<HTML>
<HEAD>
<TITLE>FORM S-1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">As filed with the Securities and Exchange
Commission on September&nbsp;25, 2003</FONT></B>
</DIV>

<DIV align="right">
<B><FONT size="2">Registration
No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B>
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<P align="center">
<B><FONT size="4">UNITED STATES SECURITIES AND EXCHANGE
COMMISSION</FONT></B>

<DIV align="center">
<B>Washington, D.C. 20549</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="5">Form&nbsp;S-1</FONT></B>

<DIV align="center">
<B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="6">Marshall Edwards, Inc.</FONT></B>

<DIV align="center">
<I><FONT size="2">(Exact name of registrant as specified in its
charter)</FONT></I>
</DIV>

<P align="center">
<B><FONT size="2">Delaware</FONT></B>

<DIV align="center">
<I><FONT size="2">(State or other jurisdiction of incorporation
or organization)</FONT></I>
</DIV>

<P align="center">
<B><FONT size="2">2834</FONT></B>

<DIV align="center">
<I><FONT size="2">(Primary Standard Industrial Classification
Code Number)</FONT></I>
</DIV>

<P align="center">
<B><FONT size="2">51-0407811</FONT></B>

<DIV align="center">
<I><FONT size="2">(I.R.S. employer Identification
Number)</FONT></I>
</DIV>

<P align="center">
<B><FONT size="2">Marshall Edwards, Inc.</FONT></B>

<DIV align="center">
<B><FONT size="2">140 Wicks Road</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">North Ryde NSW 2113</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Australia</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(011)&nbsp;61 2 8877 6196</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Address, including zip code, and telephone
number,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">including area code, of registrant&#146;s
principal executive offices)</FONT></I>
</DIV>

<P align="center">
<B><FONT size="2">The Corporation Trust Company</FONT></B>

<DIV align="center">
<B><FONT size="2">The Corporation Trust Center</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">1209 Orange Street</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">Wilmington, Delaware 19801</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(302)&nbsp;658-7581</FONT></B>
</DIV>

<DIV align="center">
<I><FONT size="2">(Name, address, including zip code, and
telephone number,</FONT></I>
</DIV>

<DIV align="center">
<I><FONT size="2">including area code, of agent for
service)</FONT></I>
</DIV>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><I><FONT size="2">With copies to:</FONT></I></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="32%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B><FONT size="2">David R. Seaton<BR>
    Secretary<BR>
    Marshall Edwards, Inc.<BR>
    140 Wicks Road<BR>
    North Ryde NSW 2113<BR>
    Australia<BR>
    (011) 61 2 8877 6196</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Steven A. Navarro, Esq.<BR>
    Stephanie M. Gulkin, Esq.<BR>
    Morgan, Lewis &#38; Bockius LLP<BR>
    101 Park Avenue<BR>
    New York, New York 10178<BR>
    (212) 309-6000</FONT></B></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <B><FONT size="2">Robert B. Murphy, Esq.<BR>
    Raymond A. Miller, Esq.<BR>
    Pepper Hamilton LLP<BR>
    Hamilton Square<BR>
    600 Fourteenth Street, N.W.<BR>
    Washington, D.C. 20005-2004<BR>
    (202) 220-1200</FONT></B></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;<B>Approximate date of
commencement of proposed sale to the public:</B> As soon as
practicable after this Registration Statement is declared
effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule&nbsp;415 under the Securities Act of 1933, check the
following
box:&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#120;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is filed to register additional
securities for an offering pursuant to Rule&nbsp;462(b) under
the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If this Form is a post-effective amendment filed
pursuant to Rule&nbsp;462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;
<FONT size="2">If delivery of the prospectus is expected to be
made pursuant to Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;</FONT>
</FONT>

<P align="center">
<B><FONT size="2">CALCULATION OF REGISTRATION FEE</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="34%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="12%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="15%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Proposed Maximum</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount of</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Title of Each Class of</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Aggregate</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Registration</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Securities to be Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">to be Registered</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Per Unit</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Offering Price</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Fee</FONT></B></TD>
</TR>

<TR>
    <TD colspan="9"></TD>
</TR>

<TR>
    <TD colspan="9" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock units consisting of common stock and
    warrants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    &nbsp;<FONT size="2">2,300,000 units(1)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$6.50(2)(3)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$14,950,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$1209.46
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock, par value $.00000002 per share,
    underlying units
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    &nbsp;<FONT size="2">2,300,000 shares(1)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$&nbsp;&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$&nbsp;&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$&nbsp;&#151;
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Warrants underlying units
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    &nbsp;<FONT size="2">2,300,000 warrants(1)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$&nbsp;&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$&nbsp;&#151;
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$&nbsp;&#151;
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock, par value $.00000002 per share,
    underlying warrants
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="bottom">
    &nbsp;<FONT size="2">2,300,000&nbsp;shares(1)(4)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$7.80(2)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$17,940,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$1451.35
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Totals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$32,890,000
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="bottom">
    <FONT size="2">$2660.81
    </FONT></TD>
</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

<TR>
    <TD colspan="9" align="left"><HR size="1" noshade></TD>

</TR>

</TABLE>
</CENTER>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(1)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Includes the overallotment option granted to the
    underwriter of 300,000 common stock units consisting of 300,000
    shares and 300,000 warrants.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(2)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Estimated solely for the purpose of calculating
    the amount of the registration fee pursuant to Rule&nbsp;457(a)
    under the Securities Act of 1933, as amended.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(3)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">The proposed price of $6.50&nbsp;per common stock
    unit reflects the price of the common stock and warrants.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">(4)&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Pursuant to Rule&nbsp;416 of the Securities Act
    this registration statement also covers such additional number
    of shares of common stock that may become issuable under any
    stock split, stock dividend or similar transaction.
    </FONT></TD>
</TR>

</TABLE>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">&nbsp;&nbsp;&nbsp;
<B><FONT size="2">The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section&nbsp;8(a) of the Securities Act or until the
Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section&nbsp;8(a), may
determine.</FONT></B>

<P align="center">
<HR size="1" width="100%" align="center" noshade>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="1" cellpadding="5"><TR><TD>
<B><FONT size="2" color="#E8112D">The information contained in
this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and we are
not soliciting an offer to buy these securities in Australia or
in any state or other jurisdiction where the offer or sale is
not permitted.</FONT><FONT size="2"> <BR>
</FONT></B>
</TD></TR></TABLE>

<P align="center">
<B><FONT size="2" color="#E8112D">SUBJECT TO COMPLETION, DATED
SEPTEMBER&nbsp;25, 2003</FONT></B>

<P align="left">
<B><FONT size="2">PROSPECTUS</FONT></B>

<P align="center">
<B><FONT size="6">Marshall Edwards, Inc.</FONT></B>

<P align="center">
<B><FONT size="4">2,000,000 Common Stock Units</FONT></B>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
is our initial public offering in the United States. This
prospectus covers the sale of up to an aggregate of 2,000,000
common stock units. Each common stock unit consists of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">one share of our common stock; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">one warrant to purchase a share of our common
    stock at an exercise price equal to 120% of the initial public
    offering price.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
estimated initial public offering price for the common stock
units is between $4.50 and $6.50 per unit.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
part of this offering, we are offering up to an aggregate of
1,500,000 common stock units at the initial public offering
price to U.S. holders of ordinary shares and American Depositary
Receipts of Novogen Limited, our parent company, that owned
their shares as of the close of business
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003, and to our U.S.&nbsp;stockholders, excluding Novogen, that
owned their shares as of the close of business
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003. See the section entitled &#147;Plan of
Distribution&nbsp;&#151; Directed Share Subscription
Program.&#148;
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
completion of this offering, Novogen will own approximately
91.6% of our outstanding common stock.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have applied to list our common stock on The Nasdaq SmallCap
Market under the symbol &#147;<B>MSHL</B>.&#148; Our common
stock is listed on the Alternative Investment Market of the
London Stock Exchange plc under the symbol &#147;MSH.&#148; We
will apply to list the shares of common stock being offered
hereby on the Alternative Investment Market. The last reported
sale price
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003 was &#163;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share, or
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per share
based on the noon buying rate for sterling of &#163;1.00 =
$ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003.
</FONT>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
shares of common stock and warrants comprising the units will
separate immediately upon completion of this offering. The
warrants will not be listed on any national securities exchange,
automated quotation system or on the Alternative Investment
Market.
</FONT>

<P align="left">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investment
in the common stock units involves a high degree of risk. See
&#147;Risk Factors&#148; beginning on page&nbsp;6.</B>

<P align="center">
<B><FONT size="2">Underwritten Public Offering</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="38%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Underwriting Discounts</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Proceeds to</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Public Offering Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">and Commissions</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Marshall Edwards, Inc.</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Per Common Stock Unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center">
<B><FONT size="2">Directed Share Subscription Program</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="43%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Proceeds to</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Public Offering Price</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Management Fee</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Marshall Edwards, Inc.</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Per Common Stock Unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Aggregate Offering Proceeds
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have granted the underwriter an option to purchase up to an
additional 300,000 common stock units at the public offering
price, solely to cover over-allotments.
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="left">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.</B>
</FONT>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<B><FONT size="5">Janney Montgomery Scott
</FONT><FONT size="4">LLC</FONT></B>

<P align="center">
<HR size="1" width="26%" align="center" noshade>

<P align="center">
<FONT size="2">The date of this prospectus
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003.
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">PROSPECTUS SUMMARY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">DETERMINATION OF OFFERING PRICE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">PRICE RANGE OF OUR COMMON STOCK</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">DIVIDEND POLICY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">CAPITALIZATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">DILUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">BUSINESS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">MANAGEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">BENEFICIAL OWNERSHIP OF COMMON STOCK</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#015">DESCRIPTION OF OUR SECURITIES</A></TD></TR>
<TR><TD colspan="9"><A HREF="#016">SHARES ELIGIBLE FOR FUTURE SALE</A></TD></TR>
<TR><TD colspan="9"><A HREF="#017">PLAN OF DISTRIBUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#018">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#019">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#020">AVAILABLE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#021">ANNEX A</A></TD></TR>
<TR><TD colspan="9"><A HREF="#022">INDEX TO CONSOLIDATED FINANCIAL STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#023">SIGNATURES</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv3w1.txt">CERTIFICATE OF INCORPORATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv3w2.txt">BYLAWS</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv10w1.txt">AMENDED AND RESTATED LICENSE AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv10w2.txt">AMEND. & RESTATED MANUFACTURING LICENSE/SUPPLY AGR</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv10w3.txt">AMENDED AND RESTATED LICENSE OPTION DEED</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv10w4.txt">AMENDED AND RESTATED SERICES AGREEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv10w5.txt">GUARANTEE AND INDEMNITY</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv10w6.txt">MARSHALL EDWARDS INC. SHARE OPTION PLAN</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv10w7.txt">FORM OF OUTSTANDING WARRANT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv10w8.txt">FORM OF OUTSTANDING WARRANT</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv21.txt">SUBSIDIARIES OF MARSHALL EDWARDS, INC.</A></TD></TR>
<TR><TD colspan="9"><A HREF="y90124exv23w2.txt">CONSENT OF ERNST & YOUNG LLP</A></TD></TR>
</TABLE>
</CENTER>
<!-- /TOC -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">TABLE OF CONTENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="90%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Page</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">PROSPECTUS SUMMARY
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">RISK FACTORS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">USE OF PROCEEDS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">16</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DETERMINATION OF OFFERING PRICE
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">PRICE RANGE OF OUR COMMON STOCK
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DIVIDEND POLICY
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CAPITALIZATION
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DILUTION
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BUSINESS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">MANAGEMENT
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">38</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">BENEFICIAL OWNERSHIP OF COMMON STOCK
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">DESCRIPTION OF OUR SECURITIES
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">SHARES ELIGIBLE FOR FUTURE SALE
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">53</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">PLAN OF DISTRIBUTION
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">LEGAL MATTERS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">EXPERTS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">AVAILABLE INFORMATION
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">56</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">ANNEX A&nbsp;&#151; GLOSSARY OF TERMS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">A-1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">No document in connection with this offering,
including this prospectus, may be issued or passed on in the
United Kingdom to, or is directed at, any person, other than:
(i)&nbsp;to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses and
otherwise in circumstances which will not result in an offer to
the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995 (as amended) and in
circumstances where Section&nbsp;21(1) of the Financial Services
and Markets Act 2000 does not apply by virtue of such person
being an investment professional as that term is defined in
Article&nbsp;19 of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2001; or (ii)&nbsp;to persons to
whom the document may otherwise lawfully be issued. Nothing in
this prospectus should be construed as investment advice to any
person. If you are a recipient of this prospectus outside of the
scope of the above criteria then you may not act upon the
content of this prospectus.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><FONT size="2">We are not making this offering described in
this prospectus in Australia or in any state or other
jurisdiction in which it is unlawful to do so nor are we selling
or accepting any offers to purchase any shares of our common
stock from persons who are residents of such
jurisdictions.</FONT></B>

<P align="center">

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<!-- link1 "PROSPECTUS SUMMARY" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center">
<B><FONT size="2">PROSPECTUS SUMMARY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">This summary highlights selected information
contained elsewhere in this prospectus. You should read the
entire prospectus carefully, including the Risk Factors section
beginning on page&nbsp;6 and our consolidated financial
statements and related notes beginning on page F-1 before making
an investment decision.</FONT></I>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">References to &#147;we,&#148; &#147;us,&#148;
or &#147;our&#148; refer to Marshall Edwards, Inc. and its
consolidated subsidiary. References to &#147;Novogen&#148; refer
to Novogen Limited and its consolidated subsidiaries, other than
Marshall Edwards, Inc. and its subsidiary, Marshall Edwards Pty
Limited. Unless specifically stated otherwise, the information
in this prospectus assumes no exercise of the underwriter&#146;s
over-allotment option. We have attached as Annex A a glossary of
technical and scientific terms that we use in this
prospectus.</FONT></I>

<P align="center">
<B><FONT size="2">Our Company</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a developmental stage pharmaceutical
company involved in the development and commercialization of
drugs for the treatment of cancer. We are presently engaged in
the clinical development of a drug candidate called phenoxodiol
that we believe may have broad application against a wide range
of cancers. Phenoxodiol appears to target a number of key
components involved in cancer cell survival and proliferation
based on the emerging field of signal transduction regulation,
with little or no effect on normal cells.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our strategy is to undertake further clinical
development and testing of phenoxodiol leading ultimately to its
commercialization and wide scale distribution. Pre-clinical
testing has shown phenoxodiol to have broad anti-cancer action
against an extensive library of human cancer cell lines,
including prostate, ovarian and squamous cell carcinoma, or SCC.
Phenoxodiol commenced Phase I clinical studies in Australia in
2000 and currently is undergoing Phase Ib/IIa and Phase&nbsp;II
studies in intravenous dosage form in the United States and
Australia. In January 2001, the U.S. Food and Drug
Administration (the FDA) granted Investigational New Drug
(IND)&nbsp;status for phenoxodiol in the intravenous dosage
form, and in June 2003 the FDA granted IND status for
phenoxodiol in the oral dosage form.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We were incorporated in December 2000 as a
wholly-owned subsidiary of Novogen Limited, an Australian
registered company, and commenced operations in May 2002.
Novogen&#146;s ordinary shares trade on the Australian Stock
Exchange under the symbol &#147;NRT&#148; and American
Depositary Receipts (ADRs) trade in the United States under the
symbol &#147;NVGN&#148; on the Nasdaq National Market. In May
2002, we sold 2,523,000 shares of our common stock and warrants
to purchase an equal number of shares in a private placement
raising $10.1 million in gross proceeds. These shares are
admitted for trading on the Alternative Investment Market of the
London Stock Exchange under the symbol &#147;MSH.&#148; Novogen
currently controls approximately 95% of our outstanding common
stock.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A subsidiary of Novogen has granted to us,
through our Australian subsidiary, Marshall Edwards Pty Limited,
an exclusive non-transferable license under its patent rights
and intellectual property rights in its relevant know-how to
develop, market and distribute all forms of administering
phenoxodiol for anti-cancer uses, except topical applications.
Our exclusive rights under our amended and restated license
agreement continue until the date of expiration or lapsing of
Novogen&#146;s last to expire patent right covering phenoxodiol
as an anti-cancer agent. In addition, we have the exclusive
first right to accept and an exclusive last right to match any
proposed dealing by Novogen in its intellectual property rights
with third parties for the development of other anti-cancer
drugs derived from its library of compounds, other than for
topical applications.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Phenoxodiol has been identified as a potential
putative metabolite of daidzein, a naturally occurring
isoflavone. Phenoxodiol does not appear, however, to have been
isolated or identified in mammals. Novogen scientists first
synthesized phenoxodiol as part of a program of drug discovery
based on an isoflavonoid ring chemical structure. Novogen is a
leader in the discovery and development of new drugs based on
signal transduction regulation, which it believes offers
potential for effective, well-tolerated treatment of common
degenerative diseases including cancer.
</FONT>
</DIV>

<P align="center"><FONT size="2">1
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">Market Opportunity</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The primary focus in the development of
phenoxodiol is currently in connection with ovarian cancer, SCC
of the cervix, vagina, vulva and skin, and prostate cancer,
although we believe that, subject to further successful clinical
research and development, phenoxodiol may have potential uses in
other forms of human cancers. The cancers for which phenoxodiol
is intended to be used are relatively common and we believe, in
general, poorly managed with current therapeutics. The American
Cancer Society (the ACS) has estimated that in 2003 there will
be 220,900 new cases of prostate cancer and 28,900 people will
die as a result of this cancer in the United States. The ACS has
also estimated that in 2003 there will be 25,400 new cases of
ovarian cancer diagnosed and 14,300 will die as a result of this
cancer in the United States. For SCC of the cervix, vagina and
vulva, the ACS estimates that in the year 2003, there will be
18,600 new cases diagnosed and that there will be 5,700 deaths
caused by these cancers in the United States. The ACS estimates
that 2,200 deaths will occur in the United States as a result of
cutaneous SCC.
</FONT>

<P align="center">
<B><FONT size="2">Recent Developments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The oral form of phenoxodiol was granted IND
status by the FDA in June 2003. This action will permit the
commencement of a study in collaboration with Yale University
School of Medicine in patients with cancer of the cervix, vulva
and vagina where phenoxodiol will be used in patients on a
monotherapy basis daily for periods of up to four weeks prior to
surgery or radiotherapy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A Phase II study at Yale University School of
Medicine commenced in October 2002 of the intravenous dosage
form of phenoxodiol in women with ovarian cancer. The clinical
trial is based on laboratory studies at Yale University that
showed phenoxodiol to be effective at killing ovarian cancer
cells, including those resistant to all standard anti-cancer
drugs. The study is fully enrolled using 40 patients with
advanced, metastatic ovarian cancer that has become unresponsive
to at least two standard chemotherapies.
</FONT>

<P align="center">
<B><FONT size="2">Our Address and Telephone Number</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our principal executive office is located at 140
Wicks Road, North Ryde NSW 2113, Australia, and our telephone
number is 011-61-2-8877-6196. Our Internet web site address is
http://www.marshalledwardsinc.com. The information contained on
our web site shall not be deemed to constitute a part of this
prospectus.
</FONT>
</DIV>

<P align="center"><FONT size="2">2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">This Offering</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Securities Offered
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">2,000,000 common stock units, each unit
    consisting of one share of common stock and one warrant to
    purchase a share of our common stock
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Offering Price
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    common stock unit
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Warrant Terms
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Each warrant is exercisable for the purchase of
    one share of our common stock at an exercise price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    share. The warrants are immediately exercisable and expire three
    years from their date of issuance.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Plan of Distribution:
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;Directed Share Subscription Program
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Up to 1,500,000 common stock units will be
    offered by subscription to U.S.&nbsp;holders of our common stock
    as
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2003, except Novogen, and to U.S. holders of Novogen&#146;s
    ordinary shares and ADRs as
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
    2003. Janney Montgomery Scott LLC will act as our dealer manager
    in connection with our directed share subscription program.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">&nbsp;&nbsp;Underwritten Offering
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">500,000 common stock units will be sold on a firm
    commitment basis by Janney Montgomery Scott LLC, as underwriter,
    along with any units not purchased in the directed share
    subscription program.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Shares Outstanding After <BR>
     this Offering
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">54,032,000 shares, not including the 2,000,000
    shares of common stock underlying the warrants offered hereby
    and 2,514,000 shares issuable under previously issued warrants.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Use of Proceeds
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Approximately $1.1&nbsp;million will be used to
    commence Phase&nbsp;II clinical trials of phenoxodiol as a
    monotherapy in earlier stage cancers, and approximately
    $4.2&nbsp;million will be used to commence Phase&nbsp;II
    clinical trials of phenoxodiol in combinational therapy with
    other anti-cancer drugs for late stage chemo-resistant tumors.
    Actual amounts spent on these planned clinical trials may change
    subject to satisfactory results of ongoing clinical trials. The
    balance will be used for other corporate purposes, including
    potential payments to Novogen under the terms of the license
    agreement, and further clinical trials pending success of the
    current clinical programs.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Proposed Nasdaq Symbol
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">MSHL
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Listing on AIM
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Our common stock is listed on the Alternative
    Investment Market of the London Stock Exchange (the AIM) under
    the symbol &#147;MSH&#148;. We will apply to list the shares of
    common stock being offered hereby on the AIM. The AIM is the
    London Stock Exchange&#146;s global market for smaller growing
    companies.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <FONT size="2">Risk Factors
    </FONT></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Investment in our securities involves a high
    degree of risk and could result in a loss of your entire
    investment. See &#147;Risk Factors&#148; beginning on
    page&nbsp;6 to read about factors you should consider before
    buying our common stock units.
    </FONT></TD>
</TR>

</TABLE>
</DIV>

<P align="center"><FONT size="2">3
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">Information Agent</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Innisfree M&#38;A Incorporated will act as our
information agent to respond to any questions that our eligible
stockholders and eligible holders of ordinary shares and ADRs of
Novogen may have regarding the process for exercising
subscription rights in connection with the directed share
subscription component of this offering. Any questions or
requests for assistance concerning the method of subscribing for
common stock units or for additional copies of this prospectus
can be directed to the information agent at (877)&nbsp;456-3510.
</FONT>

<P align="center">
<I><FONT size="2">The Information Agent for this Offering
is:</FONT></I>

<P align="center">
<IMG src="y90124y9012401.gif" alt="LOGO">

<P align="center">
<FONT size="2">501 Madison Avenue, 20th Floor
</FONT>

<DIV align="center">
<FONT size="2">New York, New York 10022
</FONT>
</DIV>

<DIV align="center">
<FONT size="2">Banks and Brokers Call Collect: (212) 750-5833
</FONT>
</DIV>

<P align="center">
<FONT size="2">All Others Call Toll-Free: (877) 456-3510
</FONT>
</DIV>

<P align="center"><FONT size="2">4
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<P align="center">
<B><FONT size="2">Summary Historical Consolidated Financial
Data</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a development stage company. The following
table sets forth our summary historical consolidated financial
data derived from our audited consolidated financial statements
as of June&nbsp;30, 2003 and 2002, included in this prospectus.
These financial statements have been audited by Ernst &#38;
Young LLP, independent auditors. The summary financial
information should be read in conjunction with
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations,&#148; &#147;Risk
Factors&#148; and the consolidated financial statements and the
notes thereto included elsewhere in this prospectus.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period from</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;1, 2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">through June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(in thousands, except share and per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Statement of Operations Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest and other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss arising during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss per common share.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.058</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.002</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average shares used to calculate loss
    per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,023,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,769,581</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock outstanding at year end
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,032,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,023,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shareholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>
</DIV>

<P align="center"><FONT size="2">5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "RISK FACTORS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center">
<B><FONT size="2">RISK FACTORS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I><FONT size="2">Investors should carefully consider the
following risks, as well as the other information contained in
this prospectus before investing in our common stock units. If
any of the following risks actually materializes, our business
could be harmed, the price of our shares of common stock could
decline and investors might lose all or part of their
investment.</FONT></I>

