in the amounts of $158,670 and $417,335, respectively.

Fair Value of Financial Instruments and Fair Value Measurements

Fair Value of Financial Instruments and Fair Value Measurements

We measure our financial assets and liabilities in accordance with ASC 820 "Fair Value Measurements and Disclosures". For certain of our financial instruments, including cash equivalents, accounts receivable, accounts payable, accrued expenses and line of credit, the carrying amounts approximate fair value due to their short maturities. The carrying amount of our convertible debt approximates the fair value because the interest rate on the convertible note does not vary materially from the market rate for similar debt instruments.

We adopted accounting guidance for fair value measurements of financial assets and liabilities and adopted the same guidance for non-financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: Inputs other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.

The Company had no financial or non-financial assets or liabilities measured at fair value and subject to this accounting standard as of December 31, 2012 or June 30, 2012.

Revenue Recognition

Revenue Recognition

Revenue from sales of products is recognized when persuasive evidence of an arrangement exists, products have been shipped to the customer, economic risk of loss has passed to the customer, the price is fixed or determinable, collection is reasonably assured, and any future obligations of the Company are insignificant. Revenue is shown net of returns and allowances.

Products shipped from our third-party fulfillment companies or our Jupiter, Florida location are shipped FOB shipping point. Normal terms are net 30 or net 60 days depending on the arrangement we have with the customer. As such, revenue is recognized when product has been shipped from either the third-party fulfillment company or from the Jupiter, Florida location.

The Company follows the guidance of ASC 605-50-25, "Revenue Recognition, Customer Payments" .Accordingly, any incentives received from vendors are recognized as a reduction of the cost of goods sold. Promotional products or samples given to customers or potential customers are recognized as a cost of goods sold. Cash incentives provided to our customers are recognized as a reduction of the related sale price, and, therefore, are a reduction of sales.

Use of Estimates

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 consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Significant estimates for the three months and six months ended December 31, 2012 include the allowance for doubtful accounts, depreciation and amortization, valuation of inventories, valuation of options and warrants granted for services or settlements, valuation of common stock granted for services or debt conversion, valuation of debt discount related to the beneficial conversion feature of convertible notes, accruals for litigation losses and the valuation of deferred tax assets.

Net Earnings (Loss) per Share

Net Earnings (Loss) per Share

The Company computes net earnings (loss) per share in accordance with 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 December 31, 2012, there were stock appreciation rights to purchase 3,200,000 shares of the Company common stock, options to purchase 6,307,007 shares of the Company's common stock, warrants to purchase 3,085,258 shares of the Company's common stock, 800,000 restricted stock units and 2,894,782 shares of the Company's common stock are reserved for convertible notes which may dilute future earnings per share.

Stock-Based Compensation

Stock-Based Compensation

The Company accounts for employee stock-based compensation in accordance with 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.

Determining Fair Value Under ASC 718-10

The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing formula. 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 Company estimates volatility based upon the historical stock price of the Company and estimates the expected term for employee stock options using the simplified method for employees and directors and the contractual term for non-employees. The risk free rate is determined based upon the prevailing rate of United States Treasury securities with similar maturities.

The fair values of stock option grants for the period from July 1, 2012 to December 31, 2012 were estimated using the following assumptions:

Risk free interest rate	0.53% -0.93%
Expected term (in years)	2.5 - 6.5
Dividend yield	--
Volatility of common stock	89.67% - 91.04%
Estimated annual forfeitures	--

New Accounting Pronouncements

New Accounting Pronouncements

Accounting Standards Updates which were not effective until after December 31, 2012 are not expected to have a significant effect on the Company's consolidated financial position or results of operations.

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Stockholders' Equity (Tables)

6 Months Ended

Dec. 31, 2012

Employee Options and Stock Appreciation Rights [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of Stock Option Activity Under Stock Option and Incentive Plans

Employee Options and Stock Appreciation Rights

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		4,439,507		$	1.12		6.40
Granted		675,000		$	1.06		-
Exercised		-		$	-		-
Forfeited		-		$	-
Expired		(525,000	)	$	1.00		-
Exercisable at December 31, 2011		4,589,507		$	1.08		5.94	$	-
Exercisable at December 31, 2011		2,355,508		$	1.03		5.61	$	-
Weighted average fair value of options granted during the six months ended December 31, 2011				$	0.61
Balance at June 30, 2012		4,589,507		$	1.04		5.95
Granted		4,135,000		$	0.50		9.60
Exercised		-		$	-		-
Forfeited		(750,000	)	$	1.25		-
Expired		-		$	-
Outstanding at December 31, 2012		7,974,507		$	0.77		6.93	$	-
Exercisable at December 31, 2012		4,500,257		$	0.89		5.90	$	-
Weighted average fair value of options granted during the six months ended December 31, 2012				$	0.37

Options Issued to Directors [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of Stock Option Activity Under Stock Option and Incentive Plans

Options Issued to Directors

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		790,000		$	1.25		7.98
Granted		245,000		$	1.75		10.00
Exercised		(35,000	)	$	0.95		-
Forfeited		(142,500	)	$	1.46		-
Expired		-		$	-		-
Exercisable at December 31, 2011		857,500		$	1.37		8.06	$	-
Exercisable at December 31, 2011		525,500		$	1.24		7.33	$	-
Weighted average fair value of options granted during the six months ended December 31, 2011				$	1.34
Balance at June 30, 2012		857,500		$	1.36		7.96
Granted		235,000		$	0.90		10.00
Exercised		-		$	-		-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2012		1,092,500		$	1.26		7.90	$	-
Exercisable at December 31, 2012		756,831		$	1.38		7.37	$	-
Weighted average fair value of options granted during the six months ended December 31, 2012				$	0.65

Non-Employee, Non-Director Options [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of Stock Option Activity Under Stock Option and Incentive Plans

Non-Employee, Non-Director Options

	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life		Aggregate Intrinsic Value
Balance at June 30, 2011		540,000		$	1.16		3.14
Granted		-		$	-		-
Exercised		-		$	-
Forfeited		-		$	-		-
Expired		-		$	-		-
Exercisable at December 31, 2011		540,000		$	1.16		2.64	$	-
Exercisable at December 31, 2011		540,000		$	1.16		2.64	$	-
Weighted average fair value of options granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		540,000		$	1.16		3.14
Granted		-		$	-		-
Exercised		(100,000	)	$	0.50		-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2012		440,000		$	1.14		1.77	$	-
Exercisable at December 31, 2012		440,000		$	1.14		1.77	$	-
Weighted average fair value of options granted during the six months ended December 31, 2012					N/A

Warrants Issued as Settlements [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of Stock Option Activity Under Stock Option and Incentive Plans

Warrants Issued as Settlements

	Number of Warrants			Weighted Average Exercise Price		Remaining Contractual Life
Balance at June 30, 2011		474,508		$	1.05		1.91
Granted		-		$	-		-
Exercised		(130,000	)	$	0.50		-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2011		344,508		$	1.50		1.42
Exercisable at December 31, 2011		344,508		$	1.50		1.42
Weighted average fair value of warrants granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		344,058		$	1.50		0.92
Granted		350,000		$	0.60		5.00
Exercised		-		$	-		-
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2012		694,058		$	0.84		2.58
Exercisable at December 31, 2012		694,058		$	0.84		2.58
Weighted average fair value of warrants granted during the six months ended December 31, 2012				$	0.33

Warrants Issued for Cash or Services [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Summary of Stock Option Activity Under Stock Option and Incentive Plans

Warrants issued for cash or services

	Number of Warrants			Weighted Average Exercise Price		Remaining Contractual Life
Balance at June 30, 2011		4,651,200		$	1.46		2.68
Granted		-		$	-		-
Exercised		-		$	-		-
Exercise recission		45,000		$	1.25
Forfeited		-		$	-		-
Expired		-		$	-		-
Outstanding at December 31, 2011		4,696,200		$	1.46		2.18
Exercisable at December 31, 2011		4,696,200		$	1.46		2.18
Weighted average fair value of warrants granted during the six months ended December 31, 2011					N/A
Balance at June 30, 2012		4,481,200		$	1.46		2.46
Granted		50,000		$	0.63		5.00
Exercised		(1,820,000	)	$	0.50		-
Forfeited		-		$	-		-
Expired		(320,000	)	$	1.60		-
Outstanding at December 31, 2012		2,391,200		$	1.42		1.00
Exercisable at December 31, 2012		2,391,200		$	1.42		1.00
Weighted average fair value of warrants granted during the six months ended December 31, 2012				$	0.44