<P align="left">
<B><FONT size="2">Risks Related to Our Business</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We have a limited operating history and we
    are likely to incur operating losses for the foreseeable
    future.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Investors should consider our prospects in light
of the risks and difficulties frequently encountered by early
stage and developmental companies. Although we were incorporated
in December 2000, we have only been in operation since May 2002.
We have incurred net losses since our inception, including net
losses of $3,033,000 and $123,000 for the years ended
June&nbsp;30, 2003 and 2002, respectively. We anticipate that we
will incur operating losses and negative cash flow for the
foreseeable future. We have not yet commercialized any products
and cannot be sure that we will ever be able to do so, or that
we may ever become profitable. We expect to expand our clinical
trials significantly, which will result in increasing losses,
and may continue to incur substantial losses even if we begin to
generate revenues from the distribution and sale of phenoxodiol.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If we are unable to successfully develop
    and commercialize phenoxodiol or license other viable drug
    candidates, our ability to sustain future operations will be
    significantly diminished.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are currently developing only one drug,
phenoxodiol. We cannot guarantee that phenoxodiol will be
successful. Although we have rights to potentially develop other
related compounds discovered and developed by Novogen under the
terms of our license option deed with Novogen, our rights under
the license agreement are limited to the commercialization of
phenoxodiol as an anti-cancer agent and these rights
specifically exclude phenoxodiol in a topical application. If we
are unable to develop successfully and commercialize phenoxodiol
or other viable drug candidates, we may be required to cease or
reduce our operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">If we do not receive regulatory approval
    for phenoxodiol or such approval is withdrawn, we will not be
    able to commercialize phenoxodiol.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We need regulatory approval in order to
commercialize phenoxodiol. We may never receive regulatory
approval or if we do receive regulatory approval, it may be
limited to those disease states and conditions for which
phenoxodiol has proven to be safe and effective. Phenoxodiol is
currently in Phase&nbsp;II clinical trials in intravenous dosage
form to treat late stage ovarian cancer. Phenoxodiol has
received IND status in the United States for the oral dosage
form. The oral dosage form is also in clinical trials in
Australia to treat prostate cancer and SCC. Product approval, if
granted, can be withdrawn for failure to comply with regulatory
requirements or upon the occurrence of adverse events following
commercial introduction. In addition, our ability to market
phenoxodiol in overseas countries is contingent upon receiving
the required regulatory approvals in those countries. If we
cannot commercialize phenoxodiol, we may be required to cease or
reduce our operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our ability to achieve profitability is
    dependent on a number of factors, some of which are beyond our
    control.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our ability to achieve profitability is dependent
on a number of factors, including the ability to successfully
complete clinical development efforts, to obtain regulatory
approval for phenoxodiol and to successfully commercialize
phenoxodiol. We will rely on Novogen to supply phenoxodiol and
to provide services to us, including research and development
activities, manufacturing and all of our personnel. The amended
and restated license agreement, services agreement and
manufacturing license and supply agreement with Novogen all
provide that the supply of phenoxodiol and the provision of
services will be on a &#147;cost plus mark up&#148; basis. We
have no direct control over the costs of manufacturing
phenoxodiol or of the
</FONT>

<P align="center"><FONT size="2">6
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">provision of these services and profitability
could be affected if these costs change significantly. See
&#147;Certain Relationships and Related Transactions&#148; for
more information about our agreements with Novogen.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Final approval by regulatory authorities of
    phenoxodiol for commercial use may be delayed, limited or
    prevented, any of which would adversely affect our ability to
    generate operating revenues.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any of the following factors may serve to delay,
limit or prevent the final approval by regulatory authorities of
phenoxodiol for commercial use:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">phenoxodiol is in the early stages of clinical
    development and we will need to conduct significant clinical
    testing to prove safety and efficacy before applications for
    marketing can be filed with the FDA, or with the regulatory
    authorities of other countries, to approve phenoxodiol for final
    use;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">data obtained from pre-clinical and clinical
    tests can be interpreted in different ways, which could delay,
    limit or prevent regulatory approval;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">it may take us many years to complete the testing
    of phenoxodiol or any other drug candidates, and failure can
    occur at any stage of this process;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">negative or inconclusive results or adverse
    medical events during a clinical trial could cause us to delay
    or terminate our development efforts;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">there is relatively limited scientific
    understanding of the means by which cells respond to chemical
    signals that reach them through the bloodstream, which we refer
    to as multiple signal transduction regulation or MSTR, the class
    of drug compounds to which phenoxodiol belongs; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the commercialization of phenoxodiol may be
    delayed if the FDA or another regulatory authority requires us
    to expand the size and/or scope of the clinical trials.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not be able to establish the
    strategic partnerships necessary to market and distribute
    phenoxodiol.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A key part of our business plan is to establish
relationships with strategic partners. We must successfully
contract with third parties to package, market and distribute
phenoxodiol. There is no assurance that we will be able to
negotiate commercially acceptable licensing or other agreements
for the future exploitation of phenoxodiol, including the
continued clinical development, manufacture or marketing of
phenoxodiol. If we are unable to successfully contract for these
services, or if arrangements for these services are terminated,
we may have to delay our commercialization program for
phenoxodiol, which will adversely affect our ability to generate
operating revenues.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may not be able to secure and maintain
    suitable research institutions to conduct our clinical
    trials.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We rely on hospitals and cancer clinics to
conduct our clinical trials. If we are unable to retain suitable
research institutions on acceptable terms, or if any resulting
agreement is terminated and we are unable to quickly replace the
applicable research institution with another qualified
institution, the research could be delayed and we may be unable
to complete development of, or commercialize, phenoxodiol, which
will adversely affect our ability to generate operating revenues.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Any failure in our clinical trials could
    impair the commercial prospects for phenoxodiol.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Clinical trials have a high risk of failure. A
number of companies in the pharmaceutical industry, including
biotechnology companies, have suffered significant setbacks in
advanced clinical trials, even after achieving promising results
in earlier trials. If we experience delays in the testing or
approval process or need to perform more or larger clinical
trials than originally planned, our commercial prospects for
phenoxodiol or any other drug candidates may be impaired and we
may be required to cease or reduce our operations.
</FONT>

<P align="center"><FONT size="2">7
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may need to raise additional funds to
    cover our operating expenses due to a number of factors, some of
    which are beyond our control.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on our current plans, we believe that the
net proceeds of this offering will provide sufficient funds to
complete the current Phase&nbsp;Ib/IIa and Phase&nbsp;II
clinical trials and to commence Phase&nbsp;II clinical trials of
phenoxodiol as a monotherapy in earlier stage cancers and to
commence Phase&nbsp;II clinical trials of phenoxodiol in
combinational therapy with other anti-cancer drugs for late
stage chemo-resistant tumors. We will require additional funds,
however, to further the evaluation beyond these current
objectives and to pursue the commercialization of phenoxodiol.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The actual amount of funds that we will need will
be determined by many factors, some of which are beyond our
control. As a result, we may need additional funds sooner than
we currently anticipate. These factors include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the progress of research activities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the number and scope of research programs;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the progress of pre-clinical and clinical
    development activities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the progress of the development efforts of
    Novogen or any other parties with whom we enter into research
    and development agreements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to establish and maintain current and
    new research and development and licensing arrangements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">our ability to achieve milestones under licensing
    arrangements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the costs involved in enforcing or defending
    patent claims and other intellectual property rights; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the costs and timing of regulatory approvals.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If our capital resources are insufficient to meet
future capital requirements, we will have to raise additional
funds. If we are unable to obtain additional funds on favorable
terms we may be required to cease or reduce our operations.
Also, if we raise more funds by selling additional shares of our
common stock or securities convertible into or exercisable for
shares of our common stock, your ownership interests may be
diluted.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our commercial opportunity will be reduced
    or eliminated if competitors develop and market products that
    are more effective, have fewer side effects or are less
    expensive than phenoxodiol.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The development of phenoxodiol or drug candidates
is highly competitive. A number of other companies have products
or drug candidates in various stages of pre-clinical or clinical
development to treat prostate cancer, ovarian cancer, SCC and
other cancers that are the current focus of phenoxodiol. Some of
these potential competing drugs are further advanced in
development than phenoxodiol and may be commercialized earlier.
Even if we are successful in developing effective drugs,
phenoxodiol may not compete successfully with products produced
by our competitors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our competitors include pharmaceutical companies
and biotechnology companies, as well as universities and public
and private research institutions. In addition, companies active
in different but related fields represent substantial
competition for us. Many of our competitors have significantly
greater capital resources, larger research and development
staffs and facilities and greater experience in drug
development, regulation, manufacturing and marketing than us.
These organizations also compete with us to recruit qualified
personnel, attract partners for joint ventures and license
technologies that are competitive with ours. As a result, our
competitors may be able to more easily develop technologies and
products that would render our technologies or our drug
candidates obsolete or non-competitive.
</FONT>

<P align="center"><FONT size="2">8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our right to develop and exploit
    phenoxodiol is subject to the terms and conditions of certain
    agreements with Novogen and such rights may be terminated under
    circumstances pursuant to those agreements, some of which may be
    beyond our control.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have licensed the intellectual property in the
phenoxodiol technology from Novogen. All forms of administering
phenoxodiol for the treatment of cancer are licensed to us,
excluding topical applications. If we fail to meet our
obligations under our license agreement, the manufacturing
license and supply agreement or the services agreement with
Novogen, any or all of these agreements may be terminated by
Novogen and we could lose our rights to develop phenoxodiol. In
addition, each of these agreements may be terminated immediately
by Novogen in the event that we undergo a change of control
without the consent of Novogen. A &#147;change of control&#148;
means a change in control of more than half the voting rights
attaching to the shares of our subsidiary, a change in control
of more than half of the issued shares of our subsidiary (not
counting any share which carries no right to participate beyond
a specified amount in the distribution of either profit or
capital) or a change in control of the composition of the board
of directors of our subsidiary.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">License rights comprise our most
    significant assets and a loss of these rights will likely cause
    us to cease operations.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The rights granted to us under our license
agreement, the manufacturing license and supply agreement and
the license option deed with Novogen are our only significant
assets. Any loss of the rights under any of these agreements
will significantly reduce our asset base and likely cause us to
cease operations.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The success of phenoxodiol is largely
    dependent on Novogen&#146;s ability to obtain and maintain
    patent protection and preserve trade secrets, which cannot be
    guaranteed.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Patent protection and trade secret protection are
important to our business and our future will depend, in part,
on our ability and the ability of Novogen to maintain trade
secret protection, obtain patents and operate without infringing
the proprietary rights of others both in the United States and
abroad. Litigation or other legal proceedings may be necessary
to defend against claims of infringement, to enforce our
patents, or to protect our trade secrets or the trade secrets of
Novogen. Such litigation could result in substantial costs and
diversion of our management&#146;s attention.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The patent positions of pharmaceutical and
biotechnology companies can be highly uncertain and involve
complex legal and factual questions. Novogen has applied for
patents in a number of countries with respect to the use of
phenoxodiol for the treatment, prevention or cure of cancer. We
have licensed both issued patents and pending patent
applications from Novogen. Novogen has issued patents in the
United States, Australia and Singapore covering the use of
phenoxodiol to prevent or treat skin cancer from ultraviolet
damage. Novogen also has patents issued in Australia, Hong Kong,
New Zealand and the United Kingdom related to phenoxodiol for
the treatment of a variety of cancers and has recently received
a notice of allowance in the U.S. that is also related to
phenoxodiol for the treatment of a variety of cancers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen&#146;s applications may not proceed to
grant or may be amended to reduce the scope of protection of any
patent granted. The applications and patents may also be opposed
or challenged by third parties. Our commercial success will
depend, in part, on the ability of Novogen and us to obtain and
maintain effective patent protection for the technologies
underlying phenoxodiol and other compounds, and to successfully
defend patent rights in those technologies against third-party
challenges. As patent applications in the United States are
maintained in secrecy until published or issued and as
publication of discoveries in the scientific or patent
literature often lag behind the actual discoveries, we cannot be
certain that Novogen was the first to make the inventions
covered by its pending patent applications or issued patents or
that it was the first to file patent applications for such
inventions. Additionally, the breadth of claims allowed in
biotechnology and pharmaceutical patents or their enforceability
cannot be predicted. We cannot be sure that any additional
patents will issue from any of Novogen&#146;s patent
</FONT>

<P align="center"><FONT size="2">9
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">applications or, should any patents issue, that
we will be provided with adequate protection against potentially
competitive products. Furthermore, we cannot be sure that should
patents issue, they will be of commercial value to us, or that
private parties, including competitors, will not successfully
challenge our patents or circumvent our patent position in the
United States or abroad.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">In the event that Novogen does not comply
    with its obligations under a grant from the Australian
    government under which phenoxodiol was developed in part, our
    rights to use the intellectual property relating to phenoxodiol
    and developed by Novogen may revert back to the Australian
    government.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen developed phenoxodiol in part using funds
from the Australian government under what is known as the START
Program. Although Novogen believes that it has complied with its
obligations under the START Program, if the Australian
government disagrees, or if Novogen undergoes a change of
control, the Australian government has a right to demand that
intellectual property created during the course of the project
funded by the grant be vested back in the Australian government.
The Australian government may then license the intellectual
property rights related to phenoxodiol to other parties and may
demand other intellectual property rights from Novogen. Any such
reclamation by the Australian government could preclude our use
of Novogen&#146;s intellectual property in the development and
commercialization of phenoxodiol and we may have to compete with
other companies to whom the Australian government may license
the intellectual property.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Claims by other companies that we infringe
    their proprietary technology may result in liability for damages
    or stop our development and commercialization
    efforts.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pharmaceutical industry is highly competitive
and patents have been applied for by, and issued to, other
parties relating to products competitive with phenoxodiol.
Therefore, phenoxodiol and any other drug candidates may give
rise to claims that they infringe the patents or proprietary
rights of other parties existing now and in the future.
Furthermore, to the extent that we or Novogen or our respective
consultants or research collaborators use intellectual property
owned by others in work performed for us or Novogen, disputes
may also arise as to the rights in such intellectual property or
in resulting know-how and inventions. An adverse claim could
subject us to significant liabilities to such other parties
and/or require disputed rights to be licensed from such other
parties.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot be sure that any license required under
any such patents or proprietary rights would be made available
on terms acceptable to us, if at all. If we do not obtain such
licenses, we may encounter delays in product market
introductions, or may find that the development, manufacture or
sale of products requiring such licenses may be precluded. We
have not conducted any searches or made any independent
investigations of the existence of any patents or proprietary
rights of other parties.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We may be subject to substantial costs
    stemming from our defense against third-party intellectual
    property infringement claims.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Third parties may assert that we or Novogen are
using their proprietary information without authorization. Third
parties may also have or obtain patents and may claim that
technologies licensed to or used by us infringe their patents.
If we are required to defend patent infringement actions brought
by third parties, or if we sue to protect our own patent rights,
we may be required to pay substantial litigation costs and
managerial attention may be diverted from business operations
even if the outcome is not adverse to us. In addition, any legal
action that seeks damages or an injunction to stop us from
carrying on our commercial activities relating to the affected
technologies could subject us to monetary liability and require
us or Novogen or any third party licensors to obtain a license
to continue to use the affected technologies. We cannot predict
whether we or Novogen would prevail in any of these types of
actions or that any required license would be made available on
commercially acceptable terms or at all.
</FONT>

<P align="center"><FONT size="2">10
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The enforcement of civil liabilities
    against our officers and directors may be
    difficult.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All of our officers and directors are residents
of jurisdictions outside the United States. As a result, it may
be difficult for you to effect service of process within the
United States upon our officers and directors or to enforce
judgments obtained against our officers and directors or us in
United States courts.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Our revenue is affected by fluctuations in
    currency exchange rates.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Much of our expenditures and potential revenue
will be spent or derived outside of the United States. As a
result, fluctuations between the United States dollar and the
currencies of the countries in which we operate may increase our
costs or reduce our potential revenue. At present, we do not
engage in hedging transactions to protect against uncertainty in
future exchange rates between particular foreign currencies and
the U.S.&nbsp;dollar.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are authorized to issue a class of blank
    check preferred stock, which could adversely affect the holders
    of our common stock.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation allows us to
issue a class of blank check preferred stock with rights
potentially senior to those of our common stock without any
further vote or action by the holders of our common stock. The
issuance of preferred stock could decrease the amount of
earnings and assets available for distribution to the holders of
our common stock or could adversely affect the rights and
powers, including voting rights, of such holders. In certain
circumstances, such issuance could have the effect of decreasing
the market price of our shares, or making a change in control of
us more difficult.
</FONT>

<P align="left">
<B><FONT size="2">Risks Related to Our Relationship with
Novogen</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">As our majority stockholder, Novogen will
    have the ability to determine the outcome of all matters
    submitted to our stockholders for approval and Novogen&#146;s
    interests may conflict with our&#146;s or our other
    stockholders&#146; interests.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, Novogen will
beneficially own approximately 91% of our outstanding shares of
common stock assuming no additional warrants are exercised. As a
result, Novogen will have the ability to effectively determine
the outcome of all matters submitted to our stockholders for
approval, including the election and removal of directors and
any merger, consolidation or sale of all or substantially all of
our assets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen will have the ability to effectively
control our management and affairs. Novogen&#146;s interests may
not always be the same as that of our other stockholders. In
addition, this concentration of ownership may harm the market
price of our shares by:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">delaying, deferring or preventing a change in
    control;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">impeding a merger, consolidation, takeover or
    other business combination involving us;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">discouraging a potential acquirer from making a
    tender offer or otherwise attempting to obtain control of us; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">selling us to a third party.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">A majority of our directors are officers
    and/or directors of Novogen which may create a conflict of
    interest.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Four of our six existing board members, including
our Chairman, currently serve as board members of Novogen. Our
President and Chief Executive Officer, Christopher Naughton, is
the Managing Director of Novogen. Our Chief Financial Officer
and Secretary, David Ross Seaton, is the Chief Financial Officer
of Novogen. Simultaneous service as a Novogen director or
officer can create, or appear to create, a conflict of interest,
when such directors or officers are presented with decisions
that could have different implications for us and for Novogen.
</FONT>

<P align="center"><FONT size="2">11
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Novogen can compete with us.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have no contract, arrangement or understanding
with Novogen to preclude it from developing a product which may
be competitive with phenoxodiol or to use phenoxodiol for any
uses other than anti-cancer applications. Novogen has reserved
the intellectual property rights and know-how rights relating to
topical applications of phenoxodiol even in the field of cancer.
There can be no assurance that Novogen or its subsidiaries will
not pursue alternative technologies or product candidates either
on its own or in collaboration with others, as a means of
developing treatments for the conditions targeted by phenoxodiol
or any other product candidate which we seek to exploit.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are dependent on Novogen for our
    personnel.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have no employees. We rely on Novogen to
provide or procure the provision of staff and other financial
and administrative services under our services agreement with
Novogen. To successfully develop phenoxodiol, we will require
ongoing access to the personnel who have, to date, been
responsible for the development of phenoxodiol. The services
agreement does not specify a minimum amount of time that Novogen
employees must devote to our operations. If we are unable to
secure or if we lose the services of these personnel, the
ability to develop phenoxodiol could be materially impaired.
Moreover, if our business experiences substantial and rapid
growth, we may not be able to secure the services and resources
we require from Novogen or from other persons to support that
growth.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">We are largely dependent on Novogen for our
    supply of phenoxodiol and, should Novogen be unable to supply
    commercial quantities of phenoxodiol, it may be difficult to
    secure an alternative source.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">It is currently intended that phenoxodiol will be
supplied to us in its primary manufactured form by Novogen under
the manufacturing license and supply agreement. As the
manufacturing process for phenoxodiol has not been tested in the
quantities needed for commercial sales, we may be unable to
receive the necessary quantities in a timely manner. In
addition, in order for Novogen to supply commercial quantities
of phenoxodiol in due course, it will need to build a new
manufacturing plant. Significant additional capital will be
required to build the plant. Such capital may not be available
to Novogen.
</FONT>

<P align="left">
<B><FONT size="2">Risks Related to this Offering</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">An active trading market for shares of our
    common stock may not develop following their admission to The
    Nasdaq SmallCap Market.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to this offering, there has not been a
public trading market for our common stock in the United States.
An active, liquid trading market for our common stock may not
develop or be maintained following this offering. As a result,
you may not be able to sell your shares quickly or at the market
price. The initial public offering price of our common stock
units was determined by negotiation between us and the
underwriter based on a number of factors, including the historic
trading prices of our common stock on the Alternative Investment
Market of the London Stock Exchange, which may not be indicative
of prices that will prevail in the U.S. trading market. The
market price of our common stock on the Nasdaq SmallCap Market
may decline below the initial offering price, and you may not be
able to resell your shares of our common stock at or above the
initial offering price.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">There may not be a market for the warrants
    and you may have difficulty selling your warrants.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There is currently no public market for the
warrants that are being offered by this prospectus. We do not
intend to list the warrants on any national securities exchange,
automated quotation system or on the Alternative Investment
Market of the London Stock Exchange. No assurance can be given
that an active trading market will develop or as to the
liquidity or sustainability of any such market. Accordingly, you
may not be able to sell your warrants.
</FONT>

<P align="center"><FONT size="2">12
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">The trading price of the shares of our
    common stock could be highly volatile, your investment could
    decline in value, and we may incur significant costs from class
    action litigation.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The trading price of our common stock could be
highly volatile in response to various factors, many of which
are beyond our control, including:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">developments concerning phenoxodiol;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">announcements of technological innovations by us
    or our competitors;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">new products introduced or announced by us or our
    competitors;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in financial estimates by securities
    analysts;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">actual or anticipated variations in operating
    results;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">expiration or termination of licenses, research
    contracts or other collaboration agreements;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">conditions or trends in the regulatory climate
    and the biotechnology, pharmaceutical and genomics industries;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">changes in the market valuations of similar
    companies;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the liquidity of any market for our securities;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">trading prices of our common stock on the
    Alternative Investment Market of the London Stock Exchange; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">additional sales by us or Novogen of shares of
    our common stock.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, equity markets in general, and the
market for biotechnology and life sciences companies in
particular, have experienced substantial price and volume
fluctuations that have often been unrelated or disproportionate
to the operating performance of companies traded in those
markets. In addition, changes in economic conditions in the
United States, Europe or globally, could impact upon our ability
to grow profitably. Adverse economic changes are outside our
control and may result in material adverse impacts on our
business or our results of operations. These broad market and
industry factors may materially affect the market price of our
shares of common stock, regardless of our development and
operating performance. In the past, following periods of
volatility in the market price of a company&#146;s securities,
securities class-action litigation has often been instituted
against that company. Such litigation, if instituted against us
could cause us to incur substantial costs and divert
management&#146;s attention and resources.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">You will experience immediate and
    substantial dilution as a result of this offering and may
    experience additional dilution in the future.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you purchase common stock in this offering,
you will pay more for your shares than the amounts paid by
existing stockholders for their shares. As a result, you will
incur immediate and substantial dilution of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, representing the difference between our pro forma net
tangible book value per share after giving effect to this
offering and the initial public offering price. In addition,
purchasers of shares of our common stock in this offering will
have contributed
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the aggregate price paid by all purchasers of our stock, but
will own only
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the shares of our common stock outstanding after this
offering based on the number of shares of our common stock
outstanding as of June&nbsp;30, 2003. If the holders of the
currently outstanding warrants exercise those warrants at prices
below the initial public offering price, you will experience
further dilution. We may also acquire other companies or
technologies or finance strategic alliances by issuing equity,
which may result in additional dilution to our stockholders.
</FONT>

<P align="center"><FONT size="2">13
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">You will not be able to exercise the
    warrants offered hereby if we do not maintain the effectiveness
    of the registration statement and a current
    prospectus.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If we do not maintain an effective registration
statement and a current prospectus or comply with applicable
state securities laws, you may not be able to exercise the
warrants offered hereby. In order for you to be able to exercise
the warrants, the shares underlying the warrants must be covered
by an effective registration statement and a current prospectus
and be qualified for sale or exempt from qualification under the
applicable securities laws of the state in which you reside.
Although we cannot assure you that we will actually be able to
do so, we will use our best efforts to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">maintain an effective registration statement and
    a current prospectus covering the shares of our common stock
    underlying the warrants at all times when the market price of
    the common stock exceeds the exercise price of the warrants
    until the expiration of the warrants, and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">maintain the registration of such shares under
    the securities laws of the states in which we initially qualify
    the common stock units for sales in this offering.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">There can be no assurance that the trading
    price of our common stock will exceed the exercise price of the
    warrants being sold in this offering.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The warrants will entitle the holders to purchase
one share of our common stock at an exercise price equal to 120%
of the initial public offering price anytime after issuance
until the warrants expire on the third anniversary of their
issuance. There can be no assurance that the trading prices of
our common stock will exceed the exercise price of the warrants.
As a result, your warrants could expire and have no value.
</FONT>