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Stockholders' Equity (Preferred Stock and Common Stock) (Details) (USD $)	1 Months Ended			3 Months Ended		6 Months Ended			1 Months Ended		6 Months Ended			1 Months Ended	6 Months Ended		1 Months Ended
	Dec. 28, 2012	Sep. 30, 2012	Aug. 31, 2012	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Jun. 30, 2012	Sep. 30, 2012 Principal Stockholder [Member]	Jan. 31, 2012 Lincoln Park Capital Fund, LLC. [Member]	Dec. 31, 2012 Lincoln Park Capital Fund, LLC. [Member]	Dec. 31, 2012 Directors [Member]	Dec. 31, 2011 Directors [Member]	Sep. 30, 2012 Warrant [Member]	Dec. 31, 2012 Warrant [Member]	Dec. 31, 2011 Warrant [Member]	Sep. 30, 2012 Stock Option [Member]	Sep. 30, 2012 Warrant And Options [Member]	Sep. 30, 2012 Warrant And Options [Member] Minimum [Member]	Sep. 30, 2012 Warrant And Options [Member] Maximum [Member]
Stockholders' Equity [Abstract]
Preferred stock, shares authorized				5,000,000		5,000,000		5,000,000
Preferred stock, par value per share				$ 0.001		$ 0.001		$ 0.001
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercised						1,820,000							(35,000)	1,640,000	(1,820,000)		100,000
Common stock issued upon exercise of options for cash						$ 910,000											$ 50,000
Exercised (with delivery of shares)																	$ 0.5	$ 0.5	$ 1.25	$ 1.75
Cost of repricing warrants to induce exercise					5,834	70,491	5,834
Related Party Transaction [Line Items]
Common stock issued for cash, shares		1,740,000	256,000							2,336,569	1,333,820
Proceeds from sale of equity		870,000								1,420,003	810,003
Proceeds from issuance of private placement			128,000
Debt Conversion [Line Items]
Debt conversion, line of credit, amount	$ 275,000		$ 179,375						$ 322,996
Shares issued for debt									665,992

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Related Party Transactions (Details) (USD $)	0 Months Ended	1 Months Ended				1 Months Ended		1 Months Ended
	Feb. 08, 2013	Dec. 28, 2012	Aug. 31, 2012	Dec. 31, 2012 CEO's Wife [Member]	Dec. 31, 2012 CEO and CTO's Mother [Member]	Sep. 30, 2012 Director Settlement [Member]	Dec. 31, 2012 Director Settlement [Member]	Sep. 30, 2012 Warrant to Director [Member]
Related Party Transaction [Line Items]
Weekly salary amount				$ 1,000	$ 600		$ 1,200
Proceeds from shares purchased		$ 250,000	$ 175,000
Granted	112,500					70,000		350,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities
Net loss	$ (3,211,484)	$ (2,873,211)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	25,346	25,519
Amortization of debt discounts	274,426
Amortization of stock based prepaid consulting		42,500
Vesting of restricted stock units	90,000
Stock option employee compensation expense	990,559	676,332
Cost of repricing warrants to induce exercise	70,491	5,834
Loss on settlement		300,000
Payment by insurance company of prior period accrued litigation expense	(200,000)
Changes in assets and liabilities:
Accounts receivable	11,444	64,958
Inventories	(29,665)	(178,007)
Prepaid expenses and other current assets	21,603	17,776
Accounts payable	(32,669)	(32,734)
Accrued expenses	(4,542)	(103,756)
Net cash used in operating activities	(1,994,491)	(2,054,789)
Cash flows from Investing Activities
Purchases of equipment	(3,285)	(26,922)
Net cash (used in) investing activities	(3,285)	(26,922)
Cash flows from Financing Activities
Proceeds from sale of stock through private placements	128,000	50,000
Proceeds from sale of stock under stock purchase agreement	810,003
Proceeds from exercise of warrants	910,000	65,000
Proceeds from exercise of stock options		33,335
Payment on related party note	(59,839)	89,380
Proceeds from convertible notes with third parties	175,000
Proceeds from convertible notes with related parties	250,000
Payments on Insurance Finance Contract	(19,033)	(19,900)
Net cash provided by financing activities	2,194,131	217,815
Net increase in cash and cash equivalents	196,355	(1,863,896)
Cash and cash equivalents - beginning	84,194	1,956,976
Cash and cash equivalents - ending	280,549	93,080
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	296	1,050
Cash paid for income taxes
Supplementary Disclosure of Non-cash Investing and Financing Activities:
Financing of prepaid insurance contracts	47,471	43,931
Beneficial conversion feature of convertible notes	190,280
Conversion of notes for common stock	$ 332,996

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Commitments and Contingencies

6 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

NOTE 5 - Commitments and Contingencies

The Company leases office and warehouse space located in Jupiter, Florida under a month-to-month lease and leases space in an industrial yard in Irvine, California under a one year lease which commenced in June 2011.