<P align="center"><FONT size="2">14
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center">
<B><FONT size="2">SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This prospectus includes forward-looking
statements. All statements other than statements of historical
facts contained in this prospectus, including statements
regarding our future financial position, business strategy and
plans and objectives of management for future operations, are
forward-looking statements. The words &#147;believe,&#148;
&#147;may,&#148; &#147;will,&#148; &#147;estimate,&#148;
&#147;continue,&#148; &#147;anticipate,&#148;
&#147;intend,&#148; &#147;should,&#148; &#147;plan,&#148;
&#147;expect&#148; and similar expressions, as they relate to
us, are intended to identify forward-looking statements. We have
based these forward-looking statements largely on our current
expectations and projections about future events and financial
trends that we believe may affect our financial condition,
results of operations, business strategy and financial needs.
These forward-looking statements are subject to a number of
risks, uncertainties and assumptions described in &#147;Risk
Factors&#148; and elsewhere in this prospectus, including, among
other things:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">receipt of regulatory approvals;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">successful completion of clinical trials;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">continued cooperation and support of Novogen, our
    parent;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">future expenses and financing requirements; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">competition and competitive factors.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These risks are not exhaustive. Other sections of
this prospectus may include additional factors which could
adversely impact our business and financial performance.
Moreover, we operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is
not possible for us to predict all risk factors, nor can we
assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should not rely upon forward-looking
statements as predictions of future events. We cannot assure you
that the events and circumstances reflected in the
forward-looking statements will be achieved or occur. Although
we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
</FONT>

<P align="center"><FONT size="2">15
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "USE OF PROCEEDS" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center">
<B><FONT size="2">USE OF PROCEEDS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We expect to receive approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
in net proceeds from this offering
($&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the underwriter exercises its over-allotment option in full),
assuming an initial public offering price of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
common stock unit, the midpoint of the range set forth on the
cover page of this prospectus, after deducting underwriting
discounts and commissions and estimated offering expenses.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We intend to use the net proceeds from this
offering as follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">approximately $1.1&nbsp;million will be used to
    commence Phase&nbsp;II clinical trials studies of phenoxodiol as
    a monotherapy in early-stage prostate cancer, SCC of the cervix,
    vagina and vulva, and possibly other tumors such as breast
    cancer where diagnosis of early stage disease is available;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">approximately $4.2&nbsp;million will be used to
    commence Phase&nbsp;II clinical trials of phenoxodiol in
    combinational therapy with standard anti-cancer drugs for
    late-stage, chemo-resistant ovarian cancer, and possibly other
    tumors such as renal cancer; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the remainder for general corporate purposes,
    including potential payments to Novogen under the terms of the
    license agreement.
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">16
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "DETERMINATION OF OFFERING PRICE" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center">
<B><FONT size="2">DETERMINATION OF OFFERING PRICE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Prior to this offering, there has been no trading
market for our common stock in the United States. Our common
stock is listed on the Alternative Investment Market of the
London Stock Exchange (the AIM). The initial public offering
price will be determined by negotiation between us and the
underwriter based on a number of factors, including the historic
trading prices of our common stock on the AIM, that may not be
indicative of prices that will prevail in the trading market for
our common stock in the United States.
</FONT>

<!-- link1 "PRICE RANGE OF OUR COMMON STOCK" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center">
<B><FONT size="2">PRICE RANGE OF OUR COMMON STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our common stock has traded on the AIM since May
2002 under the symbol &#147;MSH&#148;. The following table sets
forth, for the periods indicated, the high and low closing sale
prices for our common stock as reported by the London Stock
Exchange. The trading price for our shares of common stock on
the AIM are quoted in sterling&nbsp;(&#163;), the lawful
currency of the United Kingdom.
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="81%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Quarter Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">June&nbsp;30, 2002.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.80</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">September&nbsp;30, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">December&nbsp;31, 2002.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">March&nbsp;31, 2003.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.46</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.25</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">June&nbsp;30, 2003.
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;3.55</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#163;2.30</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth, for the period
indicated, the high, low, average and period-end noon buying
rate for sterling, expressed in dollars per sterling in New York
City as certified for customs purposes by the Federal Reserve
Bank of New York.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="55%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Quarter Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">High</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Low</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period-End</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">June&nbsp;30, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5285</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.4310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.4615</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5245</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">September&nbsp;30, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5800</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5192</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5497</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5700</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">December&nbsp;31, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5418</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5714</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6095</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">March&nbsp;31, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6482</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5624</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6025</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5790</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">June&nbsp;30, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6840</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.5500</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6183</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1.6529</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003, the closing sales price of our common stock as reported by
the London Stock Exchange was &#163;&nbsp;&nbsp;per share, or
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share based on the noon buying rate for sterling of
&#163;1.00&nbsp;=&nbsp;$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003.
</FONT>

<!-- link1 "DIVIDEND POLICY" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center">
<B><FONT size="2">DIVIDEND POLICY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have never declared or paid any cash dividends
on our capital stock. We currently intend to retain future
earnings, if any, to finance the operation and expansion of our
business. Therefore, we do not anticipate paying any cash
dividends on our capital stock in the foreseeable future. In
addition, if we were to borrow against any credit facility that
we may enter into, we may be prohibited from paying cash
dividends.
</FONT>

<P align="center"><FONT size="2">17
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "CAPITALIZATION" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center">
<B><FONT size="2">CAPITALIZATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth our capitalization
as of June&nbsp;30, 2003:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">on an actual basis; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">as adjusted to reflect the effect of the sale of
    a total of 2,000,000 common stock units in this offering at an
    assumed initial public offering price of
    $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
    unit, the midpoint of the range set forth on the cover of the
    prospectus.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This table should be read in conjunction with
&#147;Management&#146;s Discussion and Analysis of Financial
Condition and Results of Operations&#148; and the consolidated
financial statements and the notes thereto included elsewhere in
this prospectus.
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">As of June 30, 2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Actual</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">As Adjusted</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(dollars in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">17,100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Short-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current portion of long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Long-term debt
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Bank borrowings
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Stockholders&#146; equity: preferred stock, $0.01
    par value, 100,000 shares authorized; no shares issued and
    outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock, $0.00000002 par value, 113,00,000
    shares authorized, 52,032,000 shares issued and outstanding
    actual and 54,032,000 shares issued and outstanding as adjusted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid-in-capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">18,914</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deficit accumulated during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total debt and stockholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">15,789</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This table excludes 2,514,000 shares of our
common stock issuable upon exercise of our outstanding warrants.
The outstanding warrants have an exercise price of $4.00 per
share and expire on November&nbsp;30, 2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This table also excludes 2,000,000&nbsp;shares of
our common stock that may be issued upon exercise of the
warrants that are included in the units being offered by this
prospectus.
</FONT>

<P align="center"><FONT size="2">18
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "DILUTION" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center">
<B><FONT size="2">DILUTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If you invest in our common stock units, your
interest will be diluted to the extent of the difference between
the initial public offering price per share of our common stock
units, attributing no value to the warrants that are included in
the common stock units, and the pro forma as adjusted net
tangible book value per share of our common stock immediately
after this offering. Pro forma net tangible book value per share
represents the amount of our total tangible assets less total
liabilities, divided by the pro forma number of shares of our
common stock outstanding. Investors participating in this
offering will incur immediate, substantial dilution.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our net tangible book value at June&nbsp;30,
2003, before adjustment for this offering, was approximately
$5,933,000, or approximately $0.11 per share. After giving
effect to the sale of 2,000,000 common stock units in this
offering, at an assumed initial public offering price of $5.50
per unit, the midpoint of the range set forth on the cover page
of this prospectus, and after deducting the estimated offering
expenses, our as adjusted net tangible book value at
June&nbsp;30, 2003 would have been $15,789,000 or $0.29 per
share. This represents an increase in net tangible book value of
$0.18 per share to our existing stockholders and an immediate
dilution (i.e., the difference between the public offering price
per unit, attributing no value to the warrants that are included
in the common stock units, and the net tangible book value per
share adjusted for this offering) at June&nbsp;30, 2003 of $5.21
per share to purchasers of the common stock units offered
hereby. The following table illustrates this per share dilution:
</FONT>

<CENTER>
<TABLE width="80%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Assumed initial public offering price per unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net tangible book value per share at
    June&nbsp;30, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Increase in net tangible book value per share
    attributable<BR>
    to the new investors
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,856</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">As adjusted net tangible book value per share
    after this offering
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.29</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dilution per share to new investors
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The above table excludes the possible exercise of
our 2,514,000&nbsp;outstanding warrants which have an exercise
price of $4.00&nbsp;per share and expire on November&nbsp;30,
2003.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Assuming the underwriter&#146;s over-allotment
option is exercised in full, the net tangible book value at
June&nbsp;30, 2003 would have been $17,324,000, or $0.32 per
share, the immediate increase in net tangible book value of
shares owned by existing stockholders would have been $0.21 per
share, and the immediate dilution to purchasers of the common
stock units in this offering would have been $5.29 per share.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes at June&nbsp;30,
2003, after giving effect to the sale of 2,000,000&nbsp;common
stock units at an assumed initial public offering price of $5.50
per unit, the midpoint of the range set forth on the cover page
of this prospectus, the number of shares of common stock
purchased from us, the total consideration paid to us for those
shares, attributing no value to the warrants that are included
in the common stock units, and the consideration given by the
existing stockholders and by the new investors assuming
approximately 54,032,000&nbsp;shares of our common stock are
outstanding:
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="39%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Shares Purchased</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Total Consideration</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Average</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Price</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Amount</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percent</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Per Share</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Existing stockholders
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,032</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">96</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">10,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">48</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">0.19</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">New investors
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">11,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5.50</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">54,032</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21,128</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">100</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">19
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center">
<B><FONT size="2">SELECTED HISTORICAL CONSOLIDATED FINANCIAL
DATA</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows selected historical
financial data for the years ended June&nbsp;30, 2003 and 2002.
This information has been derived from our audited consolidated
financial statements included in this prospectus.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The information below should be read in
conjunction with &#147;Management&#146;s Discussion and Analysis
of Financial Condition and Results of Operations,&#148;
&#147;Risk Factors&#148; and the consolidated financial
statements and the notes thereto included elsewhere in this
prospectus.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="49%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period from</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December 1, 2000</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">through June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(in thousands, except share and per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Statement of Operations Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest and other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss arising during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss per common share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.058</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.002</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average shares used to calculate loss
    per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,023,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,769,581</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock outstanding at year end
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,032,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,023,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(in thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Balance Sheet Data:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shareholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">20
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center">
<B><FONT size="2">MANAGEMENT&#146;S DISCUSSION AND ANALYSIS
OF</FONT></B>

<DIV align="center">
<B><FONT size="2">FINANCIAL CONDITION AND RESULTS OF
OPERATIONS</FONT></B>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following discussion and analysis should be
read in conjunction with our consolidated financial statements
and the notes thereto appearing elsewhere in this prospectus.
Our fiscal year ends June&nbsp;30. We commenced business
operations in May 2002, and as a result our financial results
for fiscal 2003 represent our first full year of operations.
</FONT>

<P align="left">
<B><FONT size="2">Results of Operations</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a development stage company that is
principally engaged in the clinical development of the
anti-cancer drug phenoxodiol, which Novogen has licensed to us.
Our main focus during fiscal 2003 was to undertake human
clinical testing of phenoxodiol. We do not employ any staff
directly but obtain services from Novogen under a services
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We recorded a consolidated loss of $3,033,000 and
$123,000 for the fiscal years ended June&nbsp;30, 2003 and 2002,
respectively. We have not generated any revenues from operations
since our inception. We have, however, received interest on our
cash assets of $145,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Consolidated operating expenses for fiscal 2003
were $3,178,000 versus $129,000 for fiscal 2002. Our major
operating expenses are the costs associated with conducting the
clinical trials of phenoxodiol, which were $1,089,000, and the
costs incurred under the license agreement and the services and
manufacturing agreements with Novogen including the cost of the
clinical trial drug supplies, which were $1,740,000. See
&#147;Certain Relationships and Related Transactions.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We intend to continue the clinical development of
phenoxodiol and to assess the opportunity to license other
cancer drugs developed by Novogen as the opportunities arise.
</FONT>

<P align="left">
<B><FONT size="2">Liquidity and Capital Resources</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At the end of fiscal 2003, we had cash resources
of $7,244,000. Funds are invested in short-term money market
accounts, pending use. The implementation of our business plan
is dependent on our ability to maintain adequate cash resources
to complete the clinical development program.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In May 2002, we raised $10,092,000 through a
private placement of 2,523,000 shares of common stock in
conjunction with the listing of our common stock on the
Alternative Investment Market of the London Stock Exchange.
Total proceeds of $9,022,000 were received, net of $1,070,000 of
transaction costs. The 2,523,000 shares of our common stock,
which represent 4.9% of our issued common stock, were issued at
$4.00 per share. Each share has an attached warrant exercisable
at any time prior to November&nbsp;30, 2003 with an exercise
price of $4.00&nbsp;per share. These funds were sufficient to
progress the clinical development program that Novogen had
commenced prior to licensing phenoxodiol to us and to commence
new clinical trials. At present, 9,000&nbsp;warrants have been
exercised.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Based on our current plans, we believe that with
the net proceeds of this offering, we will have sufficient funds
to complete the current Phase Ib/IIa and Phase&nbsp;II clinical
trial program, commence Phase&nbsp;II clinical trials of
phenoxodiol as a monotherapy in early stage cancer, and to
commence Phase&nbsp;II clinical trials of phenoxodiol in
combinational therapy with other anti-cancer drugs for late
stage chemo-resistant tumors. We believe we will have sufficient
cash resources to fund our operations at least through the end
of the fiscal year. Our ongoing operations through the conduct
of the clinical trial program will continue to consume cash
resources without generating revenues.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If the Phase&nbsp;III clinical program is
undertaken, we will require additional funds to complete the
program. We are not able to reasonably estimate at this time
either the amount required or when that amount will need to be
raised. This will to a large extent be influenced by the number
of patients enrolled in the trial, which can only be determined
accurately upon completion of Phase&nbsp;II trials. If the
Phase&nbsp;II
</FONT>

<P align="center"><FONT size="2">21
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">trials are successful, we will seek to raise the
funds required to complete Phase&nbsp;III trials or enter into a
collaborative arrangement with a major pharmaceutical company.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We must pay amounts to Novogen under our license
agreement with Novogen when certain milestones are met, as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">A lump sum license fee of $5,000,000 is payable
    to Novogen on the date when the cumulative total of all funds
    received from debt or equity issuances, revenue received from
    commercialization income, other than sales, and revenue from
    sales of phenoxodiol products exceeds $25,000,000.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">A lump sum license fee of $5,000,000 is payable
    to Novogen on the later of November&nbsp;1, 2003 or on the date
    when the cumulative total of all funds received from debt or
    equity issuances, revenue received from commercialization
    income, other than sales, and revenue from sales of phenoxodiol
    products exceeds $50,000,000.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cumulative total of funds received by us as
of the date of this prospectus is $10,128,000.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition, we must pay annual license fees to
Novogen under the license agreement for the calendar years ended
December&nbsp;31 as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Each calendar year thereafter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any amounts payable to Novogen under the above
annual payments will be reduced for amounts we pay under the
first lump sum license fee referred to above. For the fiscal
year ended June&nbsp;30, 2003, $500,000 has been included as
license fee expense in the consolidated statements of
operations. See &#147;Certain Relationships and Related
Transactions&#148; for more information about our license
agreement with Novogen.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not intend to incur any significant capital
expenditures in the foreseeable future.
</FONT>

<P align="left">
<B><FONT size="2">Critical Accounting Estimates</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of our consolidated financial
statements in conformity with accounting principles generally
accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in
the financial statements and the accompanying notes. Actual
results could differ from those estimates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Estimates have been used in determining our
expense liability under certain clinical trial contracts where
services have been performed but not yet invoiced. The actual
costs of those services could differ in amount and timing from
the estimates used in completing the financial results.
</FONT>

<P align="left">
<B><FONT size="2">Recent Accounting Announcements</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounting pronouncements issued by the Financial
Accounting Standards Board or other authoritative accounting
standards groups with future effective dates are either not
applicable or not significant to our consolidated financial
statements.
</FONT>

<P align="center"><FONT size="2">22
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Market Risk and Risk Management
Practices</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have established controls at the board level
designed to safeguard our interests and ensure integrity in the
reporting to stockholders. Our practices are in place to
minimize risks that arise through our activities. These include
practices that:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">ensure that any capital expenditure above a
    certain level is approved by the board;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">ensure that business risks are appropriately
    managed through an insurance and risk management program;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">ensure that safety, health, environmental
    standards and management&#146;s systems are monitored and
    reviewed to achieve high standards of compliance and
    performance; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">ensure implementation of board approved operating
    plans and budgets and board monitoring of progress against these
    budgets, including the establishment and monitoring of key
    performance indicators.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Impact of Inflation</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Although inflation has slowed in recent years it
is still a factor that may affect our financial performance. We
do not earn sales revenue and for the foreseeable future we will
not be able to increase the price of goods sold to offset
inflationary effects. Costs incurred in conducting clinical
trails are affected by inflation as are other inputs. There is a
risk that costs will increase over time due to inflation
increasing the cost to us.
</FONT>

<P align="center"><FONT size="2">23
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "BUSINESS" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center">
<B><FONT size="2">BUSINESS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are a developmental stage pharmaceutical
company involved in the development and commercialization of
drugs for the treatment of cancer. We are presently engaged in
the clinical development of a drug candidate called phenoxodiol,
which we believe may have broad application against a wide range
of cancers. Phenoxodiol appears to target a number of key
components involved in cancer cell survival and proliferation
based on the emerging field of signal transduction regulation,
with little or no effect on normal cells. We have attached as
Annex&nbsp;A, a glossary of technical and scientific terms that
we use in this prospectus.
</FONT>

<P align="left">
<B><FONT size="2">Scientific Overview</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Phenoxodiol belongs to a class of drugs that we
refer to as Multiple Signal Transduction Regulators (MSTRs).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Signal transduction refers to the means by which
cells respond to chemical signals that come from within the cell
itself, from neighboring cells, and from elsewhere in the body.
These signals regulate such vital functions as the growth and
survival of the cell. It is now thought that malfunctions in key
components of the signal transduction process are fundamental to
degenerative diseases such as cancer, where cells respond
abnormally to normal levels of signals, typically by
over-responding to them with increased cell growth and survival.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Identifying such malfunctions and then designing
drugs to block or correct them has become an important strategy
for the development of the next generation of anti-cancer drugs.
These drugs have become known as signal transduction inhibitors.
These drugs are the result of rational drug design, being
designed to target a specific signaling pathway which typically
is over-active in a tumor cell, and by blocking its progression,
so to prevent or reduce the ability of the tumor cell to divide
or to survive. Signal transduction inhibitors, while displaying
anti-tumor activity against a small number of different types of
cancer, generally have failed to provide more than modest
prolongation of survival of cancer patients. This is thought to
be because most human cancers involve errors of multiple
signaling pathways, and inhibition of a single pathway by any
one drug alone cannot reasonably be expected to provide more
than a temporary halt to cancer progression.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe phenoxodiol increases the potency of
signal transduction inhibitors by targeting multiple signaling
pathways, and in particular, those pathways vital to the
survival of most, if not all, human cancer cells. In the term
MSTR, &#147;multiple&#148; refers to the fact that more than one
signaling pathway is targeted by the drug, and
&#147;regulator&#148; refers to the fact that while the drug
predominantly inhibits errant signaling pathways, other
signaling pathways (e.g., anti-survival pathways) can be
activated.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Phenoxodiol targets a number of key components
involved in cancer cell survival and proliferation signal
transduction processes. Kinases (e.g., sphingosine kinase and
growth factor receptor-associated protein tyrosine kinases)
appear to be key targets of phenoxodiol, with inhibition of
these targets resulting in cancer cell cytotoxicity (death) and
cytostasis (blocking cell division).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This disrupting effect of phenoxodiol is
restricted to tumor cells, with non-tumor cells remaining
unaffected. A potential explanation for this selective
anti-tumor effect was provided by a recent discovery of a
research team at Purdue University. The research team discovered
that phenoxodiol targets a particular member of the ECTO-NOX
family of proteins. This family of proteins regulates
fundamental biological processes at the cell surface that are
vital to the survival and growth of all living matter. One of
these proteins, known as constitutive NADH oxidase
(CNOX)&nbsp;is a fundamental source of hydrogen ions for all
living cells. The Purdue University studies have now shown that
all forms of human cancer express a variant form of CNOX, known
as tNOX. The presence of tNOX disrupts the normal pattern of
behavior of the cell, contributing to the unregulated cell
growth and survival that characterizes tumor cells. This makes
tNOX the first pan-cancer expressed protein, identifying it as a
potentially important new target for anti-cancer drug
development. Phenoxodiol appears to specifically block the
action of tNOX, with the resulting inhibition of H+ influx into
the cell, leading to extensive disruption to signaling pathways
and to
</FONT>

<P align="center"><FONT size="2">24
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">eventual apoptosis. Phenoxodiol has no effect on
CNOX, providing an explanation of how phenoxodiol can be so
selective in its action, with its cytotoxic effects being
limited to cancer cells.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Laboratory studies at Yale University also have
revealed that the killing effect of phenoxodiol of cancer cells
occurs through the caspase enzyme pathway, and that key triggers
of this proteolytic pathway are the up-regulation of production
in the cancer cell of pro-apoptotic factors such as Bax and the
increased degradation of anti-apoptotic factors such as c-FLIP
and XIAP. The latter effect facilitates death of cancer cells
via either the Fas or TRAIL death receptor mechanisms. Some
aspects of this function were published recently in the Nature
journal, <I>Oncogene</I>.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Recent laboratory studies conducted by Novogen
and Yale University studies have revealed that phenoxodiol
interacts well with a number of standard anti-cancer drugs such
as cisplatin, gemcitabine and taxanes. In one aspect of this
effect, phenoxodiol appears to restore sensitivity to these
drugs in cells such as ovarian cells that have acquired
resistance to such drugs. In another aspect, pretreatment of
tumor cells with phenoxodiol considerably increases the
sensitivity of virgin tumor cells to the cytotoxic effects of
standard chemotoxic drugs. Both of these effects are achieved
without increasing the toxicity of the standard chemotoxic drugs
to non-tumor cells.
</FONT>

<P align="left">
<B><FONT size="2">Market Opportunity</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The American Cancer Society, or ACS, has reported
that, in the year 2003, approximately 1,344,100 new cancer cases
are expected to be diagnosed in the United States and that since
1990, approximately 17&nbsp;million new cancer cases have been
diagnosed. The ACS has also reported that 556,500 people in the
United States are expected to die from cancer this year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The primary focus in the development of
phenoxodiol is currently in connection with ovarian cancer,
squamous cell carcinoma, or SCC of the cervix, vagina, vulva and
skin, and prostate cancer. Subject to further successful
clinical research and development, we believe that phenoxodiol
may have potential uses in other forms of human cancers as well
as in combinational therapy with other anti-cancer drugs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cancers for which phenoxodiol is intended to
be used are relatively common and we believe, in general, are
poorly managed with current therapeutics.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ACS has estimated that in 2003 there will be
220,900 new cases of prostate cancer and 28,900 people will die
as result of this cancer in the United States. The treatment of
prostate cancer depends on age, stage of the cancer, and other
medical conditions of the patient. Current treatment options
include surgery, radiation, hormonal therapy or chemotherapy (or
a combination of these treatments) depending on the stage of the
disease. Survival rates also depend on the stage of the disease.
However, there is a low survival rate associated with advanced
disease.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The ACS has also estimated that in 2003 there
will be 25,400 new cases of ovarian cancer diagnosed and 14,300
will die as a result of this cancer in the United States.
Treatment options for ovarian cancer include surgery, radiation
therapy and chemotherapy. Treatment in advanced cases is
associated with low survival rates.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">SCC is a common type of cancer found in the skin
and mucous membranes of the body. Cancers of the cervix, vagina
and vulva are mostly of the SCC type and are recognized for
their poor response to standard chemotherapy. Surgery remains
the treatment of choice for these cancers and treatment in
advanced cases is associated with low survival rates. For
cancers of the cervix, vagina and vulva the ACS estimates that
in the year 2003, there will be 18,600 new cases diagnosed and
that there will be 5,700 deaths caused by these cancers in the
United States. Cutaneous SCC is a relatively common form of skin
cancer. It is most common in sun-exposed areas and if left
untreated can invade locally, requiring extensive surgery. The
ACS estimates that 2,200 deaths will occur in the United States
as a result of these cancers.
</FONT>