Rent expense for the six months ended December 31, 2012 and 2011 was $53,479 and $67,312, respectively.

In March 2011, the Compensation Committee approved new employment terms for each of the Company's three executive officers. The Executives will receive a base salary of $150,000 per year with the Committee having the authority to increase the Executive's base salary for the succeeding 12-month period with the increase based on profitability, positive cash flow or such other factors as the Committee deems important.

Effective September 1, 2011, the Compensation Committee approved an Employment Agreement with the Company's Chief Financial Officer (CFO). The CFO will receive a base salary of $146,000 per year with the Committee having the authority to increase the CFO's base salary for the succeeding 12-month period with the increase based on profitability, positive cash flow or such other factors as the Committee deems important. In addition, the CFO received options as previously described in Note 4.

On November 14, 2012, the Company approved new employment agreements for the Company's Chief Executive Officer, President, Chief Technology Officer and Chief Financial Officer. The employment agreements each provide for base salaries of $150,000 and 800,000 stock settled stock appreciation rights ("SARS") of which (i) 200,000 vested immediately, (ii) 200,000 vest upon the Company generating $3,000,000 in revenue in any 12-month period, (iii) another 200,000 vest upon the Company generating $5,000,000 in revenue in any 12-month period and (iv) another 200,000 vest upon the Company generating $6,000,000 in revenue in any 12-month period. The SARs are exercisable at $0.45 per share over a 10-year period. The Company's Chief Executive Officer, President and Chief Technology Officer agreed to cancel the 250,000 stock options granted to each of them in their prior employment agreements. These executives' base salary will increase to: (i) $170,000 upon the Company generating $3,000,000 in revenue in any 12-month period, (ii) $190,000 upon the Company generating $5,000,000 in any 12-month period and (iii) $200,000 upon the Company generating $6,000,000 in any 12-month period.

Additionally, the Company approved an employment agreement for the Company's Executive Chairman. The Executive Chairman receives a base salary of $200,000 per year and was granted 800,000 restricted stock units vesting on identical terms as the SARs. All of the five senior executives receive a monthly car allowance of $600 per month. The Compensation Committee will also have the discretion to award each of the executives a bonus based upon job performance, revenue growth or any other factors determined by the Compensation Committee. Each of the employment agreements was effective as of October 1, 2012 and is for a four-year term.

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 (which was used in the Company's business) in the Company's offices. A jury trial was held for the lawsuit in July 2012. At the conclusion of the trial, the plaintiff was awarded $200,000 under his invasion of privacy and fraudulent misrepresentation claim, $5,000 on the trespass claim, $841,000 on the breach of consulting agreement claim and $200,000 against the Company's CEO on a claim of civil theft, which by law results in an award of $600,000 for the plaintiff. The Company's board of directors approved the indemnification of the Company's CEO for the $600,000. The Company filed a post trial motion for Judgment Notwithstanding Verdict, New Trial and Remittitur, requesting that the judge set aside or reduce the amounts of the jury verdict.

Based upon the verdicts, the Company recorded a litigation accrual of $1,646,000 as of June 30, 2012. In November 2012, the insurance carrier paid the plaintiff $200,000 in settlement of the invasion of privacy and fraudulent misrepresentation awards. As a result, the Company reduced the amounts accrued for these awards resulting in other income of $200,000 for the period ended December 31, 2012. See Note 8.