<P align="center"><FONT size="2">25
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">Overall Clinical Development
Strategy</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We believe that based on its mode of action,
phenoxodiol has the potential ultimately to become a treatment
option for a wide range of human cancers, and to be employed at
various stages of cancer development ranging from early stage
cancer through to late-stage cancer.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The immediate priority, is to focus on those
therapeutic indications that will expedite drug marketing
approval of phenoxodiol by regulatory bodies. To this end, we
will continue our work in late-stage chemo-resistant cancers
including completing our current intravenous monotherapy ovarian
cancer clinical trial currently underway at Yale University.
Pending the outcome of this trial we intend to expend our
intravenous program to include combinational therapy using
phenoxodiol in combination with standard chemotherapy drugs in
cancers which have become chemo-resistant. In chemo-resistant
cancers we hope to show that phenoxodiol will provide in humans
what it has demonstrated in the laboratory and in animal models,
that is, the restoration of chemo-sensitivity to standard
chemotoxic agents. In this way, phenoxodiol will be used to
&#147;condition&#148; the tumor cells to the more destructive
effects of drugs such as cisplatin, gemcitabine and taxanes,
with the combined effects of all drugs providing a potent force
able to attack well-established and extensive cancer disease. In
the next stage of our clinical development program for
phenoxodiol in the area of chemo-resistant cancers, it is
possible that other forms of cancer (such as renal carcinoma,
head and neck cancer), generally regarded as unresponsive to
standard drugs, will be added to this program in due course in
order to maximize the opportunity for treating chemo-resistant
cancers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A secondary priority is to develop phenoxodiol
for use in earlier-stage cancers. This is the basis of the
planned clinical program involving oral phenoxodiol in SCC of
the cervix, vagina, vulva including our planned adjuvant trial
at Yale University and skin, and prostate cancer. These are all
forms of cancer for which early diagnosis is commonly available,
and for which a non-invasive, non-surgical drug option might be
an attractive therapeutic option. In this strategy, phenoxodiol
is being studied in the first instance as an oral monotherapy in
the expectation that phenoxodiol alone will provide an adequate
anti-cancer effect.
</FONT>

<P align="left">
<B><FONT size="2">Specific Objectives</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our current objectives are to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">complete the Phase&nbsp;Ib/IIa and Phase&nbsp;II
    clinical programs for phenoxodiol as a monotherapy currently
    being undertaken;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">commence a Phase&nbsp;II study in patients with
    late-stage, chemoresistant ovarian cancer that will use
    phenoxodiol in combination with standard anti-cancer drugs.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">commence Phase&nbsp;II studies for phenoxodiol as
    a monotherapy, targeting early-stage cancer of the cervix,
    vagina and vulva, and prostate cancer;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We anticipate that with the proceeds of this
offering we will have sufficient funds for these activities. The
success and timing of the clinical trials could vary
significantly from current estimates. A delay in any one phase
of trials is likely to delay following phases. Our long-term
objectives will be to:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">commence Phase&nbsp;III clinical trials for
    phenoxodiol as both a monotherapy for early-stage cancers and
    for use in combinational therapy for later-stage cancers;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">seek to develop relationships with strategic
    partners for the development, marketing and distribution of
    phenoxodiol as a treatment for those cancer indications for
    which regulatory approval is obtained;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">potentially expand the uses of phenoxodiol to
    treat other cancers; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">pursue appropriate opportunities to develop and
    commercialize other anti-cancer compounds.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We will require additional funding in order to
undertake our long-term objectives.
</FONT>

<P align="center"><FONT size="2">26
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">History of Phenoxodiol Development</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In 1995, phenoxodiol was identified as a
potential putative metabolite of daidzein, or naturally
occurring isoflavore. To date, phenoxodiol has not appeared to
have been isolated or identified in mammals.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen scientists first synthesized phenoxodiol
in 1997 as part of a program of synthesis of compounds based on
an isoflavonoid ring chemical structure. When screened for
anti-cancer action against human cancer cells <I>in vitro</I>,
phenoxodiol was found to be cytostatic and cytotoxic against a
wide range of human cancer cells, but without toxicity against
non-tumor cells. <I>In vivo</I> studies in laboratory animals
subsequently showed that phenoxodiol administered either orally
or systemically was adequately bioavailable and significantly
retarded tumor development, in particular in athymic mice
bearing xenografts of human prostate cancer. Such anti-cancer
effects in animals were achieved without evidence of toxicity,
and thus phenoxodiol was selected for development as a human
anti-cancer drug.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subsequent pre-clinical studies identified a
range of molecular targets of phenoxodiol within human cancer
cells, prompting us to classify the drug as a Multiple Signal
Transduction Regulator.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The broad anti-cancer action of phenoxodiol
against an extensive library of different human cancer cell
lines (prostate, breast, ovarian, lung and cervical cancer,
mesothelioma, melanoma, glioma and rhabdomyosarcoma), suggested
potential clinical application against a wide range of types of
human cancer. Further pre-clinical studies showed that
phenoxodiol has a number of indirect anti-cancer effects (a
potent ability as an anti-androgen and an ability to induce
apoptosis of hyperplastic prostate smooth muscle cells) that
suggested prostate cancer as a particularly suitable clinical
target, leading to this form of cancer being identified early as
a prime potential clinical target for the drug. However, with a
view to allowing further time to identify the most sensitive
types of cancer to phenoxodiol, the strategy adopted was to
conduct Phase&nbsp;I studies in patients with a wide selection
of solid tumors in order to gain tentative evidence of efficacy
across a range of different tumor types.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Phase&nbsp;Ia pharmacokinetic studies conducted
in cancer patients in May 2000 showed that phenoxodiol behaved
similarly to steroidal hormones and was prone to conjugation
(glucuronide and sulfates) within the body. These conjugated
forms are the means by which a water-insoluble drug such as
phenoxodiol is transported within the body. Conversion of these
drugs to the active form requires deconjugation by relevant
enzymes within end tissues to yield the bioactive
(unconjugated)&nbsp;drug form. Bioequivalence studies showed
that phenoxodiol is considerably more prone to conjugation when
administered orally (greater than 99%) compared to intravenously
(approximately 85%). Therefore, in the absence of definitive
data on the rates of expression of deconjugating enzymes by
different tumor types, it was decided to commence clinical
studies with an intravenous dosage form of phenoxodiol because
of the certainty of obtaining levels of unconjugated phenoxodiol
in the plasma that were known in the laboratory to be highly
cytotoxic to cancer cells.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A Phase&nbsp;Ib toxicity study was commenced in
Australia in November 2000 and finished in March&nbsp;2002.
Twenty-one patients with late-stage solid cancers (any type)
were given phenoxodiol by weekly bolus injections for
12&nbsp;weeks. This was a dose-escalating study, with
inter-patient escalation from 1&nbsp;to 30&nbsp;mg/kg/dose. No
dose-limiting toxicity was reached and no significant toxicities
other than some hypersensitivities to the drug vehicle
(cyclodextrin) were encountered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A second Phase Ib toxicity study commenced in
Australia in April 2001 and concluded in 2002. Twenty-one
patients with late-stage solid cancers (any type) were given
phenoxodiol by continuous intravenous infusion. This was a
dose-escalating study, with inter-patient escalation from
1&nbsp;to 40&nbsp;mg/kg/day. No dose-limiting toxicity was
reached and no significant toxicities were encountered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The intravenous dosage form of phenoxodiol was
granted IND status by the FDA in January&nbsp;2001, allowing a
third Phase&nbsp;Ib toxicity study to commence at The Cleveland
Clinic, Ohio, in August&nbsp;2001. This study concluded in 2002.
Nineteen patients with late-stage solid cancers (any type) were
given phenoxodiol by continuous intravenous infusion. This was a
dose-escalating study, with inter-patient
</FONT>

<P align="center"><FONT size="2">27
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">escalation from 0.5&nbsp;to 64&nbsp;mg/kg/day. No
dose-limiting toxicity was reached and no significant toxicities
were encountered.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Concurrent with the Phase&nbsp;I clinical trial
program outlined above, pre-clinical studies continued with a
view to better understanding the molecular targets of
phenoxodiol and the most appropriate tumor types for therapy. In
terms of molecular targets, a number of important actions were
identified:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that phenoxodiol has broad inhibitory activity
    against kinase enzymes, resulting in disruption to a wide range
    of signaling pathways involved in cell survival and growth;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that phenoxodiol-induced apoptosis occurred via
    the caspase cascade;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that phenoxodiol-induced apoptosis was initiated
    as a result of activation of death receptor (Fas, TRAIL)
    mechanisms and down-regulation of death receptor blockers
    (c-FLIP, XIAP); and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">that a key molecular target is the receptor
    protein, tNOX, whose inhibition leads to extensive disruption of
    pro-survival mechanisms.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A further key pre-clinical finding was that
phenoxodiol was particularly effective against ovarian cancer,
melanoma and mesothelioma cell lines that were resistant to all
standard chemotoxic anti-cancer drugs, pointing to the
usefulness of phenoxodiol at least in patients with these
cancers who had failed all other forms of chemotherapy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The selection of specific tumor types in which to
test phenoxodiol in Phase&nbsp;II clinical trials was based on a
number of factors. First, the known relevance of certain actions
of phenoxodiol (e.g., the targeting of death receptor activity)
to the survival of certain cancer cell types; second,
pre-clinical experience with the use of phenoxodiol in animals
bearing human tumor xenografts; and third, observations of
clinical responses in patients treated with phenoxodiol. The
particular tumor types selected are ovarian cancer, prostate
cancer, and SCC of skin and mucosal surfaces. Renal cancer,
breast and pancreatic cancer also have been identified as
potential clinical targets, and may be studied in due course. A
feature of this entire group of cancers that underlies their
selection from a strategic point of view is their aggressiveness
and generally low sensitivity to standard chemotoxic drugs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A team of scientists at Yale University School of
Medicine commenced a Phase&nbsp;II study in October&nbsp;2002 of
the intravenous dosage form of phenoxodiol in 40 patients with
ovarian cancer. We expect that we will receive interim results
from this study by the end of this year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen decided to pursue the clinical
applications in prostate cancer and SCC using the oral dosage
form of the drug. This followed the trial use of the oral dosage
form in a number of patients who had completed the Phase&nbsp;I
trials of the intravenous dosage form of phenoxodiol. The oral
dosage form was found capable of prolonging survival in patients
with advanced disease despite the presence of phenoxodiol in the
blood in an almost completely conjugated form. It appears that
certain types of tumors may have the capacity to deconjugate
phenoxodiol conjugates to the active drug form. Clinical trials
on the oral dosage form of phenoxodiol began in Australia in
January&nbsp;2002. This dosage form currently is being evaluated
in Australian hospitals in Phase&nbsp;II clinical trials for the
treatment of prostate cancer and SCC.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The oral dosage form of phenoxodiol was granted
IND status by the FDA in June&nbsp;2003, which cleared the way
to commence a study in collaboration with Yale University School
of Medicine in patients with cancer of the cervix, vulva and
vagina. Phenoxodiol will be used on a monotherapy basis in
patients following a primary diagnosis of cancer. Phenoxodiol
will be administered daily for periods of up to 4&nbsp;weeks
prior to surgery or radiotherapy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A Phase&nbsp;Ib/IIa study began in early 2002 on
the use of phenoxodiol in patients with hematological tumors, in
an attempt to test the usefulness of phenoxodiol in non-solid
tumors. However, the apparent sensitivity of certain solid
tumors to phenoxodiol and the need to focus resources on those
clinical opportunities mean that an application in hematological
tumors is unlikely to be taken further.
</FONT>

<P align="center"><FONT size="2">28
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Phenoxodiol and Ovarian
    Cancer</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A team of scientists at Yale University School of
Medicine is currently conducting a Phase&nbsp;II clinical study.
The study is fully enrolled, using 40 patients with advanced,
metastatic ovarian cancer that has become unresponsive to at
least two&nbsp;standard chemotherapies (the average number of
different drug regimes used previously in these patients is
five&nbsp;per patient). Phenoxodiol is being administered as a
monotherapy by bolus intravenous injection on two consecutive
days per week in rising dosages (one, three, ten and
twenty&nbsp;mg/kg/24-hr) to four groups, each of ten women, over
treatment cycles of 12&nbsp;weeks. Tumor response is being
assessed on the basis of tumor mass, levels of the tumor marker
(CA125) in the blood, survival over 12&nbsp;months, and quality
of life.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This clinical trial is based on laboratory
studies at Yale University School of Medicine that showed
phenoxodiol to be the most effective drug at killing ovarian
cancer cells, including those that are resistant to all standard
anti-cancer drugs.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Following analysis of the data from the current
Phase&nbsp;II study, currently projected to be completed by
December&nbsp;2003, a decision will be made concerning the next
stage.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A recent pre-clinical study also extended these
findings by showing that phenoxodiol proved highly effective at
restoring ovarian cancer cells&#146; sensitivity to standard
anti-cancer drugs such as cisplatin. Cisplatin is a standard
drug used in the treatment of ovarian cancer, but patients&#146;
tumors commonly become resistant to this drug after some months.
A combination of phenoxodiol and cisplatin proved highly
effective in stopping human ovarian cancer growth in animals
with doses of phenoxodiol and cisplatin that alone were
ineffective. This raises the prospect of obtaining an enhanced
clinical response of phenoxodiol by combining it with standard
chemotherapies, and the opportunity to conduct a combinational
drug trial in ovarian cancer patients is under review currently.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Phenoxodiol and Prostate
    Cancer</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Two Australian hospitals are currently conducting
a study testing the effect of oral phenoxodiol therapy in
patients with late-stage prostate cancer that has become
unresponsive to hormonal therapy. Phenoxodiol is being
administered orally three times per day on a daily basis over
treatment cycles of 12&nbsp;weeks. There will be
24&nbsp;patients in this trial, with patients being allocated to
seven&nbsp;different dose levels (from 0.72&nbsp;to 9.0&nbsp;mg
per 24-hr). The study currently has 18 patients enrolled.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Phenoxodiol and Cutaneous SCC</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The potential for phenoxodiol in the treatment of
cutaneous SCC arose from the observation that in patients being
treated for other forms of cancer who coincidentally had
aggressive, malignant SCC of the skin, the SCC tumors showed
objective responses within several weeks. A Phase&nbsp;II trial
is being conducted at an Australian hospital in 30&nbsp;patients
with malignant SCC of the skin. Phenoxodiol is being
administered orally, three times daily for a period of three
months. We anticipate this study being completed by the third
quarter of 2004.
</FONT>

<P align="left">
<B><FONT size="2">Competition</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The clinical development and commercialization of
new anti-cancer drugs is highly competitive. As a developmental
stage pharmaceutical company, we compete with pharmaceutical and
biotechnology companies, academic and scientific institutions,
governmental agencies and public and private research
organizations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many pharmaceutical and biotechnology companies
have products or drug candidates in various stages of
pre-clinical or clinical development to treat prostate cancer,
ovarian cancer, SCC and other cancers. Some of these potentially
competitive drugs are further advanced in development and may
receive FDA or other regulatory approval and may be
commercialized earlier than phenoxodiol. Some of these drugs may
be directly competitive with phenoxodiol to the extent that they
would obviate the need for phenoxodiol.
</FONT>

<P align="center"><FONT size="2">29
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">In other cases, however, these drugs or therapies
may not be competitive to the extent that they are not mutually
exclusive and could be used in conjunction with phenoxodiol.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many pharmaceutical and biotechnology companies
are developing drugs specifically in the area of signal
transduction inhibition. Several such drugs have received
marketing approval over the past five&nbsp;years. While much of
the activity in this field is based on rational drug design,
meaning that the nature of action of such drugs is
overwhelmingly focused on individual signaling targets, it would
be reasonable to expect that attention will be drawn
increasingly to the development of drugs like phenoxodiol that
have activity against multiple targets.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The most significant competition potentially
might arise from the development of drugs with a related
chemical heritage to phenoxodiol. Two chemicals with a related
chemical heritage of an underlying flavonoid chemical structure
that we are aware of undergoing clinical development as
anti-cancer agents are genistein and flavopiridol<SUP>TM</SUP>.
Our understanding is that genistein is in Phase&nbsp;II clinical
studies, while flavopiridol<SUP>TM</SUP> is in Phase&nbsp;III
clinical studies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our competitors may develop and commercialize
products that are safer, less costly and more efficacious in the
treatment of cancers. In addition, we face and will continue to
face competition from companies, institutions, agencies and
organizations, including those in fields unrelated to drug
development, to recruit qualified personnel, attract partners
for joint ventures and license competitive technologies.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Many of our competitors have significantly
greater capital resources, larger research and development
staffs and facilities and greater experience in drug
development, regulation, manufacturing and marketing than we do
at present. In this respect, they may be able to more easily
develop technologies and products that would render our
technologies or our drug candidates obsolete or non-competitive.
</FONT>

<P align="left">
<B><FONT size="2">Intellectual Property</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen has been granted patents and has
additional patents pending in a number of countries which cover
a family of chemically related compounds with potentially broad
ranging and complementary anti-cancer effects. Novogen has
granted to us an exclusive license with respect to its patent
rights and intellectual property know-how to develop, market and
distribute one of these compounds, phenoxodiol as an anti-cancer
agent, except in topical form.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">See &#147;Certain Relationships and Related
Transactions&#148; for more information regarding our agreements
with Novogen.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have licensed from Novogen the rights to the
Novogen patents and applications as they relate to phenoxodiol
as an anti-cancer agent. Excluded from these rights is
phenoxodiol in a topical formulation. The patent rights we have
licensed from Novogen can be largely classified into two broad
groups: patent rights relating to phenoxodiol used as an
anti-cancer agent, which we refer to as &#147;product patent
rights&#148;, and patent rights relating to the manufacture of
phenoxodiol for anti-cancer purposes, which we refer to as
&#147;manufacturing patent rights&#148;. The pending and issued
Novogen patent rights can be further broken down into four
families, three families belonging to the product patent rights
and one family belonging to the manufacturing patent rights: The
three families in the product patent rights comprise phenoxodiol
for the treatment of cancer&nbsp;(17 pending; six issued);
compositions and methods for protecting skin from ultraviolet
induced immunosuppression and skin damage including phenoxodiol
(10&nbsp;pending; three&nbsp;issued); therapeutic methods and
compositions involving isoflav-3-ene and isoflavan structure
including phenoxodiol (PCT pending). The family relating to the
manufacturing patent rights relate to the production of
isoflavone derivatives including phenoxodiol (17&nbsp;pending).
Novogen has recently received a notice of allowance from the
United States Patent and Trademark Office (USPTO) related to
phenoxodiol to treat a variety of cancers.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As patent applications in the United States are
maintained in secrecy until published or patents issue and as
publication of discoveries in the scientific or patent
literature often lag behind the actual discoveries, we cannot be
certain that Novogen was the first to make the inventions
covered by each Moreover, pursuant to the terms of the Uruguay
Round Agreements Act, patents filed on or after June&nbsp;8,
</FONT>

<P align="center"><FONT size="2">30
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">1995 have a term of twenty years from the date of
such filing, irrespective of the period of time it may take for
such patent to ultimately issue. This may shorten the period of
patent protection afforded to phenoxodiol as patent applications
in the biopharmaceutical sector often take considerable time to
issue. Under the Drug Price Competition and Patent Term
Restoration Act of 1984 (the &#147;Patent Act&#148;), a sponsor
may obtain marketing exclusivity for a period of time following
FDA approval of certain drug applications, regardless of patent
status, if the drug is a new chemical entity or if new clinical
studies were used to support the marketing application for the
drug. Pursuant to the FDA Modernization Act of 1997, the period
of exclusivity can be extended if the applicant performs certain
studies in pediatric patients. This marketing exclusivity
prevents a third party from obtaining FDA approval for an
identical or nearly identical drug under an Abbreviated New Drug
Application (&#147;ANDA&#148;) or a &#147;505(b)(2)&#148; New
Drug Application. The statute also allows a patent owner to
obtain an extension of applicable patent terms for a period
equal to one-half the period of time elapsed between the filing
of an IND and the filing of the corresponding NDA plus the
period of time between the filing of the NDA and FDA approval,
with a five year maximum patent extension. We cannot be certain
that Novogen will be able to take advantage of either the patent
term extension or marketing exclusivity provisions of this law.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to protect the confidentiality of our
technology, including trade secrets and know-how and other
proprietary technical and business information, we require all
of our consultants, advisors and collaborators to enter into
confidentiality agreements that prohibit the use or disclosure
of information that is deemed confidential. The agreements also
oblige our consultants, advisors and collaborators to assign to
us developments, discoveries and inventions made by such persons
in connection with their work with us. We cannot be sure that
confidentiality will be maintained or disclosure prevented by
these agreements or that our proprietary information or
intellectual property will be protected thereby or that others
will not independently develop substantially equivalent
proprietary information or intellectual property.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The pharmaceutical industry is highly competitive
and patents have been applied for by, and issued to, other
parties relating to products competitive with phenoxodiol.
Therefore, phenoxodiol and any other drug candidates may give
rise to claims that they infringe the patents or proprietary
rights of other parties existing now and in the future. An
adverse claim could subject us to significant liabilities to
such other parties and/or require disputed rights to be licensed
from such other parties. We cannot be sure that any license
required under any such patents or proprietary rights would be
made available on terms acceptable to us, if at all. If we do
not obtain such licenses, we may encounter delays in product
market introductions, or may find that the development,
manufacture or sale of products requiring such licenses may be
precluded. We have not conducted any searches or made any
independent investigations of the existence of any patents or
proprietary rights of other parties.
</FONT>

<P align="left">
<B><FONT size="2">Relationship with Novogen</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen has been granted patents and has
additional patent applications pending in a number of countries
pertaining to phenoxodiol&#146;s family of compounds and to
phenoxodiol itself and their use in anti-cancer therapeutics.
Novogen has granted us an exclusive license under its patent
rights and the intellectual property rights in its relevant
know-how to develop, market and distribute all forms of
administering phenoxodiol for anti-cancer applications, except
topical applications.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen is active in the discovery and
development of new drugs based on the emerging field of signal
transduction regulation. Signal transduction regulators offer
the potential for effective, well-tolerated treatment of common
degenerative diseases including cancer and heart disease.
Novogen has developed a family of chemically related compounds
with potentially broad ranging and complementary anti-cancer
effects.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have entered into certain key agreements with
Novogen. These agreements are discussed briefly below. Investors
should also read the detailed summary of these documents set out
in &#147;Certain Relationships and Related Transactions.&#148;
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under an amended and restated license agreement,
Novogen granted us an exclusive world-wide, non-transferable
license, under the Novogen patent rights, to conduct clinical
trials and commercialize and
</FONT>

<P align="center"><FONT size="2">31
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">distribute all forms of administering phenoxodiol
except topical applications. The agreement covers uses of
phenoxodiol in the field of prevention, treatment or cure of
cancer in humans.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under an amended and restated manufacturing
license and supply agreement, Novogen assumes responsibility for
the supply of phenoxodiol in its primary manufactured form for
both the research and development program and phenoxodiol&#146;s
ultimate commercial use. Novogen has a pilot phenoxodiol
manufacturing plant which we believe has sufficient capacity to
meet the projected amount of phenoxodiol required to complete
the proposed clinical program.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under an amended and restated license option
deed, Novogen granted us an exclusive first right to accept and
an exclusive last right to match any proposed dealing by Novogen
with its intellectual property rights in other synthetic
compounds developed by Novogen that have known or potential
anti-cancer applications in all forms other than topical
applications.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to an amended and restated services
agreement, Novogen will provide services reasonably required by
us relating to the development and commercialization of
phenoxodiol. We do not currently intend to directly employ any
staff and are reliant on Novogen for the provision of resources
to conduct our business.
</FONT>

<P align="left">
<B><FONT size="2">Commercialization</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Commercialization of a drug requires approval
from the regulatory body of each country in which the drug is to
be marketed. Following the completion of Phase III studies, the
data gathered from the clinical trial program must be collated
for presentation to the appropriate regulatory authorities in
each territory in a form acceptable to each authority, in order
to obtain the relevant regulatory approvals to market the drug
in that territory. Approval usually is granted for those
specific cancer indications for which the clinical data supports
efficacy.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may choose to seek regulatory approval in our
own right in any or all territories. Alternatively, we may seek
to establish a strategic partnership with another pharmaceutical
company to market phenoxodiol in certain territories, in which
case that partner may take responsibility for application for
regulatory approval.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Successful commercialization requires high
quality marketing campaigns and distribution arrangements in
order to gain market share as fast as possible. Global
pharmaceutical companies have large and professional marketing
and distribution functions that regularly introduce new drugs
throughout the world. For that reason, we are likely to choose
to seek a strategic partnership in any or all territories in
which phenoxodiol is to be marketed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Decisions on both the appropriate territories in
which regulatory approval will be sought and the nature of
commercialization in those territories will be made by the board
of directors at the appropriate time and with due regard to
maximizing the commercial benefit to us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The most significant market for phenoxodiol is
the United States market. Before a drug is granted regulatory
approval to be marketed and commercialized in the United States,
the drug must gain approval to be tested in humans. In the
United States, this requires the FDA to grant the drug IND
status. See &#147;&#151;&nbsp;Regulation-U.S. Regulatory
Requirements.&#148; Phenoxodiol has achieved this status and has
commenced clinical trials in the United States.
</FONT>

<P align="left">
<B><FONT size="2">Research and Development</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The objective of our research and development
program is the generation of data sufficient to achieve
regulatory approval of phenoxodiol in one or more dosage forms
in major markets such as the United States, and/or to allow us
to enter into a commercial relationship with another party. The
data is generated by our clinical trial programs.
</FONT>

<P align="center"><FONT size="2">32
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The key aspects of this program are to provide
more complete characterization of the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the relevant molecular targets of action of
    phenoxodiol;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the relative therapeutic indications of different
    dosage forms of phenoxodiol;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the relative therapeutic benefits and indications
    of phenoxodiol as a monotherapy or as part of combinational
    therapy with other chemotoxics; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the most appropriate cancer targets for
    phenoxodiol.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<B><FONT size="2">Regulation</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">U.S. Regulatory Requirements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The U.S. Food and Drug Administration, or FDA,
and comparable regulatory agencies in foreign countries regulate
and impose substantial requirements upon the research,
development, preclinical and clinical testing, labeling,
manufacture, quality control, storage, approval, advertising,
promotion, marketing, distribution, and export of pharmaceutical
products, including biologics, as well as significant reporting
and record-keeping obligations. State governments may also
impose obligations in these areas.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In the United States, pharmaceutical products are
regulated by the FDA under the Federal Food, Drug, and Cosmetic
Act, or FDCA, and other laws, including in the case of
biologics, the Public Health Service Act. We believe, but cannot
be certain, that our products will be regulated as biologics and
drugs by the FDA. The process required by the FDA before
biologics or drugs may be marketed in the United States
generally involves the following:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">preclinical laboratory evaluations, including
    formulation and stability testing, and animal tests performed
    under the FDA&#146;s Good Laboratory Practices regulations to
    assess potential safety and effectiveness;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">submission and approval of an IND, including
    results of preclinical tests and protocols for clinical tests,
    which must become effective before clinical trials may begin in
    the United States;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">obtaining approval of Institutional Review Boards
    to administer the products to human subjects in clinical trials;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">adequate and well-controlled human clinical
    trials to establish the safety and efficacy of the product for
    the product&#146;s intended use;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">development of manufacturing processes which
    conform to FDA current Good Manufacturing Practices, or cGMPs,
    as confirmed by FDA inspection;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">submission of preclinical and clinical test
    results, and chemistry, manufacture and control information on
    the product to the FDA in a New Drug Approval Application, or
    NDA; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">FDA review and approval of an NDA, prior to any
    commercial sale or shipment of a product.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The testing and approval process requires
substantial time, effort, and financial resources, and we cannot
be certain that any approval will be granted on a timely basis,
if at all.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The results of the preclinical tests, together
with initial specified manufacturing information, the proposed
clinical trial protocol, and information about the participating
investigators, are submitted to the FDA as part of an IND, which
must be approved before we may begin human clinical trials.
Additionally, an independent Institutional Review Board at each
clinical trial site proposing to conduct the clinical trials
must review and approve each study protocol and oversee conduct
of the trial. An IND becomes effective 30&nbsp;days after
receipt by the FDA, unless the FDA, within the 30-day period,
raises concerns or questions about the conduct of the trials as
outlined in the IND and imposes a clinical hold. If the FDA
imposes a clinical hold, the IND sponsor must resolve the
FDA&#146;s concerns before clinical trials can begin.
Pre-clinical tests and studies can take several years to
complete, and there is no guarantee that an IND we submit based
on such tests and studies will become effective within any
specific time period, if at all.
</FONT>

<P align="center"><FONT size="2">33
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Human clinical trials are typically conducted in
three sequential phases that may overlap:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Phase&nbsp;I:</FONT></I><FONT size="2"> The
    drug is initially introduced into healthy human subjects or
    patients and tested for safety and dosage tolerance. Absorption,
    metabolism, distribution, and excretion testing is generally
    performed at this stage.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Phase&nbsp;II:</FONT></I><FONT size="2"> The
    drug is studied in controlled, exploratory therapeutic trials in
    a limited number of subjects with the disease or medical
    condition for which the new drug is intended to be used in order
    to identify possible adverse effects and safety risks, to
    determine the preliminary or potential efficacy of the product
    for specific targeted diseases or medical conditions, and to
    determine dosage tolerance and the optimal effective dose.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Phase&nbsp;III:</FONT></I><FONT size="2"> When
    Phase&nbsp;II studies demonstrate that a specific dosage range
    of the drug is likely to be effective and the drug has an
    acceptable safety profile, controlled, large-scale therapeutic
    Phase&nbsp;III trials are undertaken at multiple study sites to
    demonstrate clinical efficacy and to further test for safety in
    an expanded patient population.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We cannot be certain in that we will successfully
complete Phase&nbsp;I, Phase&nbsp;II, or Phase&nbsp;III testing
of our products within any specific time period, if at all.
Furthermore, the FDA, the Institutional Review Board or we may
suspend or terminate clinical trials at any time on various
grounds, including a finding that the subjects or patients are
being exposed to an unacceptable health risk.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Results of pre-clinical studies and trials, as
well as detailed information about the manufacturing process,
quality control methods, and product composition, among other
things, are submitted to the FDA as part of an NDA seeking
approval to market and commercially distribute the product on
the basis of a determination that the product is safe and
effective for its intended use. NDAs are used for products that
are regulated as drugs, such as synthetic chemicals. Before
approving an NDA, the FDA will inspect the facilities at which
the product is manufactured and will not approve the product
unless cGMP compliance is satisfactory. If applicable regulatory
criteria are not satisfied, the FDA may deny the NDA or require
additional testing or information. As a condition of approval,
the FDA also may require post-marketing testing or surveillance
to monitor the product&#146;s safety or efficacy. Even after an
NDA is approved, the FDA may impose additional obligations or
restrictions (such as labeling changes), or even suspend or
withdraw a product approval on the basis of data that arise
after the product reaches the market, or if compliance with
regulatory standards is not maintained. We cannot be certain
that any NDA we submit will be approved by the FDA on a timely
basis, if at all. Also, any such approval may limit the
indicated uses for which the product may be marketed. Any
refusal to approve, delay in approval, suspension or withdrawal
of approval, or restrictions on indicated uses could have a
material adverse impact on our business prospects.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each NDA must be accompanied by a user fee,
pursuant to the requirements of the Prescription Drug User Fee
Act, or PDUFA, and its amendments. According to the FDA&#146;s
fee schedule, effective on October&nbsp;1, 2003 for the fiscal
year 2004, the user fee for an application requiring clinical
data, such as an NDA, is $573,500. The FDA adjusts the PDUFA
user fees on an annual basis. PDUFA also imposes an annual
product fee for prescription drugs and biologics ($36,080 for
the fiscal year 2004), and an annual establishment fee
($226,800) on facilities used to manufacture prescription drugs
and biologics. We are not at the stage of development with our
products where we are subject to these fees, but they are
significant expenditures that will be incurred in the future and
must be paid at the time of application submission to the FDA.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Satisfaction of FDA requirements typically takes
several years. The actual time required varies substantially,
based upon the type, complexity, and novelty of the
pharmaceutical product, among other things. Government
regulation imposes costly and time-consuming requirements and
restrictions throughout the product life cycle and may delay
product marketing for a considerable period of time, limit
product marketing, or prevent marketing altogether. Success in
pre-clinical or early stage clinical trials does not assure
success in later stage clinical trials. Data obtained from
preclinical and clinical activities is not always conclusive and
may be susceptible to varying interpretations that could delay,
limit, or prevent
</FONT>

<P align="center"><FONT size="2">34
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">marketing approval. Even if a product receives
marketing approval, the approval is limited to specific clinical
indications. Further, even after marketing approval is obtained,
the discovery of previously unknown problems with a product may
result in restrictions on the product or even complete
withdrawal of the product from the market.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">After product approval, there are continuing
significant regulatory requirements imposed by the FDA,
including record-keeping requirements, obligations to report
adverse experiences, and restrictions on advertising and
promotional activities. Quality control and manufacturing
procedures must continue to conform to cGMPs, and the FDA
periodically inspects facilities to assess cGMP compliance.
Additionally, post-approval changes in product indications,
manufacturing processes or facilities, product labeling, or
other areas may require submission of an NDA Supplement to the
FDA for review and approval. Failure to comply with FDA
regulatory requirements may result in an enforcement action by
the FDA, including Warning Letters, product recalls, suspension
or revocation of product approval, seizure of product to prevent
distribution, impositions of injunctions prohibiting product
manufacture or distribution, and civil and criminal penalties.
Maintaining compliance is costly and time-consuming.
Nonetheless, we cannot be certain that we, or our present or
future suppliers or third-party manufacturers, will be able to
comply with all FDA regulatory requirements, and potential
consequences of noncompliance could have a material adverse
impact on our business prospects.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The FDA&#146;s policies may change, and
additional governmental regulations may be enacted that could
delay, limit, or prevent regulatory approval of our products or
affect our ability to manufacture, market, or distribute our
products after approval. Moreover, increased attention to the
containment of healthcare costs in the United States and in
foreign markets could result in new government regulations that
could have a material adverse effect on our business. Our
failure to obtain coverage, an adequate level of reimbursement,
or acceptable prices for our future products could diminish any
revenues we may be able to generate. Our ability to
commercialize future products will depend in part on the extent
to which coverage and reimbursement for the products will be
available from government and health administration authorities,
private health insurers, and other third-party payors. European
Union and U.S. government and other third-party payors
increasingly are attempting to contain healthcare costs by
consideration of new laws and regulations limiting both coverage
and the level of reimbursement for new drugs. We cannot predict
the likelihood, nature or extent of adverse governmental
regulation that might arise from future legislative or
administrative action, either in the United States or abroad.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our activities also may be subject to state laws
and regulations that affect our ability to develop and sell our
products. We are also subject to numerous federal, state, and
local laws relating to such matters as safe working conditions,
clinical, laboratory, and manufacturing practices, environmental
protection, fire hazard control, and disposal of hazardous or
potentially hazardous substances. We may incur significant costs
to comply with such laws and regulations now or in the future,
and the failure to comply may have a material adverse impact on
our business prospects.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Australian Regulatory
    Requirements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The <I>Therapeutic Goods Act 1989</I>, or 1989
Act, sets out the legal requirements for the import, export,
manufacture and supply of pharmaceutical products in Australia.
The 1989 Act requires that all pharmaceutical products to be
imported into, supplied in, or exported from Australia be
included in the Australian Register of Therapeutic Goods, or
ARTG, unless specifically exempted under the Act.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In order to ensure that a product can be included
in the ARTG, a sponsoring company must make an application to
the Therapeutic Goods Administration, or TGA. The application
usually consists of a form accompanied by data (based on the
European Union requirements) to support the quality, safety and
efficacy of the drug. In the case of drugs for important medical
conditions the TGA will accept either European or American
dossier format in an attempt to expedite the registration
process.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The first phase of evaluation, known as the
Application Entry Process, is usually a short period during
which an application is assessed on an administrative level to
ensure that it complies with the basic
</FONT>

<P align="center"><FONT size="2">35
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">guidelines. The TGA must decide within
40&nbsp;working days whether it will accept the application for
evaluation.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Once an application is accepted for evaluation,
aspects of the data provided are allocated to evaluators, who
prepare evaluation reports. Following this evaluation, the
chemistry and quality control aspects of a product may be
referred to a sub-committee of the Australian Drug and
Evaluation Committee, or ADEC to review the evaluation reports.
The evaluation reports are then sent to the sponsoring company
who then has the opportunity to comment on the views expressed
within the evaluation report and to submit supplementary data to
address any issues raised in the evaluation reports.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Once the evaluations are complete, the TGA
prepares a summary document on the key issues on which advice
will be sought from the ADEC. This summary is sent to the
sponsoring company which is able to submit a response to the
ADEC dealing with issues raised in the summary and those not
previously addressed in the evaluation report. The ADEC provides
advice on the quality, risk-benefit, effectiveness and access of
the drug and conduct medical and scientific evaluations of the
application. The ADEC&#146;s resolutions are provided to the
sponsoring company after 5 working days.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The TGA takes into account the advice of the ADEC
in reaching a decision to approve or reject a product. Any
approval for registration on the ARTG may have conditions
associated with it.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">From the time that the TGA accepts the initial
application for evaluation, the TGA must complete the evaluation
and make a decision on the registration of the product within
255 working days. The TGA also has a system of priority
evaluation for products that meet certain criteria, including
where the product is a new chemical entity that it is not
otherwise available on the market as an approved product, and is
for the treatment of a serious, life-threatening illness for
which other therapies are either ineffective or not available.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">European Union Regulatory
    Requirements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Outside the United States, our ability to market
our products will also be contingent upon receiving marketing
authorizations from the appropriate regulatory authorities and
compliance with applicable post-approval regulatory
requirements. Although the specific requirements and
restrictions vary from country to country, as a general matter,
foreign regulatory systems include risks similar to those
associated with FDA regulation, described above. Under EU
regulatory systems, marketing authorizations may be submitted
either under a centralized or decentralized procedure. Under the
centralized procedure, a single application to the European
Medicines Evaluation Agency (EMEA)&nbsp;lead to an approval
granted by the European Commission which permits the marketing
of the product throughout the EU. We assume that the centralized
procedure will apply to our products that are developed by means
of a biotechnology process. The decentralized procedure provides
for mutual recognition of nationally approved decisions and is
used for products that do not qualify under the centralized
procedure. Under the decentralized procedure, the holders of a
national marketing authorization may submit further applications
to the competent authorities of the remaining members states
which will then be requested to recognize the original
authorization based upon an assessment report prepared by the
original authorizing competent authority. The recognition
process should take no longer than 90&nbsp;days, but if one
member state makes an objection, which under the legislation can
only be based on a possible risk to human health, we have the
option to withdraw the application from that country or take the
application to arbitration by the Committee for Proprietary
Medicinal Products (CPMP)&nbsp;of the EMEA. If a referral for
arbitration is made, the procedure is suspended, and in the
intervening time, the only EU country in which the product can
be marketed will be the country where the original authorization
has been granted, even if all the other designated countries are
ready to recognize the product. The opinion of the CPMP, which
is binding, could support or reject the objection or
alternatively could reach a compromise position acceptable to
all EU countries concerned. Arbitration can be avoided if the
application is withdrawn in the objecting country, but once the
application has been referred to arbitration, it cannot be
withdrawn. The arbitration procedure may take an additional year
before a final decision is reached and may require the delivery
of additional data.
</FONT>

<P align="center"><FONT size="2">36
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As with FDA approval, we may not be able to
secure regulatory approvals in Europe in a timely manner, if at
all. Additionally, as in the United States, post-approval
regulatory requirements, such as those regarding product
manufacture, marketing, or distribution, would apply to any
product that is approved in Europe, and failure to comply with
such obligations could have a material adverse effect on our
ability to successfully commercialize any product.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There has recently been introduced in Europe new
legislation designed to harmonise the regulation of clinical
trials across the EU and that legislation is currently being
implemented on a country by country basis. In addition, new
proposals are under advanced consideration which, if brought
into law, will effect substantial and material changes to the
regulation of medicinal products in Europe. Accordingly, there
is a marked degree of change and uncertainty both in the
regulation of clinical trials and in respect of marketing
authorisations which face us in seeking for our products in
Europe.
</FONT>

<P align="left">
<B><FONT size="2">Government Funding</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen received financial support for the
phenoxodiol drug program from the Australian government under
what is known as the START Program. The START Program is a
merit-based program designed to encourage and assist Australian
companies to undertake research and development and
commercialization through a range of grants and loans. The START
Program is administered by the Industry Research and
Development, or IR&#38;D Board. The IR&#38;D Board is made up of
private sector and academic members with expertise and
experience in research and development and commercialization. In
1998, the Australian government agreed to provide
A$2.7&nbsp;million (approximately U.S. $1.8&nbsp;million)
enabling Novogen to expedite phenoxodiol into clinical trials,
provided that the grant money was matched by an equal
expenditure by Novogen. The START grant was awarded after the
government&#146;s review of the pertinent research results, the
intellectual property driving the program, and the likelihood
and potential for commercial success of the drug.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The terms of the grant require Novogen to obtain
the consent of the Australian government to deal with the
intellectual property rights which have arisen through the
program conducted to date. Novogen has obtained the consent of
the Australian government to the grant of the license to us and
to the other arrangements between us and Novogen concerning the
development and commercialization of phenoxodiol.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen believes that it has fulfilled all of its
obligations under the terms of the START Program and expects to
continue to do so in the future. For additional information on
the consequences to us in the event Novogen fails to comply with
its obligations under the START Program, see the
&#147;Intellectual Property&#148; and &#147;Risk Factors&#148;
sections of this prospectus.
</FONT>

<P align="left">
<B><FONT size="2">Employees</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not have any employees. Novogen provides us
with staff and other financial and administrative services under
our service agreement with Novogen.
</FONT>

<P align="left">
<B><FONT size="2">Facilities</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not own or lease any facility. Novogen
provides us with space for our corporate headquarters.
</FONT>

<P align="left">
<B><FONT size="2">Legal proceedings</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are not currently a party to any material
legal proceedings.
</FONT>

<P align="center"><FONT size="2">37
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "MANAGEMENT" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="center">
<B><FONT size="2">MANAGEMENT</FONT></B>

<P align="left">
<B><FONT size="2">Directors and Executive Officers</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following sets forth information for each of
our directors and executive officers.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Dr.&nbsp;Graham Edmund Kelly, PhD, aged 57,
    Chairman, Director</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Dr.&nbsp;Kelly was appointed as our Chairman in
April&nbsp;2001. Dr.&nbsp;Kelly founded Novogen in 1992 and has
spent nearly 30&nbsp;years in medical research involving drug
development, immunology, surgery and cancer. Dr.&nbsp;Kelly was
a senior research fellow in experimental surgery in the Faculty
of Medicine at the University of Sydney from 1972 to 1994. He
developed the b-1, 3-glucan and isoflavone intellectual property
now owned by the Novogen Group. Dr.&nbsp;Kelly was Executive
Chairman of Novogen between 1997 and 2000 and continues to act
as project leader for phenoxodiol. Dr.&nbsp;Kelly&#146;s term as
one of our directors expires in 2005.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Christopher Naughton, aged 50, President
    and CEO, Director</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Naughton has been our President and CEO
since our inception in December&nbsp;2000. He also has been the
Managing Director of Novogen since March&nbsp;1997.
Mr.&nbsp;Naughton has degrees in Economics from the Australian
National University and in Law from the University of New South
Wales. He has completed the Program for Management Development
at the Harvard Business School and is admitted to practice as an
attorney in New South Wales. After working in merchant banking,
he has spent the last 18&nbsp;years in the pharmaceutical
industry including appointments as a Director of Wellcome
Australia Limited and in world wide business development with
the Wellcome Foundation Limited in the UK.
Mr.&nbsp;Naughton&#146;s term as one of our directors expires in
2005.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Philip Andrew Johnston, aged 56,
    Director</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Johnston has been one of our directors
since April 2001. Mr.&nbsp;Johnston has had more than
25&nbsp;years&#146; experience in the pharmaceutical industry.
He has been a Non-Executive Director of Novogen since
January&nbsp;1997, and Chairman of Novogen since
January&nbsp;2001. Mr.&nbsp;Johnston spent nine years as an
Executive Director of Wellcome Australia Limited from June 1988
to September 1997. He was previously Director of two subsidiary
companies of GlaxoWellcome. His responsibilities have
encompassed production, distribution, quality assurance and
consumer product development and he has been directly involved
in the establishment of strategic alliances and joint ventures.
Mr.&nbsp;Johnston has completed a number of executive
development programs including programs at the University of NSW
and the London Business School. Mr.&nbsp;Johnston&#146;s term as
one of our directors expires in 2004.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Professor David Morritz de Kretser, aged
    64, Director</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Professor de Kretser has been one of our
Directors since April 2001. Professor de Kretser has been active
in medicine and research for over 30 years, taking on roles
including Professor of the Department of Anatomy, Monash
University, where he has served as a professor since 1978.
Professor de Kretser has been the Executive Chair of the Monash
Institutes of Health and Associate Dean For Biotechnology
Development at Monash University since July 2001 and the
Director of the Australian Centre for Excellence in Male
Reproductive Health since July 2001. He was the Founding
Director of the Monash Institute of Reproduction and Development
and remains as the Director of the Centre for Molecular
Reproduction and Endocrinology within the institute. He has
served on numerous international and national committees dealing
with research and has experience on a number of professional
editorial boards. He has published over 400 research papers and
has been invited to speak at numerous national and international
conferences and symposiums on topics such as fertility,
andrology and endocrinology. Professor de Kretser&#146;s
research has led to a number of patents in Australia and
overseas. He is an Officer of the Order of Australia, a Fellow
of the Australian Academy of Science and a Fellow of the
Australian
</FONT>

<P align="center"><FONT size="2">38
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">Academy of Technological Sciences and
Engineering. Professor de Kretser&#146;s term as one of our
directors expires in 2003.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Professor Paul John Nestel, aged 73,
    Director</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Professor Nestel has been one of our directors
since April 2001. Professor Nestel has been a non-executive
Director of Novogen since September 2001. Since January 1995, he
has been Senior Principal Research Fellow and Head of the
Cardiovascular Nutrition laboratory at the Baker Medial Research
Institute, Victoria. Professor Nestel has also been Consultant
Physician at the Alfred Hospital, Melbourne since January 1995.
He is president of the International Life Sciences Institute
(Australasia) and a member of the board of directors of ILSI
South East Asia. He was formerly Clinical Professor in Medicine,
The Flinders University of South Australia. Professor Nestel is
an Officer of the Order of Australia. Professor Nestel&#146;s
term as one of our directors expires in 2004.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Stephen Breckenridge, aged 60,
    Director</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Breckenridge has been one of our
directors since August 2003. Mr.&nbsp;Breckenridge has had over
25&nbsp;years experience in public practice as a Chartered
Accountant in Australia and since 2001, has been Managing
Director of Breckenridge Consulting Pty Ltd which provides
independent tax and management advice to multi-nationals and
SME&#146;s. Until 2001, Mr.&nbsp;Breckenridge was a tax partner
for 24&nbsp;years with KPMG in Sydney where he provided
corporate tax advice to a wide cross section of business in
Australia and overseas with particular emphasis in more latter
years on international transfer pricing. Mr.&nbsp;Breckenridge
has also been involved in the pharmaceutical and chemical
industries over a long period including serving on several
industry association committees and leading industry focus
groups within KPMG. Mr.&nbsp;Breckenridge holds a Master of Tax
degree from the University of Sydney and is a Fellow of the
Institute of Chartered Accountants and the Taxation Institute of
Australia. Mr.&nbsp;Breckenridge was appointed to our board of
directors on August&nbsp;1, 2003 and his term as one of our
directors expires in 2003.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">David Ross Seaton, aged 49, Chief Financial
    Officer</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Mr.&nbsp;Seaton has been our Chief Financial
Officer and Company Secretary since September 1999 and has been
the Chief Financial Officer of Novogen since December 2000. He
holds a degree in Business Studies as well as a Master of
Commerce degree from the University of New South Wales. He has
completed management development programs at Northwestern
University in Chicago as well as Duke University and the London
Business School. He has 18&nbsp;years experience in the
pharmaceutical industry. Prior to joining Novogen in 1999 was
the Finance Director of GlaxoWellcome Australia Limited from
1995 to 1999.
</FONT>