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Concentrations (Details) (USD $)	3 Months Ended	6 Months Ended
	Dec. 31, 2012	Dec. 31, 2012
Concentration Risk [Line Items]
Raw materials	158,670	158,670
Vendor One Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		37.20%
Vendor Two Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		19.20%
Vendor Three Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		10.00%
Total supplier costs [Member]
Concentration Risk [Line Items]
Number of customers in concentration		3
Raw materials	88,000	88,000
Accounts Receivable [Member]
Concentration Risk [Line Items]
Number of customers in concentration		3
Accounts Receivable [Member] | Customer One Concentration Risk [Member]
Concentration Risk [Line Items]
Number of customers in concentration	3
Concentration risk, percentage		41.70%
Accounts Receivable [Member] | Customer Two Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		33.40%
Accounts Receivable [Member] | Customer Three Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		11.90%
Sales Revenue, Goods, Net [Member]
Concentration Risk [Line Items]
Number of customers in concentration		4
Number of products in concentration		2
Sales Revenue, Goods, Net [Member] | Customer One Concentration Risk [Member]
Concentration Risk [Line Items]
Number of customers in concentration	4
Concentration risk, percentage		18.50%
Sales Revenue, Goods, Net [Member] | Customer Two Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		15.60%
Sales Revenue, Goods, Net [Member] | Customer Three Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		12.80%
Sales Revenue, Goods, Net [Member] | Customer Four Concentration Risk [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		11.10%
Fire Ice Segment [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		87.50%
Soil 2 O Segment [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		12.50%
Soil 2 O Sales Revenue Percentage [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		72.50%
Soil 2 O Dust Control [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		27.50%
Fire Ice Product Sales Revenue [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		84.00%
Fire Ice Home Defense Sales Revenue [Member]
Concentration Risk [Line Items]
Concentration risk, percentage		16.00%

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Convertible and Non-Convertible Note Agreements (Details) (USD $)	0 Months Ended	1 Months Ended				3 Months Ended		6 Months Ended			1 Months Ended					0 Months Ended		1 Months Ended		3 Months Ended	1 Months Ended
	Feb. 08, 2013	Dec. 28, 2012	Sep. 30, 2012	Aug. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2012	Dec. 31, 2011	Mar. 29, 2009	Dec. 31, 2011 Chief Executive Officer [Member]	Dec. 31, 2011 Former President and CEO, David C. Bupp [Member]	Dec. 31, 2011 Chief Financial Officer [Member]	Feb. 28, 2011 Reduction In Principal Amount Of Line Of Credit [Member]	Feb. 28, 2011 Remaining Principal In Line Of Credit Conversion [Member]	Mar. 09, 2012 Six Month Convertible Third Party [Member]	Mar. 10, 2012 Director [Member]	Sep. 30, 2012 Principal Stockholder [Member]	Mar. 29, 2012 Principal Stockholder [Member]	Sep. 28, 2012 Principal Stockholder [Member]	Sep. 30, 2012 One-Year Convertible Note Cancelling March 9, 2012 Note [Member]	Sep. 30, 2012 One-Year Convertible Cancelling March 10, 2012 Note [Member]
Debt Conversion [Line Items]
Line of credit, borrowing capacity										$ 2,500,000
Debt, interest rate		10.00%								5.00%	0.70%	5.00%	5.00%		5.00%	5.00%	5.00%		5.00%		12.00%	12.00%
Shares issued for debt														892,857				665,992
Number of shares callable by warrants														1,000,000	300,000
Exercise price of shares called by warrants			0.5											1.25	1.75
Debt conversion, line of credit, amount		275,000		179,375										1,000,000	1,497,483			322,996
Value of shares issued			150,000												1.12
Convertible note, conversion price		$ 0.35		$ 0.5												$ 0.5	$ 0.5		$ 0.5		$ 0.5	$ 0.5
Interest accrued						3,318		3,318											74,874
Interest expense						97,226	19,328	314,054	38,487										8,121
Debt discount		25,000		4,375		85,368		85,368								84,562	63,038		199,798		35,138	24,971
Debt instrument, face amount		23,571		106,600		3,475		3,475								107,625	75,000		332,996		120,540	86,100
Proceeds from the issuance of 5.0% convertible notes		250,000		175,000												105,000	76,875		250,000
Amortization of beneficial conversion feature related to convertible notes		389																		97,703	53,668	31,839
Amortization of original issue discounts related to convertible notes		412																		3,972	5,301	3,527
Proceeds from convertible notes with related parties								250,000			10,000	29,380	50,000
Repayments of related party debt								59,839	(89,380)		9,839	20,000	35,000
Granted, exercise price	$ 0.39
Common stock shares granted	112,500
Compensation cost increase					$ 15,067