<P align="left">
<B><FONT size="2">Corporate Governance</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Board of Directors</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our board of directors has responsibility for our
overall corporate governance and meets regularly throughout the
year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Four of our six existing board members are also
currently directors of Novogen. We are a &#147;controlled
corporation&#148; within the meaning given to that term by
Nasdaq because Novogen owns more than 50% of our voting power.
As a controlled corporation, we are exempt from the requirement
that our board be composed of a majority of independent
directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board has established an Audit Committee to
oversee our financial matters and a Remuneration Committee to
review the performance of executive directors and their
remuneration.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Audit Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Audit Committee is responsible for overseeing
our financial and accounting activities, including external
audits and accounting functions. The Audit Committee meets at
least twice each year. The Audit
</FONT>

<P align="center"><FONT size="2">39
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">Committee&#146;s responsibilities include the
annual appointment of our outside auditors and the review of the
scope of audit and non-audit assignments and related fees, the
accounting principles we use in financial reporting, internal
auditing procedures and the adequacy of our internal control
procedures. The members of the Audit Committee are
Mr.&nbsp;Breckenridge (chairman), Mr.&nbsp;Johnston and
Professor de Kretser, all of whom are independent as defined by
applicable and proposed Nasdaq and SEC rules. Stephen
Breckenridge is an audit committee financial expert as defined
by SEC rules.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Remuneration Committee</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Remuneration Committee reviews the
performance of executive directors and sets their remuneration.
The Remuneration Committee also has the power to make
recommendations to the full board concerning the allocation of
share options to directors and employees. The remuneration and
terms of appointment of non-executive directors will be set by
our board of directors. The members of the Remuneration
Committee are Mr.&nbsp;Johnston, Professor de Kretser and Mr.
Breckenridge.
</FONT>

<P align="left">
<B><FONT size="2">Director and Executive Compensation</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Directors</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our directors, other than Dr.&nbsp;Kelly and
Mr.&nbsp;Naughton, receive directors fees of $A30,000
(approximately US$19,000) per annum from us. Dr. Kelly and
Mr.&nbsp;Naughton do not receive any remuneration for performing
their duties as our directors.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Executive Officers</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our executive officers, Dr.&nbsp;Kelly,
Mr.&nbsp;Naughton and Mr.&nbsp;Seaton, are also executive
officers of Novogen and do not receive any remuneration directly
from us in performing their duties as our executive officers. At
the present time, their services are provided to us pursuant to
the services agreement with Novogen.
</FONT>

<P align="left">
<B><FONT size="2">Share Option Plan</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have adopted a share option plan. As of the
date of this prospectus, no options were outstanding under the
share option plan and we have no present intention of granting
any options under the share option plan. We expect that the
board would authorize our remuneration committee to oversee the
plan, but no such action has been taken. The following is a
summary of the plan.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The plan provides our directors, employees,
employees of our affiliates and certain of our contractors and
consultants with the opportunity to participate in our ownership.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The committee will address participation, the
number of options offered and any conditions of exercise. In
making these determinations the committee will generally
consider the participant&#146;s position and record of service
to us and our affiliates and potential contribution to the
growth of us and our affiliates. Any other matters tending to
indicate the participant&#146;s merit may also be considered.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Options will be exercisable between two years and
five years after grant, unless otherwise determined by the
committee appointed by the board. Options granted will be
exercisable at a price determined by the committee at the time
of issue (and will be subject to adjustment in accordance with
the terms of the plan).
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Other key terms of the plan include:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">options will lapse if the participants cease to
    be engaged by us or our affiliates. The committee will have the
    discretion to waive this provision;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the terms of the plan also provide for
    adjustments to the rights of an option holder as a result of a
    reorganization of our capital or other corporate event. The
    holder of an option is not permitted to participate in any
    distributions by us or in any rights or other entitlements
    issued by us to
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">40
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    <FONT size="2">stockholders in respect of our shares unless the
    options are exercised prior to the relevant record date; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">all options vest on the occurrence of certain
    events such as a change of control, as defined in the share
    option plan.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The plan also contains commonly found provisions
dealing with matters such as administration of the plan,
amendment of the plan and termination or suspension of the plan.
</FONT>

<P align="center"><FONT size="2">41
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "BENEFICIAL OWNERSHIP OF COMMON STOCK" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center">
<B><FONT size="2">BENEFICIAL OWNERSHIP OF COMMON STOCK</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">None of our directors or executive officers own
any shares of our capital stock. The following table sets forth
information with respect to the beneficial ownership of our
common stock by owners of more than 5% of our common stock as of
September&nbsp;24, 2003. The person named in this table has sole
voting and investment power with respect to the shares of common
stock shown.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number Beneficially</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned Before and</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Shares Beneficially</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Percentage of Shares</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Name and Address of</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">After this Offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Owned Before this</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Beneficially Owned</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Beneficial Owner</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">of Shares</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Offering</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">After this Offering</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Novogen Limited
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">95.1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">91.6</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">%</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">140 Wicks Road
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">North Ryde 2113
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Australia
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">42
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="center">
<B><FONT size="2">CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our key assets include the agreements we have
entered into with Novogen. These agreements are each summarized
below. The following description is only a summary of what we
believe are the material provisions of the agreements. Copies of
the agreements have been filed with the Securities and Exchange
Commission as exhibits to the registration statement of which
this prospectus forms a part.
</FONT>

<P align="left">
<B><FONT size="2">The Amended and Restated License
Agreement</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">General</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen&#146;s subsidiary, Novogen Research Pty
Limited, has granted our subsidiary, Marshall Edwards Pty
Limited, a world-wide, non-transferable license under its
patents and patent applications and in its licensed know-how to
conduct clinical trials and commercialize and distribute
phenoxodiol products. We and Novogen have each guaranteed the
obligations of our respective subsidiaries under this license
agreement. The license is exclusive until the expiration or
lapsing of the last relevant Novogen patents or patent
applications in the world, and thereafter is non-exclusive for
the remainder of the term of the agreement. The license grants
us the right to make, have made, market, distribute, sell, hire
or otherwise dispose of phenoxodiol products in the field of
prevention, treatment or cure of cancer in humans by
pharmaceuticals delivered in all forms except topical
applications.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are obliged to continue current, and undertake
further, clinical trials of phenoxodiol, and are responsible for
paying for all materials necessary to conduct clinical trials,
must conduct all such trials diligently and professionally, must
use reasonable endeavors to design and conduct clinical trials
to generate outcomes which are calculated to result in
regulatory approval of phenoxodiol products, and must keep
proper records of all clinical trials and allow Novogen to
inspect those records.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All intellectual property rights in the
medication, trial protocols, results of the clinical trials,
case report forms and any other materials used in the conduct of
the clinical trials are assigned by us to Novogen and we must
not publish the results of clinical trials without the prior
written consent of Novogen.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may not sub-license, sub-contract, or engage
agents without the prior written consent of Novogen. Any
proposed sub-contractors and agents must first agree in writing
to comply with certain confidentiality obligations and to assign
to Novogen all intellectual property rights in the Field created
or acquired by them in the course of their engagement.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Marketing and
    Commercialization</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may market and commercialize phenoxodiol
products under the license in any manner we think fit, so long
as we conduct any marketing and commercialization activities on
a commercially reasonable basis in compliance with applicable
laws and regulations, comply with reasonable directions given by
Novogen, act in a manner which we consider to be most beneficial
to the interests of us and Novogen, and otherwise act in good
faith to Novogen. All advertising and promotional material must
be submitted to Novogen for prior approval.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Fees, Charges and Costs</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table summarizes our responsibility
for fees, charges and costs under the license agreement.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="27%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Payee</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Fee/Cost</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Novogen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">License Fees
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">During the exclusivity period:
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">&#149;&nbsp;2.5% of the net sales of phenoxodiol
    products (invoice price less trade discounts and returns taken);
    and
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">43
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="25%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="58%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="center" nowrap><B><FONT size="1">Payee</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Fee/Cost</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Description</FONT></B></TD>
</TR>

<TR>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">&#149;&nbsp;25% of all gross income received by
    or on behalf of us (or our affiliates other than Novogen) from
    the assignment, sublicensing or other dealing with our rights
    under the agreement, which we refer to as commercialization
    income.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">After the exclusivity period, 1.5% of all net
    sales of phenoxodiol products on the basis described above.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Novogen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">First lump sum license fee
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">A lump sum license fee of $5&nbsp;million is
    payable on the later of November&nbsp;1, 2002 or the date on
    which the cumulative total of the funds (debt or equity)
    received by us or our affiliates other than Novogen and the
    income derived by us or our affiliates other than Novogen and
    from sales of phenoxodiol products or commercialization income
    exceeds $25 million.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Novogen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Second lump sum<BR>
    license Fee
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">A further lump sum license fee of $5 million is
    payable on the later of November&nbsp;1, 2003 or the date on
    which the cumulative total of the funds (debt or equity)
    received by us or our affiliates other than Novogen and the
    income derived by us or our affiliates other than Novogen from
    sales of phenoxodiol products or commercialization income
    exceeds $50 million.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Novogen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Annual License Fees
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">For each calendar year set out below for the
    duration of the exclusivity period, the annual license fees are:
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">&#149;&nbsp;calendar year ending
    December&nbsp;31, 2003: $1&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">&#149;&nbsp;calendar year ending
    December&nbsp;31, 2004: $2&nbsp;million;
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">&#149;&nbsp;calendar year ending
    December&nbsp;31, 2005: $4&nbsp;million; and
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">&#149;&nbsp;each calendar year following the year
    ending December&nbsp;31, 2005: $8&nbsp;million,
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">less any amount payable to Novogen during that
    calendar year pursuant to the first lump sum license fee
    referred to above.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Novogen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Patent Costs
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We must reimburse Novogen one half of the costs
    of filing, prosecution and maintenance of the licensed patent
    rights.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Novogen
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Goods and Service Tax
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Any goods and services tax payable on any amounts
    paid under the agreement.
    </FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Various
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Withholding Tax
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">We must pay the amount of any withholding taxes
    payable in any country and must gross-up any royalties withheld.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Interest accrues daily on the outstanding balance
of all overdue amounts payable to Novogen under the license
agreement.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may terminate the license agreement at any
time, by giving three months&#146; notice to Novogen. We may
also terminate the agreement if Novogen commits a breach of any
of its material obligations under the agreement, becomes the
subject of certain bankruptcy proceedings or is unable to
lawfully perform its obligations. Novogen may terminate the
agreement if we commit a breach of any of our material
</FONT>

<P align="center"><FONT size="2">44
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">obligations under the agreement, become the
subject of certain bankruptcy proceedings or are unable to
lawfully perform our obligations. Novogen may also terminate the
agreement immediately if a change of control, as defined in the
license agreement, occurs without the consent of Novogen.
</FONT>
</DIV>

<P align="left">
<B><FONT size="2">The Amended and Restated Manufacturing License
and Supply Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our subsidiary, Marshall Edwards Pty Limited has
granted to Novogen&#146;s subsidiary, Novogen Laboratories Pty
Limited, an exclusive, non-transferable sub-license to
manufacture and supply phenoxodiol to us in its primary
manufactured form. We and Novogen have each guaranteed the
obligations of our respective subsidiaries under this
manufacturing license and supply agreement. Novogen must not
sublicense its rights or engage agents or subcontractors to
exercise its rights or perform its obligations under the
agreement without our prior written consent.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supply of
Phenoxodiol</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We provide to Novogen rolling forecasts quarterly
of our estimated supply requirements for phenoxodiol, and issue
purchase orders for phenoxodiol to Novogen specifying the volume
of phenoxodiol required. Novogen must confirm the quantity it is
able to supply to fulfill the purchase order within 5 business
days of receiving the purchase order. Novogen must then supply
the volume of phenoxodiol it agreed to supply, and must
otherwise use all reasonable endeavors to fulfill the purchase
order. Novogen must manufacture and deliver phenoxodiol to us at
a port nominated by us. Title to the phenoxodiol does not pass
to us until we have paid the purchase price (as described below)
and retention of title arrangements apply.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">If Novogen materially and persistently fails to
supply the amount of phenoxodiol ordered by us by the required
date, we may manufacture (or engage a third party, without
Novogen&#146;s consent, to manufacture) the amount of the
shortfall of phenoxodiol until Novogen demonstrates that it is
able to consistently supply phenoxodiol in accordance with our
requirements. In this case, Novogen must take all reasonable
steps to make available to us or the third party, on commercial
terms, the know-how necessary to enable that manufacture to
occur.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fees and
Charges</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purchase price for phenoxodiol supplied is
the total costs to Novogen, plus a mark-up of 50%. The purchase
price may be adjusted quarterly by Novogen by reference to the
actual costs referred to above for the preceding quarter. If at
any time we do not pay any amount due to Novogen, Novogen may
suspend the supply of phenoxodiol to us until payment is
received.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing
Developments and Improvements</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each party must disclose to the other any new
developments, improvements and new know-how relating to the
manufacture of phenoxodiol which are made or acquired by it
during the term of the agreement. All intellectual property
rights in developments, improvements and new know-how made or
acquired by Novogen are to be assigned to us. We must provide to
Novogen such technical information and assistance as Novogen
laboratories reasonably requests in order to exercise its rights
and perform its obligations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each party acknowledges that nothing in the
agreement shall have the effect of transferring or assigning to
Novogen any right, title or interest in any intellectual
property rights in the phenoxodiol products licensed under the
agreement.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen agrees to notify us immediately on
becoming aware of any infringement of the intellectual property
rights in the licensed products or any claim by a third party
that the activities of the parties under the agreement infringe
such third party&#146;s intellectual property rights. If
required, Novogen agrees to be a party to any proceedings
brought by us in relation to any infringement of intellectual
property rights in the
</FONT>

<P align="center"><FONT size="2">45
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">licensed products and also agrees, at our cost,
to provide all reasonable assistance in relation to such
proceedings and to execute such documents as we reasonably
require.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Termination</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Either party may terminate the agreement
immediately at any time if the other party becomes the subject
of certain bankruptcy proceedings, becomes unable to carry out
the transactions contemplated by the agreement or breaches its
obligations and does not cure such breach within 21&nbsp;days
notice. We may also terminate the agreement immediately if the
license agreement expires or is terminated. Novogen may also
terminate the agreement immediately if a change of control, as
defined in the manufacturing license and supply agreement,
occurs without the consent of Novogen.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Limitation of Liability</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The liability of Novogen for breach of conditions
or warranties imposed by statute is limited to the replacement
of goods; supply of equivalent goods, repair or replacement
value of goods or the resupply or payment for resupply of
services.
</FONT>

<P align="left">
<B><FONT size="2">The Amended and Restated License Option
Deed</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen&#146;s subsidiary, Novogen Research Pty
Limited, has granted our subsidiary, Marshall Edwards Pty
Limited, an exclusive first right to accept and an exclusive
last right to match any proposed dealing by Novogen with its
intellectual property rights with a third party relating to
certain synthetic pharmaceutical compounds (other than
phenoxodiol) developed by Novogen or its affiliates. We and
Novogen have each guaranteed the obligations of our respective
subsidiaries under the license option deed.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Option Compounds</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The rights relate to all synthetic pharmaceutical
compounds, known as Option Compounds, delivered or taken in all
forms except topical applications (other than phenoxodiol, which
is the subject of the license agreement), developed before or
during the term of the deed, by or on behalf of Novogen or its
affiliates, which have known applications in the Field of
prevention, treatment or cure of cancer in humans.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Dealings in Option Compounds and Exercise
    of Rights</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen must not, and must ensure that its
affiliates other than us do not, deal, solicit entertain or
discuss dealings with any intellectual property rights in the
Field or in relation to any Option Compounds without giving us
an exclusive first right to accept and an exclusive last right
to match any such dealing. If we exercise our first right to
accept or last right to match, Novogen must deal with the
intellectual properly rights in favor of us on the terms and
conditions proposed. We have 15 business days to exercise those
rights and, if we fail to do so, Novogen may deal with those
intellectual property rights in favor of a third party provided
that the terms are no more favorable to that third party than
those first offered to us or which we declined to match.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Protection of Intellectual
    Property</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen must act in good faith toward us in
relation to its obligations under the deed and must ensure that
all persons involved in any research or development work in the
Field in relation to Option Compounds assign all intellectual
property rights relating to the Option Compounds to Novogen.
Novogen must also ensure that its affiliates, other than us, do
the same. Novogen continues to be solely responsible for the
maintenance of any patent rights in the Option Compounds, which
it may maintain and enforce at its sole discretion and expense.
</FONT>

<P align="center"><FONT size="2">46
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Development Reports</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen must provide to us from time to time and
in no event less frequently than every six months development
reports relating to the clinical trials and development of
Option Compounds, and must notify us immediately of any
regulatory approvals granted and assessments made by any
government agency.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Term and Termination</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The term of the deed is sixteen years from the
commencement date, unless terminated earlier. We may terminate
the deed at any time on three month&#146;s notice to Novogen.
Either party may terminate the deed immediately at any time if
the other party becomes the subject of certain bankruptcy
proceedings, becomes unable to carry out the transactions
contemplated by the agreement or breaches its obligations and
does not cure such breach within 21&nbsp;days notice.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen may also terminate the deed immediately
if a change of control, as defined in the license option deed,
occurs without the consent of Novogen.
</FONT>

<P align="left">
<B><FONT size="2">The Amended and Restated Services
Agreement</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen has agreed to provide a range of services
to us, or procure that its subsidiaries provide those services.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">These services include providing general
assistance and advice on research and development and
commercializing phenoxodiol products and other compounds in
which we may acquire intellectual property rights in the future,
such as Option Compounds in relation to which we have exercised
its rights under the license option deed.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen&#146;s obligations also include
providing, within the agreed budgets described below, our needs
with respect to secretarial, marketing, finance, logistics,
administrative and managerial support. Novogen also plans,
conducts and supervises pre-clinical and clinical trials with
phenoxodiol and with other compounds in which we have
intellectual property rights. Novogen also provides scientific
and technical advice on management of pre-clinical and clinical
research programs undertaken by us and manages such research
provisions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen may not sub-contract the provision of any
part of the services without our prior written consent.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Fees for Services</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We pay services fees to Novogen in accordance
with an agreed annual budget. At the beginning of each financial
year Novogen prepares a budget estimate for us with respect to
the percentage of time spent by Novogen&#146;s employees and
consultants in the provision of services to us in the previous
financial year and any relevant considerations which are likely
to influence the time spent for the following financial year.
Each estimate must include the remuneration paid by Novogen to
each person expected to provide the services and the percentage
of time Novogen expects those persons will spend on our
business, the allocated on-costs attributable to each person, a
premises rental charge and a charge for asset usage and general
overheads. The total estimate is to be the sum of these charges
plus a mark-up of 10%. We also pay Novogen&#146;s reasonable out
of pocket expenses incurred in providing the services to us. At
the end of the fiscal year an adjustment is made to reflect
actual costs incurred where they differ from budget.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Intellectual Property and
    Confidentiality</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All intellectual property rights created by
Novogen in the performance of the services for or at the request
of us are licensed to us. Each party also has obligations to the
other party to honor the other&#146;s confidential information
confidential.
</FONT>

<P align="center"><FONT size="2">47
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Termination</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We may terminate our rights and obligations under
the services agreement on three months&#146; written notice to
Novogen. Either we or Novogen may terminate the agreement
immediately at any time if the other party becomes the subject
of certain bankruptcy proceedings, becomes unable to carry out
the transactions contemplated by the agreement, breaches its
obligations and does not cure such breach within 21&nbsp;days
notice or if a change of control in the other party occurs.
Novogen may also terminate the agreement immediately if a change
of control, as defined in the services agreement, occurs without
the consent of Novogen.
</FONT>

<P align="center"><FONT size="2">48
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "DESCRIPTION OF OUR SECURITIES" -->
<DIV align="left"><A NAME="015"></A></DIV>

<P align="center">
<B><FONT size="2">DESCRIPTION OF OUR SECURITIES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The shares of common stock and warrants offered
hereby will be sold only in units. Each common stock unit
consists of one share of common stock and one warrant to
purchase one share of common stock. No common stock units have
been issued prior to this offering.
</FONT>

<P align="left">
<B><FONT size="2">Description of our Capital Stock</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our total authorized share capital is 113,100,000
shares consisting of 113,000,000 shares of common stock,
$0.00000002 par value per share, and 100,000 shares of preferred
stock, $0.01 par value per share. As of the date of this
prospectus, 52,032,000 shares of our common stock and no shares
of preferred stock are issued and outstanding.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Common Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The holders of common stock are entitled to one
vote per share. In the event of a liquidation, dissolution or
winding up of our affairs, holders of the common stock will be
entitled to share ratably in all our assets that are remaining
after payment of our liabilities and the liquidation preference
of any outstanding shares of preferred stock. All outstanding
shares of common stock are fully paid and non-assessable. The
rights, preferences and privileges of holders of common stock
are subject to any series of preferred stock that we have issued
or that we may issue in the future. The holders of common stock
have no preemptive rights and are not subject to future calls or
assessments by us.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Preferred Stock</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The board has the authority to issue up to
100,000 shares of preferred stock in one or more series and to
fix the rights, preferences, privileges and restrictions in
respect of that preferred stock, including dividend rights,
dividend rates, conversion rights, voting rights, terms of
redemption (including sinking fund provisions), redemption
prices and liquidation preferences, and the number of shares
constituting such series and the designation of any such series,
without future vote or action by the shareholders. Therefore,
the board without the approval of the shareholders could
authorize the issue of preferred stock with voting, conversion
and other rights that could affect the voting power, dividend
and other rights of the holders of shares or that could have the
effect of delaying, deferring or preventing a change of control.
As of the date of this prospectus, we have no plans to issue any
preferred stock.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Transfer Agent</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our transfer agent is Computershare Investor
Services, LLC, Two North La Salle Street, Chicago, Illinois
60602.
</FONT>

<P align="left">
<B><FONT size="2">Description of our Warrants</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Warrants included in the common stock
    units</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each warrant included in the common stock units
represents the right to purchase one share of our common stock
at an exercise price equal to 120% of the initial public
offering price set forth on the cover of this prospectus. The
warrants are immediately exercisable and will expire three years
after the date they are issued. The number of shares of our
common stock to be received upon the exercise of each warrant
may be adjusted from time to time upon the occurrence of certain
events, including but not limited to the payment of a dividend
or other distribution in respect common stock, subdivisions,
reclassifications or combinations of our common stock. The
securities receivable upon exercise of each warrant may be
adjusted in the event of any reorganization, consolidation,
merger, liquidation or similar event.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have authorized and reserved for issuance all
shares of common stock issuable upon exercise of each warrant.
</FONT>

<P align="center"><FONT size="2">49
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Holders of the warrants may only exercise their
warrants for the purchase of shares of common stock if a
registration statement and current prospectus relating to these
shares is then in effect and only if the shares are qualified
for sale, or deemed to be exempt from qualification under
applicable state securities laws. We are required to use our
best efforts to maintain a current prospectus relating to these
shares of common stock at all times when the market price of the
common stock exceeds the exercise price of the warrants, until
the expiration date of the warrants. We cannot assure you that
an effective registration statement or current prospectus will
be available at the time you desire to exercise your warrants.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon exercise of the warrants included in the
units, we will, as soon as reasonably practicable, apply to the
Alternative Investment Market of the London Stock Exchange for
the admission of the shares of common stock underlying the
warrants. Under the rules of the Alternative Investment Market,
we must submit an application form in respect of such shares at
least three business days before the expected date of admission.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">For the term of the warrants, the holders thereof
are given the opportunity to profit from an increase in the per
share market price of our common stock, with a resulting
dilution in the interest of all other shareholders. So long as
the warrants are outstanding, the terms on which we could obtain
additional capital may be adversely affected. The holders of the
warrants might be expected to exercise them at a time when we
would, in all likelihood, be able to obtain additional capital
by a new offering of securities on terms more favorable than
those provided by the warrants.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Outstanding Warrants</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">As of the date of this prospectus, warrants to
purchase an aggregate of 2,514,000 shares of our common stock
are outstanding. These warrants have the same terms and
provisions as the warrants included in the units, except the
existing warrants are currently exercisable, have an exercise
price of $4.00 per share and expire on November&nbsp;30, 2003.
</FONT>

<P align="left">
<B><FONT size="2">Summary of our By-Laws and Certificate of
Incorporation and certain Provisions of the Delaware General
Corporation Law (DGCL)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following summary of the terms and provisions
of the our certificate of incorporation, by-laws, certain
aspects of the DGCL does not purport to be complete. Reference
should be made to our certificate of incorporation and our
by-laws and to applicable law for the complete description.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Meetings of Stockholders and
    Voting</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our by-laws provide for an annual meeting of
stockholders, the date of which is fixed by the board. Meetings
of stockholders may be held at such place as may be designated
by the board. Stockholders are entitled to inspect our books and
records to the extent allowable by Delaware law. Our by-laws
provide that a quorum for the transaction of business at any
meeting of stockholders is stockholders holding at least
one-third of the shares entitled to vote at such meeting.
Decisions at stockholder meetings will normally be made by a
majority of votes cast except in the case of any resolution
that, as a matter of law, requires a special majority. Each
stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to each corporate action in writing
without a meeting may authorize another person or persons to act
for him or her by proxy.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Appointment and Removal of
    Directors</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation and by-laws
provide that the number of directors will be set by the board,
but shall be between two and nine. We currently have six
directors.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under our certificate of incorporation and
by-laws, directors are to be appointed at the annual general
meeting for a term of three years unless the director is
removed, retires or the office is vacated earlier. Our
</FONT>

<P align="center"><FONT size="2">50
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">board is divided into three classes with respect
to the term of office, with the terms of office of one class
expiring each successive year.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A director may resign at any time. The
resignation is effective on our receipt of notice. Any or all
directors may be removed with or without cause by a resolution
of stockholders entitled to vote to elect directors. Vacancies
may be filled by resolution of a majority of directors then in
office or by a sole remaining director, and any director so owed
shall serve for the remainder of the full term of the class of
directors in which the vacancy occurred.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Amendments of the By-Laws</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our by-laws provide that the power to amend the
by-laws will vest in the directors, subject to the reserved
power of the stockholders to amend or repeal any by-laws adopted
by the board.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Amendments of the Certificate of
    Incorporation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation can be amended,
after the approval and recommendation of the amendment by the
board of directors, by a majority vote of our stockholders,
except for certain matters rotated to the board for which the
certificate of incorporation requires a vote of not less than
eighty percent (80%) of the outstanding shares eligible to be
cast and certain other matters for which Delaware law requires a
supermajority vote.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Indemnification of Directors and
    Officers</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation provides that we
will indemnify our directors and officers to the fullest extent
permitted by the DGCL. Section&nbsp;145 of the DGCL provides
that the extent to which a corporation may indemnify its
directors and officers depends on the nature of the action
giving rise to the indemnification right. In actions not on
behalf of the corporation, directors and officers may be
indemnified for acts taken in good faith and in a manner
reasonably believed to be in or not opposed to the best
interests of the corporation. In actions on behalf of the
corporation, directors and officers may be indemnified for acts
taken in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the corporation, except
for acts as to which the director or officer is adjudged liable
to the corporation, unless the relevant court determines that
indemnification is appropriate despite such liability.
Section&nbsp;145 also permits a corporation to
(i)&nbsp;reimburse present or former directors or officers for
their defense expenses to the extent they are successful on the
merits or otherwise and (ii)&nbsp;advance defense expenses upon
receipt of an undertaking to repay the corporation if it is
determined that payment of such expenses is unwarranted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To supplement the general indemnification right
contained in our certificate of incorporation, the by-laws
provide for the specific indemnification rights permitted by
Section&nbsp;145 (as described above). The by-laws also permit
us to purchase directors and officers insurance, but no director
or officer has a right to require this.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the indemnification rights
described above, our certificate of incorporation eliminates any
monetary liability of directors to us or our shareholders for
breaches of fiduciary duty except for (i)&nbsp;breaches of the
duty of loyalty, (ii)&nbsp;acts or omissions in bad faith,
(iii)&nbsp;improper dividends or share redemptions and
(iv)&nbsp;transactions from which the director derives an
improper personal benefit.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Indemnification of Novogen</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our certificate of incorporation provides that we
will indemnify Novogen to the fullest extent permitted by the
DGCL in connection with certain actions brought against Novogen
by us, any of our stockholders or any other person.
</FONT>

<P align="center"><FONT size="2">51
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="left">
<B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Transactions
and Corporate Opportunities</I></FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under our amended and restated certificate of
incorporation, we are subject to certain provisions which serve
to define and delineate the respective rights and duties of us,
Novogen and some of our directors and officers in situations
where:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Novogen invests or engages in business activities
    that are the same as, or similar to, our business activities,
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">directors, officers and/or employees of Novogen
    serve as our directors and/or officers, and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">Novogen has interest in a potential transaction
    or matter in which we have a similar interest in exploiting as a
    matter of corporate opportunity.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to our amended and restated certificate
of incorporation, Novogen has no duty to refrain from investing
or engaging in activities or lines of business similar to ours
and neither Novogen nor any of its officers, directors,
stockholders, affiliates, subsidiaries or employees will be
liable to us or our stockholders for breach of any fiduciary
duty by reason of any of these activities. In addition, if
Novogen acquires knowledge of a potential transaction or matter
which may be a corporate opportunity for both our company and
Novogen, then neither Novogen nor any of its officers,
directors, stockholders, affiliates, subsidiaries or employees
will have a duty to communicate or offer this corporate
opportunity to us and will not be liable to us or our
stockholders for breach of any fiduciary duty as a stockholder
by reason of the fact that Novogen or any other such person
pursues or acquires the corporate opportunity for itself,
directs the corporate opportunity to another person or does not
communicate information regarding the corporate opportunity to
us.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We do not release from potential liability our
own officers and directors in instances where a corporate
opportunity is offered to the officer and/or director in his or
her capacity as an officer and that person:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">serves as a director, officer or employee of
    Novogen while holding the position of a director but not officer
    of our company; or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">serves as an officer or employee of Novogen and
    serves as one of our officers.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Further, any of our officers who is also a
Novogen director but not a Novogen officer or employee may be
potentially liable for exploiting our corporate opportunities
whether or not such opportunity was offered to that officer in
his or her official capacity.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">By becoming one of our stockholders, you will be
deemed to have notice of and consented to these provisions of
our amended and restated certificate of incorporation. Until
Novogen ceases to beneficially own common stock representing at
least 20% of the voting power of our outstanding capital stock,
these provisions may not be amended or repealed except by the
vote of the holders of 80% of the voting power of our
outstanding shares of capital stock.
</FONT>

<P align="center"><FONT size="2">52
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "SHARES ELIGIBLE FOR FUTURE SALE" -->
<DIV align="left"><A NAME="016"></A></DIV>

<P align="center">
<B><FONT size="2">SHARES ELIGIBLE FOR FUTURE SALE</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, there will be
54,032,000 shares of our common stock outstanding. Of the shares
which will be outstanding after the offering:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">all 2,000,000 shares included in the common stock
    units and sold in this offering will be freely tradeable;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">2,532,000&nbsp;shares will be &#147;restricted
    securities&#148; held by non-affiliates; and
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">49,500,000 shares will be held by Novogen.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The restricted securities described above, of
which 2,523,000 were issued in May 2002, and of which 9,000 were
issued upon exercise of outstanding warrants, will be eligible
for sale in the public market 90&nbsp;days after the date of
this prospectus, subject to volume limitations, manner of sale
provisions and other requirements of Rule&nbsp;144, from time to
time. We also have outstanding warrants to purchase an aggregate
of 2,514,000 shares of our common stock. These warrants have an
exercise price of $4.00 per share and expire on
November&nbsp;30, 2003. Any shares of our common stock issued
upon exercise of these warrants will also be restricted
securities.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In general, under Rule&nbsp;144 as currently in
effect, a person who has beneficially owned restricted
securities for at least one year, including an affiliate, is
entitled to sell, within any three-month period, a number of
shares that does not exceed the greater of:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">one percent of the then outstanding shares of our
    common stock (approximately 540,320&nbsp;shares immediately
    following this offering); or
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">the average weekly trading volume during the four
    calendar weeks preceding filing of notice of such sale.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">A person (or persons whose shares are aggregated)
who is not deemed to have been an affiliate of ours at any time
during the 90&nbsp;days preceding a sale and who owns shares
that were acquired from us or an affiliate of ours for at least
two years prior to the proposed sale is entitled to sell such
shares pursuant to Rule&nbsp;144(k) without regard to the volume
limitations, manner of sale provisions or other limitations of
Rule&nbsp;144.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Shares held by Novogen may be sold in the public
market, subject to the volume, manner of sale and other
limitations of Rule&nbsp;144, but may not be sold in reliance
upon Rule&nbsp;144(k).
</FONT>

<P align="center"><FONT size="2">53
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "PLAN OF DISTRIBUTION" -->
<DIV align="left"><A NAME="017"></A></DIV>

<P align="center">
<B><FONT size="2">PLAN OF DISTRIBUTION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Of the common stock units offered by this
prospectus, 500,000 units are being offered by means of an
underwritten public offering and 1,500,000&nbsp;units are being
offered by means of a directed share subscription program to
eligible holders of ordinary shares and American Depositary
Receipts of Novogen and to our eligible shareholders, excluding
Novogen.
</FONT>

<P align="left">
<B><FONT size="2">Underwritten Public Offering</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Subject to the terms and conditions of an
underwriting agreement entered into between us and Janney
Montgomery Scott&nbsp;LLC, as underwriter, the underwriter has
agreed to purchase, and we have agreed to sell to the
underwriter, 500,000&nbsp;shares of our common stock units
(excluding 300,000&nbsp;units that the underwriter has the
option to purchase to cover over-allotments, if any), as well as
any common stock units that are not subscribed for as part of
the directed share subscription program.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriting agreement provides that the
obligations of the underwriter are subject to various
conditions, including approval of certain legal matters by its
counsel. The nature of the underwriter&#146;s obligations is
that the underwriter is committed to purchase and pay for on a
firm commitment basis the common stock units referenced above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following tables shows the per common stock
unit and total underwriting discounts and commissions we will
pay to the underwriter. These amounts are shown assuming both no
exercise and full exercise of the over-allotment option to
purchase additional common stock units as part of the
underwritten offering.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="50%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="10%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Without</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">With</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Over-Allotment Exercise</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Over-Allotment Exercise</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Per Common Stock Unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The underwriter proposes to offer the common
stock units directly to the public at the public offering price
listed on the cover page of this prospectus. After this
offering, the underwriter may change the offering price to the
public.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have granted to the underwriter an option to
purchase up to an aggregate of 300,000 additional common stock
units at the public offering price, less underwriting discounts
and commissions, listed on the cover page of this prospectus,
solely to cover over-allotments, if any.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">This offering of common stock units is made for
delivery when, as and if accepted by the underwriter and subject
to prior sale to withdrawal, cancellation or modification of the
offering without notice. The underwriter or we reserve the right
to reject any order for the purchase of units in whole or in
part.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have agreed to indemnify the underwriter
against liabilities, including liabilities to which the
underwriter may become subject under any applicable federal or
state law or otherwise, and to continue to reimburse payments
the underwriter may be required to make with respect to these
liabilities.
</FONT>

<P align="left">
<B><FONT size="2">Directed Share Subscription Program</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Of the 2,000,000 common stock units being offered
pursuant to this prospectus, we are offering up to an aggregate
of 1,500,000 units at the public offering price to eligible
holders of ordinary shares and American Despositary Shares of
Novogen and to our eligible shareholders, excluding Novogen, who
owned their shares as of the close of business
on &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003. Janney Montgomery Scott LLC will act as our dealer manager
in connection with our directed share subscription program.
Eligible shareholders may purchase one unit for every:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;ordinary shares of
    Novogen held;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;American
    Despositary Receipts of Novogen held; and
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">54
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">&#149;&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares of our
    common stock held;
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">up until the aggregate 1,500,000 units are
purchased.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each eligible holder who purchases his or her
allotment as described above may also purchase additional units
at the same purchase price per share. The number of additional
units available for this over-subscription privilege will depend
on how many holders purchase their full allotment of units. If
there are not enough of our units available to fully satisfy all
of the over-subscription privilege requests, the available units
will be distributed among eligible holders who exercised their
over-subscription privilege. In the event you choose to exercise
the over-subscription privilege but receive less than you
requested, you will receive a refund for the subscription price
of any shares you do not receive promptly after the closing of
this offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Janney Montgomery Scott LLC has agreed to
purchase any units allocated to the directed share subscription
program to the extent that such units are not purchased by the
eligible shareholders under the directed share subscription
program.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Sales under the directed share subscription
program will close on the closing of the sale of the other units
offered to the public. It is expected that sales under the
directed share subscription program will be reflected in each
purchaser&#146;s book-entry account at the Depository Trust
Company, if any, shortly after the closing of these sales. After
the closing of these sales, we will mail stock certificates and
warrants to all purchasers who do not maintain book-entry
accounts at the Depository Trust Company. Distribution of share
certificates purchased through the directed share subscription
program will be made to the purchasers as soon as practicable
following closing of the sale of the shares to the public.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The purchase price for the units under the
directed share subscription program will be the same price per
unit as that offered to the public and set forth on the cover
page of this prospectus. For purposes of this prospectus, when
we present financial data that reflects this offering, it is
assumed that all shares offered under the directed share
subscription program are sold. The underwriter will receive a
percentage management fee on all units offered through the
directed share subscription program. The management fee
represents compensation for the underwriter&#146;s role as it
relates to due diligence, participation in the drafting of this
prospectus and general coordination of the overall offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table shows the per common stock
unit and total management fees to be paid by us to the dealer
manager. These amounts are shown assuming that the direct share
subscription program is fully subscribed.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="56%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="11%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Directed Share</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Subscription Program</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Per Common Stock Unit
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We estimate that the total expenses of this
offering, including both the underwritten public offering and
the directed share subscription program, but excluding the
underwriting discount and management fees, will be approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
which includes a
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;non-accountable
expense allowance payable to the underwriter for costs and
expenses (including price stabilization) associated with this
offering.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The expenses of the directed share subscription
program, exclusive of the management fee to be paid to the
underwriter, are estimated at
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
are payable by us.
</FONT>

<P align="center"><FONT size="2">55
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "LEGAL MATTERS" -->
<DIV align="left"><A NAME="018"></A></DIV>

<P align="center">
<B><FONT size="2">LEGAL MATTERS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The validity of the securities offered hereby
will be passed upon for us by Morgan, Lewis &#38; Bockius LLP.
Certain legal matters will be passed upon for the underwriter by
Pepper Hamilton LLP.
</FONT>

<!-- link1 "EXPERTS" -->
<DIV align="left"><A NAME="019"></A></DIV>

<P align="center">
<B><FONT size="2">EXPERTS</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements of Marshall
Edwards, Inc. (a development stage company) at June&nbsp;30,
2003 and 2002, and for the years then ended and for the period
from December&nbsp;1, 2000 (inception)&nbsp;through
June&nbsp;30, 2003, appearing in this prospectus and
registration statement have been audited by Ernst&nbsp;&#38;
Young LLP, independent auditors, and the information under the
caption &#147;Summary Historical Consolidated Financial
Data&#148; for each of the two years in the period ended
June&nbsp;30, 2003 and for the period from December&nbsp;1, 2000
(inception)&nbsp;through June&nbsp;30, 2003, appearing in this
prospectus and registration statement have been derived from
consolidated financial statements audited by Ernst &#38; Young
LLP, as set forth in their report thereon appearing elsewhere
herein.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Such consolidated financial statements and
summary historical consolidated financial data are included in
reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
</FONT>

<!-- link1 "AVAILABLE INFORMATION" -->
<DIV align="left"><A NAME="020"></A></DIV>

<P align="center">
<B><FONT size="2">AVAILABLE INFORMATION</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have filed with the SEC a registration
statement on Form&nbsp;S-1 with respect to the common stock
units offered hereby. This prospectus, which constitutes a part
of the registration statement, does not contain all of the
information set forth in the registration statement or the
exhibits and schedules which are part of the registration
statement. For further information with respect to us and our
common stock and the attached rights, reference is made to the
registration statement and the exhibits and schedules thereto.
You may read and copy any document we or Novogen periodically
file at the SEC&#146;s public reference room in Washington, D.C.
Please call the SEC at 1-800-SEC-0330 for further information on
the public reference room. These SEC filings are also available
to the public from the SEC&#146;s website at http://www.sec.gov.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Upon completion of this offering, we will become
subject to the information and periodic reporting requirements
of the Securities Exchange Act and, in accordance therewith,
will file periodic reports, proxy statements and other
information with the SEC. Such periodic reports, proxy
statements and other information will be available for
inspection and copying at the SEC&#146;s public reference rooms
and the website of the SEC referred to above.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We are required by the Alternative Investment
Market of the London Stock Exchange to prepare half-yearly
reports and annual audited accounts. You may request a copy of
these reports, which we will provide to you at no cost, by
writing or calling us at our mailing address and telephone
number: 140&nbsp;Wicks Road, North Ryde NSW&nbsp;2113,
Australia, telephone: (011)&nbsp;61&nbsp;2&nbsp;8877&nbsp;6196.
</FONT>

<P align="center"><FONT size="2">56
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "ANNEX A" -->
<DIV align="left"><A NAME="021"></A></DIV>

<DIV align="right">
<B><FONT size="2">ANNEX A</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">GLOSSARY OF TERMS</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Androgens&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">male sex hormones, e.g. testosterone
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Anti-androgen&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">a process that reduces the biological impact of
    androgens, either by blocking the production of androgens or by
    interfering with their function
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Apoptosis&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the process of programmed cell death by which a
    cell dies naturally
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Bio-available&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">absorbed into the body in a useable form
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Blood plasma&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the liquid component of blood
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Bolus injection&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">an intravenous injection delivered quickly
    (usually over several minutes)
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Chemotherapy&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the treatment of cancer by drugs
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Cytostatic&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the process by which a cell is prevented from
    dividing
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Cytotoxic&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">having a lethal effect on cells
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Death Receptor&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">signaling molecule that when activated causes
    cell death
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Differentiation&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the process by which new cells develop the
    appearance and functions of a mature cell
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Di-phenols&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">a chemical term referring to two joined
    isoflavonoid ring structures
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Estrogen&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">female reproductive hormone
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;FDA&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the United States Food and Drug Administration
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Flavonoids&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">compounds based on an isoflavonoid ring structure
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><I><FONT size="2">&#147;in vitro&#148;</FONT></I></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">in the laboratory
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><I><FONT size="2">&#147;in vivo&#148;</FONT></I></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">in animals
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;IND&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Investigational New Drug
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Isoflavonoid ring
    structure&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">a chemical term referring to a simple phenolic
    ring structure
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Kinases&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">an enzyme catalyzing the transfer of phosphate
    groups to form triphosphates.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;MSTR&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Multiple Signal Transduction Regulator
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;NDA&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">New Drug Approval
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Oncology&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">branch of medicine concerned with the study of
    cancer
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Pharmacokinetic&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the behavior of a drug within the body, in
    particular the length of time it remains within the blood and
    the rate at which it is eliminated from the body
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Phase Ia&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the first trial of a new drug in humans usually
    undertaken to determine pharmcokinetics
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV>&nbsp;</DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"></TD>
    <TD width="1%"></TD>
    <TD width="71%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Phase Ib/IIa&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">a clinical study the primary objective of which
    is to measure safety and efficacy
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Phase II&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">usually an expanded Phase IIb study measuring
    safety and efficacy at different dosages
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Phase III&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">usually a multi-center study measuring efficacy
    in large numbers of patients
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Prostate cancer&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">cancer of the prostate gland
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Prostate smooth muscle
    cells&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the main type of stromal cells found in the
    prostate gland
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Prostate stromal cells&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the principal type of non-glandular cells found
    in the prostate gland
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Signal transduction
    mechanism&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">a series of chemical signals transmitted within
    cells that lead to the expression of a particular function by
    the cell
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Sphingosine Kinase&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">an enzyme believed to enable a cell&#146;s
    response to a number of important signals, including those
    related to cell survival and cell growth
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;STR&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">Signal Transduction Regulator
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    <B><FONT size="2">&#147;Structure function
    relationship&#148;</FONT></B></TD>
    <TD></TD>
    <TD valign="top">
    <FONT size="2">the relationship between a compound&#146;s
    particular chemical structure and its biological activity
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">A-2
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "INDEX TO CONSOLIDATED FINANCIAL STATEMENTS" -->
<DIV align="left"><A NAME="022"></A></DIV>

<P align="center">
<B><FONT size="2">INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<CENTER>
<TABLE width="60%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="93%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Report of Independent Auditors
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Balance Sheets as of June&nbsp;30,
    2003 and 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Operations for the
    years ended June&nbsp;30, 2003 and 2002, and the period from
    December&nbsp;1, 2000 (inception)&nbsp;through June&nbsp;30, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Shareholders&#146;
    Equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consolidated Statements of Cash Flows for the
    years ended June&nbsp;30, 2003 and 2002, and the period from
    December&nbsp;1, 2000 (inception)&nbsp;through June&nbsp;30, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Notes to Consolidated Financial Statements
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">F-7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">F-1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">REPORT OF INDEPENDENT AUDITORS</FONT></B>

<P align="left">
<FONT size="2">The Board of Directors
</FONT>

<DIV align="left">
<FONT size="2">Marshall Edwards, Inc.
</FONT>
</DIV>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We have audited the accompanying consolidated
balance sheets of Marshall Edwards, Inc. (a development stage
company) as of June&nbsp;30, 2003 and 2002, and the related
consolidated statements of operations, shareholders&#146;
equity, and cash flows for the years then ended and for the
period from December&nbsp;1, 2000 (inception)&nbsp;through
June&nbsp;30, 2003. These financial statements are the
responsibility of the Company&#146;s management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In our opinion, the financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Marshall Edwards, Inc. at
June&nbsp;30, 2003 and 2002, and the consolidated results of its
operations and its cash flows for the years then ended and the
period from December&nbsp;1, 2000 (inception)&nbsp;through
June&nbsp;30, 2003, in conformity with accounting principles
generally accepted in the United States.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">Ernst &#38; Young LLP
    </FONT></TD>
</TR>

</TABLE>

<P align="left">
<FONT size="2">Stamford, CT
</FONT>

<DIV align="left">
<FONT size="2">July 31, 2003
</FONT>
</DIV>

<P align="center"><FONT size="2">F-2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC</FONT></B>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">CONSOLIDATED BALANCE SHEETS</FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="72%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="11" align="center" valign="top">
    <B><FONT size="2">ASSETS</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current assets:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and other current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">42</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="11" align="center" valign="top">
    <B><FONT size="2">LIABILITIES AND SHAREHOLDERS&#146;
    EQUITY</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Current liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">433</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">198</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accrued expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">278</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Amounts due to parent company
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">642</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">88</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total current liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,353</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Shareholders&#146; equity:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Preferred stock, $0.01 par value, authorized
    100,000 shares, none outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock, $0.00000002 par value, 113,000,000
    authorized shares; 52,032,000 and 52,023,000 issued and
    outstanding shares in 2003 in 2002, respectively
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Additional paid-in capital
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deficit accumulated during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accumulated other comprehensive income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total shareholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total liabilities and shareholders&#146; equity
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes.
</FONT>

<P align="center"><FONT size="2">F-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC</FONT></B>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF
OPERATIONS</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="47%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period from</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December 1, 2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Inception)</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">through June 30,</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(In thousands, except share and per share data)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Revenues:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest and other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">152</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Operating expenses:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Research and development
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,024</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(69</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,093</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">License fees
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(500</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(500</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Selling, general and administrative
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(654</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(60</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(714</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total operating expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,178</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(129</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,307</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(122</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,155</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss arising during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss per common share:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Basic and diluted
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.058</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(0.002</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Weighted average common shares outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,023,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,769,581</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes.
</FONT>

<P align="center"><FONT size="2">F-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC.</FONT></B>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF SHAREHOLDERS&#146;
EQUITY</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="33%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Deficit</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Accumulated</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">During</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Other</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Common</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Additional</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Development</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Comprehensive</FONT></B></TD>
    <TD></TD>
    <TD colspan="3"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stock</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Paid-in Capital</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Stage</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Income</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3" align="center"><B><FONT size="1">(Shares)</FONT></B></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD colspan="2"></TD>
    <TD></TD>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at June&nbsp;30, 2001
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,500,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss arising during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock issued May&nbsp;22, 2002 (including
    2,523,000 warrants)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,523,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at June&nbsp;30, 2002
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,023,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,899</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss arising during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign currency translation adjustments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Comprehensive Loss
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,002</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Common stock issued, June&nbsp;26, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Balance at June&nbsp;30, 2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,032,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5,933</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes.
</FONT>

<P align="center"><FONT size="2">F-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC.</FONT></B>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">CONSOLIDATED STATEMENTS OF CASH
FLOWS</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="52%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="9%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Period from</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended June&nbsp;30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">December&nbsp;1, 2000</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(Inception) through</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June&nbsp;30, 2003</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11"></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD colspan="11" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Operating activities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss arising during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,156</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Adjustments to reconcile net loss to cash (used
    in) provided by operating activities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Changes in operating assets and liabilities:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepaid expenses and other current assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(21</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(42</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accounts payable and amounts due to parent company
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,067</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,353</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash (used in) provided by operating
    activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,987</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">142</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,845</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Financing activities:</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net proceeds from issuance of Common Stock
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net cash provided by financing activities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">36</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,022</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,058</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effect of exchange rate changes on cash and cash
    equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">31</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net (decrease) increase in cash and cash
    equivalents
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,920</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents at beginning of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Cash and cash equivalents at end of period
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,164</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,244</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income taxes paid
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="center">
<FONT size="2">See accompanying notes.
</FONT>

<P align="center"><FONT size="2">F-6
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC.</FONT></B>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS</FONT></B>

<DIV align="center">
<B><FONT size="2">June&nbsp;30, 2003</FONT></B>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">1.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Organization and Basis of Preparation of
    Financial Statements</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Marshall Edwards, Inc. (the &#147;Company&#148;
or &#147;MEI&#148;) is a development stage company incorporated
in December 2000 that commenced operations in May 2002
coinciding with its listing on the London Stock Exchange&#146;s
Alternative Investment Market (AIM). In connection with its
listing, 2,523,000 shares of Common Stock and 2,523,000
warrants, exercisable prior to November&nbsp;30, 2003 at an
exercise price of $4.00 per share (9,000 exercised on
June&nbsp;26, 2003), were issued in May 2002 at $4.00 per share.
Total proceeds of $9,022,000 were received net of $1,070,000 of
transaction costs. Following the listing, Novogen Limited, an
Australian pharmaceutical company listed on both the Australian
Stock Exchange and NASDAQ, retained 95.1% of the Company&#146;s
Common Stock. The costs of organizing MEI were paid by Novogen
and were minimal.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company, including its Australian subsidiary,
Marshall Edwards Pty. Limited (&#147;MEPL&#148;) (together, the
&#147;MEI Group&#148;) is a pharmaceutical company with a
primary focus on oncology drugs. The Company plans to develop
phenoxodiol for use in a wide range of human cancers. The
Company operates primarily in Australia and the United States.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen Limited and its subsidiary companies,
other than MEI Group (&#147;Novogen&#148;), has granted to the
MEI Group an exclusive license under its patent applications and
the intellectual property rights in the relevant know-how to
develop, market and distribute all forms of administering
phenoxodiol for anti-cancer uses except topical applications. In
addition, the MEI Group has the option of an exclusive first
right and an exclusive last right to match any proposal dealing
with third parties by Novogen Research Pty Ltd for the
intellectual property rights and development of other anti
cancer drugs in the agreed dose forms derived from the Novogen
library of compounds.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The MEI Group&#146;s initial business focus is to
continue the clinical program currently underway for the
development of phenoxodiol.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">2.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Accounting Policies</FONT></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Revenue Recognition</FONT></I></B></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <I><FONT size="2">Interest</FONT></I></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The only revenue earned to date is interest on
cash and cash equivalents.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Principles of Consolidation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The consolidated financial statements include the
accounts of Marshall Edwards, Inc. and its subsidiary, Marshall
Edwards Pty. Limited which is a wholly-owned Australian company.
Significant intercompany accounts and transactions have been
eliminated in consolidation.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Estimates</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The preparation of the consolidated financial
statements in conformity with accounting principles generally
accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in
the consolidated financial statements and the accompanying
notes. Actual results could differ from those estimates.
</FONT>

<P align="center"><FONT size="2">F-7
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Cash Equivalents</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company considers all highly liquid
investments with a maturity of three months or less when
purchased to be cash equivalents.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Income Taxes</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Income taxes have been provided for using the
liability method in accordance with FASB Statement No.&nbsp;109,
&#147;Accounting for Income Taxes.&#148; Under this method,
deferred tax assets and liabilities are recognized and measured
using enacted tax rates in effect for the year in which the
differences are expected to be recognized. Valuation allowances
are established against the recorded deferred income tax assets
to the extent that management believes that it is more likely
than not that a portion of the deferred income tax assets are
not realizable.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Fair Value of Financial
    Instruments</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The carrying amounts of the Company&#146;s
financial instruments, including cash and cash equivalents, and
accounts payable approximate fair value.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Foreign Currency Translation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The financial statements of MEPL have been
translated into U.S. dollars in accordance with FASB Statement
No.&nbsp;52, &#147;Foreign Currency Translation.&#148; Assets
and liabilities are translated into U.S. dollars using the
exchange rates in effect at the balance sheet date. Income
statement amounts have been translated using the average
exchange rate for the year. Accumulated other comprehensive loss
includes the cumulative translation adjustments. Realized gains
and losses from foreign currency transactions are reflected in
the consolidated statements of operations and were not
significant for all periods presented.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Research and Development
    Expenses</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Research and development expenses relate
primarily to the cost of conducting human clinical trails of
phenoxodiol. Research and development costs are charged to
expense as incurred.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Stock-Based Compensation</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s stock option plan provides for
the grant of options to employees of the Company and its
affiliates. To date no options have been granted under the plan.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Basic and Diluted Loss Per
    Share</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Basic and diluted earnings or loss per share is
calculated in accordance with FASB Statement No.&nbsp;128,
&#147;Earnings Per Share.&#148; In computing basic earnings or
loss per share, the dilutive effect of stock options and
warrants are excluded, whereas for diluted earnings per share
they are included unless the effect is anti-dilutive.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Comprehensive Loss</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Comprehensive loss is comprised of net loss and
other comprehensive loss. Other comprehensive loss includes
certain changes in shareholders&#146; equity that are excluded
from net loss is comprised of changes in foreign currency
translation adjustments. Comprehensive loss for all periods
presented has been reflected in the consolidated statement of
shareholders&#146; equity.
</FONT>

<P align="center"><FONT size="2">F-8
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I><FONT size="2">Recent Accounting
    Announcements</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Accounting pronouncements issued by the financial
accounting standards board or other authoritative accounting
standards groups with future effective dates are either not
applicable or not significant to our consolidated financial
statements.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">3.</FONT></B></TD>
    <TD>
    <B><FONT size="2">Income Taxes</FONT></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Loss from operations consists of the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="75%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended June 30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Domestic
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(186</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Foreign
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,847</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(103</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(122</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The reconciliation of income tax computed at the
U.S. federal statutory tax rate to income tax expense
attributable to loss arising during development stage is as
follows:
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="51%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="15" align="center" nowrap><B><FONT size="1">Year Ended June 30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">%</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Tax at U.S. statutory rates
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,062</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(43</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Australian tax
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Valuation allowance
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,062</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(35</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Deferred tax liabilities and assets are comprised
of the following:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="79%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">June&nbsp;30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Prepayments
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total deferred tax liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Consultant and other accruals
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">265</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Valuation allowance for deferred tax assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(265</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net deferred tax assets and liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Management evaluates the recoverability of the
deferred tax asset and the amount of the required valuation
allowance. Due to the uncertainty surrounding the realization of
the tax deductions in future tax returns, the Company has
recorded a valuation allowance against its net deferred tax
asset at June&nbsp;30, 2003 and 2002. At such time as it is
determined that it is more likely than not that the deferred tax
assets will be realized, the valuation allowance will be reduced.
</FONT>

<P align="center"><FONT size="2">F-9
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">There was no benefit from income taxes recorded
for the period from December&nbsp;1, 2000 (inception) to
June&nbsp;30, 2003 due to the Company&#146;s inability to
recognize the benefit of net operating losses. The Company had
federal net operating loss carryforwards of approximately
$205,000 and $14,000 at June&nbsp;30, 2003 and 2002,
respectively. The federal net operating losses will begin to
expire in 2022.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Foreign income tax losses of approximately
$2,039,000 and $103,000 at June&nbsp;30, 2003 and 2002,
respectively, may be carried forward indefinitely.
</FONT>

<P align="left">
<B><FONT size="2">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss Per
Share</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The following table sets forth the components for
the computation of basic and diluted net loss per common share:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="69%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Year Ended June 30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Numerator</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss arising during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effect of dilutive securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Numerator for diluted earnings per share
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <B><FONT size="2">Denominator</FONT></B></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Denominator for basic earnings per share &#151;
    weighted average common shares outstanding
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,023,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,769,581</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Effect of dilutive securities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Dilutive potential common shares
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">52,023,247</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">49,769,581</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Instruments</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The fair value of financial assets and
liabilities approximates their carrying value in the
Consolidated Balance Sheets because they are short term and at
market rates of interest.
</FONT>

<P align="left">
<B><FONT size="2">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Commitments
and Contingencies</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">At June&nbsp;30, 2003, the Company has contracted
to conduct research and development expenditures amounting to
approximately $1,249,000. Such amounts are expected to be
incurred within the next year.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company is not currently a party to any
material legal proceedings.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s certificate of incorporation
provides that it will indemnify Novogen in connection with
certain actions brought against Novogen by any of the
Company&#146;s stockholders or any other person.
</FONT>

<P align="center"><FONT size="2">F-10
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">
<B><FONT size="2">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Segment
Information</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The Company&#146;s focus is to continue the
clinical program currently underway for the development of
phenoxodiol.
</FONT>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="28%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="2%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
    <TD></TD>
    <TD colspan="7"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">USA</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Australia</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Eliminations</FONT></B></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><B><FONT size="1">Total</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="7" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">June 30,</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2003</FONT></B></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">2002</FONT></B></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="31"></TD>
</TR>

<TR>
    <TD></TD>
    <TD></TD>
    <TD colspan="31" align="center" nowrap><B><FONT size="1">(In thousands)</FONT></B></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Interest and other income
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total revenues
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">110</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">35</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">145</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Loss from operations
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(186</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(19</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(2,847</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(103</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(122</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Income tax expense
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Net loss arising during development stage
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(3,033</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(123</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Segment assets
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,896</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,188</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">374</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,981</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,984</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">(1,984</FONT></TD>
    <TD align="left" valign="bottom" nowrap><FONT size="2">)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">7,286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">9,185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Segment liabilities
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">43</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">185</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,310</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">101</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">&#151;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,353</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">286</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<B><FONT size="2">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related Party
Transactions</FONT></B>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;License
Agreement</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The license agreement is an agreement under which
Novogen grants to MEPL a worldwide non-transferable license to
conduct clinical trials and commercialize and distribute all
forms of phenoxodiol except topical applications. The agreement
covers uses of phenoxodiol in the field of prevention, treatment
or cure of cancer in humans. The license is exclusive until the
expiration of the last relevant Novogen patent right in the
world and thereafter is nonexclusive. The Company may terminate
the agreement with three months notice. Novogen may terminate
the agreement if a change of control, as defined in the license
agreement, occurs without the consent of Novogen. Amounts
payable to Novogen under terms of the license agreement is as
follows:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(1)&nbsp;A lump sum license fee of $5,000,000 is
    payable to Novogen on the later of November&nbsp;1, 2002 or on
    the date when the cumulative total of all funds received from
    debt or equity issuances and revenue received from
    commercialization (income other than sales) and sales of
    phenoxodiol products exceeds $25,000,000.
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(2)&nbsp;A lump sum license fee of $5,000,000 is
    payable to Novogen on the later of November&nbsp;1, 2003 or on
    the date when the cumulative total of all funds received from
    debt or equity issuances and revenue received from
    commercialization (income other than sales) and sales of
    phenoxodiol products exceeds $50,000,000.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the amounts above, the Company
must pay Novogen 2.5% of all net sales and 25% of
commercialization income. After the exclusivity period of the
license, 1.5% of net sales must be paid to Novogen.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The cumulative total of funds received by the
Company is $10,128,000.
</FONT>

<P align="center"><FONT size="2">F-11
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<B><FONT size="2">MARSHALL EDWARDS, INC.</FONT></B>
</DIV>

<DIV align="center">
<B><FONT size="2">(A Development Stage Company)</FONT></B>
</DIV>

<P align="center">
<B><FONT size="2">NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS&nbsp;&#151; (Continued)</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Amounts payable for annual license fees under the
license agreement for the calendar years ended December&nbsp;31
are as follows:
</FONT>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="84%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2003
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">1,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2004
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">2005
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">4,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Each calendar year thereafter
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">8,000,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Any amounts payable to Novogen under the above
annual payments will be reduced for amounts paid under the first
lump sum license fee referred to in&nbsp;(1) above. For the year
ended June&nbsp;30, 2003, $500,000 has been included as license
fee expense in the consolidated statements of operations.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Novogen developed phenoxodiol in part using funds
from the Australian government under what is known as the START
Program. In the event Novogen fails to comply with its
obligations under the agreement which governs this grant, or if
Novogen undergoes a change of control, the Australian government
has a right to demand that intellectual property created during
the course of the project funded by the grant be vested back in
the Australian government. The Australian government may then
license the intellectual property rights related to phenoxodiol
to other parties and may demand other intellectual property
rights from Novogen. Any such reclamation by the Australian
government could preclude the Company&#146;s use of
Novogen&#146;s intellectual property in the development and
commercialization of phenoxodiol and the Company may have to
compete with other companies to whom the Australian government
may license the intellectual property.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;License
Option Deed</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">The license option deed grants MEPL an exclusive
right to accept and an exclusive right to match any proposed
third-party dealing by Novogen of its intellectual property
rights in other synthetic compounds that have known or potential
anti-cancer applications in all forms other than topical
applications.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Services
Agreement</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Neither the Company nor MEPL currently intends to
directly employ any staff and Novogen will provide or procure
services reasonably required by the MEI Group relating to the
development and commercialization of phenoxodiol and for other
administrative and managerial support. Novogen will provide
these services at cost plus a 10% markup. Cost is based on
estimates regarding the percentage of time spent by Novogen
employees and consultants, a premises rental charge and a charge
for asset usage and general overhead. The Company may terminate
the agreement with three months notice. Novogen may terminate
the agreement under certain circumstances.
</FONT>

<P align="left">
<B><I><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Manufacturing,
License and Supply Agreement</FONT></I></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Under the terms of the Manufacturing License and
Supply Agreement, Novogen will supply phenoxodiol in its primary
manufactured form for the clinical trial development program and
phenoxodiol&#146;s ultimate commercial use. Novogen will supply
phenoxodiol at cost plus a 50% markup. The Company or Novogen
may terminate the agreement under certain circumstances.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Transactions amounting to $1,363,032 and $87,603
were made under the license agreement, the Services Agreement
and the Manufacturing, License and Supply Agreement with Novogen
during the years ended June&nbsp;30, 2003 and 2002, respectively.
</FONT>

<P align="center"><FONT size="2">F-12
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<P align="center">
<B><FONT size="4">2,000,000 Common Stock Units</FONT></B>

<P align="center">
<B><FONT size="6">Marshall Edwards, Inc.</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Through and
including &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(the
25th day after the date of the prospectus), all dealers that
buy, sell, or trade our common stock units, whether or not
participating in this offering, may be required to deliver a
prospectus. This delivery requirement is in addition to the
dealers&#146; obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">You should rely only on the information contained
in this prospectus. We have not authorized anyone to provide you
with information different from that contained in this
prospectus. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or of any distribution
of the common stock units.
</FONT>

<P align="center">
<B><FONT size="5">Janney Montgomery Scott
</FONT><FONT size="4">LLC</FONT></B>

<P align="center">
<FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2003
</FONT>

<P align="center">
<HR size="1" width="100%" align="center" noshade>

<DIV align="center">
<HR size="1" width="100%" align="center" noshade>
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">PART II</FONT></B>

<P align="center">
<B><FONT size="2">INFORMATION NOT REQUIRED IN
PROSPECTUS</FONT></B>

<P align="left">
<B><FONT size="2">Item&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other
Expenses of Issuance and Distribution.</I></FONT></B>

<CENTER>
<TABLE width="70%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="80%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">An estimate of expenses follows:
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Securities and Exchange Commission registration
    fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">2,660.81</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">NASD filing fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">3,789.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Nasdaq Small Cap Market listing fee
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">30,000.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Printing and engraving expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Transfer agent and registrar fees and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Legal fees and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Accountants&#146; fees and expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Blue Sky fees and expenses (including legal fees)
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Miscellaneous expenses
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

<TR valign="bottom" bgcolor="#EEEEEE">
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <DIV style="margin-left:10px; text-indent:-10px">
    <FONT size="2">Total
    </FONT></DIV>
    </TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="bottom"><FONT size="2">$</FONT></TD>
    <TD align="right" valign="bottom" nowrap><FONT size="2">704,000.00</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="2"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left"><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be filed by amendment.
    </FONT></TD>
</TR>

</TABLE>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Indemnification of Directors and
    Officers.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Our Certificate of Incorporation provides that we
will indemnify our directors and officers to the full extent
permitted by the DGCL. Section&nbsp;145 of the DGCL provides
that the extent to which a corporation may indemnify its
directors and officers depends on the nature of the action
giving rise to the indemnification right. In actions not on
behalf of the corporation, directors and officers may be
indemnified for acts taken in good faith and in a manner
reasonably believed to be in or not opposed to the best
interests of the corporation. In actions on behalf of the
corporation, directors and officers may be indemnified for acts
taken in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the corporation, except
for acts as to which the director or officer is adjudged liable
to the corporation, unless the relevant court determines that
indemnification is appropriate despite such liability.
Section&nbsp;145 also permits a corporation to
(i)&nbsp;reimburse present or former directors or officers for
their defense expenses to the extent they are successful on the
merits or otherwise and (ii)&nbsp;advance defense expenses upon
receipt of an undertaking to repay the corporation if it is
determined that payment of such expenses is unwarranted.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">To supplement the general indemnification right
contained in our Certificate of Incorporation, the By-Laws
provide for the specific indemnification rights permitted by
Section&nbsp;145 (as described above). The By-Laws also permit
us to purchase Directors and Officers insurance, but no director
or officer has a right to require this.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">In addition to the indemnification rights
described above, our Certificate of Incorporation eliminates any
monetary liability of directors to us or our shareholders for
breaches of fiduciary duty except for (i)&nbsp;breaches of the
duty of loyalty, (ii)&nbsp;acts or omissions in bad faith,
(iii)&nbsp;improper dividends or share redemptions and
(iv)&nbsp;transactions from which the director derives an
improper personal benefit.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Recent Sales of Unregistered
    Securities.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">On May&nbsp;22, 2002, we sold 2,523,000 shares of
our common stock for an aggregate of $10.1&nbsp;million. These
shares of common stock were listed on the London Stock
Exchange&#146;s Alternative Investment Market. These shares of
common stock each had an attaching warrant entitling the holder
to purchase one additional share of our common stock. These
warrants are exercisable prior to November&nbsp;30, 2003 and
have an exercise price of $4.00 per share. These securities were
offered and sold by us to a limited number
</FONT>

<P align="center"><FONT size="2">II-1
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV align="left">
<FONT size="2">of predominantly U.S. investors in private
placement transactions. These transactions were exempt from
registration pursuant to Section&nbsp;4(2) of the Securities Act
of 1933.
</FONT>
</DIV>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Exhibits and Financial Statement
    Schedules.</FONT></I></B></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">(a)&nbsp;</FONT></TD>
    <TD align="left">
    <I><FONT size="2">Exhibits.</FONT></I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="6%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="5%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="85%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Incorporation.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Bylaws.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.1</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Specimen Common Stock certificate.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4.2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Warrant Agreement.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Morgan, Lewis &#38; Bockius LLP.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated License Agreement between
    Novogen Research Pty Limited and Marshall Edwards Pty Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Manufacturing License and
    Supply Agreement between Novogen Laboratories Pty Limited and
    Marshall Edwards Pty Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated License Option Deed between
    Novogen Research Pty Limited and Marshall Edwards Pty Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Services Agreement among
    Novogen Limited, Marshall Edwards, Inc. and Marshall Edwards Pty
    Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee and Indemnity among Marshall Edwards,
    Inc., Novogen Laboratories Pty Limited, Novogen Research Pty
    Limited and Novogen Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Marshall Edwards, Inc. Share Option Plan.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of outstanding Warrant issued to Non-US
    Persons May 2002.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of outstanding Warrant issued to US Persons
    May 2002.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Subsidiaries of Marshall Edwards, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23.1</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Morgan, Lewis &#38; Bockius LLP
    (contained in Exhibit&nbsp;5).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Ernst &#38; Young LLP.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney (included on signature page).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99.1</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form letter from Marshall Edwards, Inc. to
    eligible holders of its common stock, ordinary shares and
    American Depositary Shares of Novogen Limited describing the
    Directed Share Subscription Program.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99.2</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of letter from Janney Montgomery Scott LLC
    to eligible holders.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99.3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of brokers letter.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99.4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of subscription agreement.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be filed by amendment.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(b)&nbsp;<I>Financial Statement Schedules.</I>
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">All financial statement schedules have been
omitted because either they are not required, are not
applicable, or the information is otherwise set forth in the
financial statements and notes thereto.
</FONT>

<DIV>&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B><FONT size="2">Item&nbsp;17.</FONT></B></TD>
    <TD>
    <B><I><FONT size="2">Undertakings.</FONT></I></B></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(1)&nbsp;The undersigned registrant hereby
undertakes:
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(i)&nbsp;To file, during any period in which
    offers or sales are being made, a post-effective amendment to
    this registration statement:
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(a)&nbsp;To include any prospectus required by
    Section&nbsp;10(a)(3) of the Securities Act of 1933;
    </FONT></TD>
</TR>

</TABLE>

<P align="center"><FONT size="2">II-2
</FONT>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(b)&nbsp;To reflect in the prospectus any facts
    or events arising after the effective date of the registration
    statement (or the most recent post-effective amendment thereof)
    which, individually or in the aggregate, represent a fundamental
    change in the information set forth in the registration
    statement. Notwithstanding the foregoing, any increase or
    decrease in volume of securities offered (if the total dollar
    value of securities offered would not exceed that which was
    registered) and any deviation from the low or high end of the
    estimated maximum offering range may be reflected in the form of
    prospectus filed with the Commission pursuant to
    Rule&nbsp;424(b) if, in the aggregate, the changes in volume and
    price represent no more than a 20&nbsp;percent change in the
    maximum aggregate offering price set forth in the
    &#147;Calculation of Registration Fee&#148; table in the
    effective registration statement;
    </FONT></TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(c)&nbsp;To include any material information with
    respect to the plan of distribution not previously disclosed in
    the registration statement or any material change to such
    information in the registration statement.
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    <FONT size="2">(ii)&nbsp;To provide to the underwriters at the
    closing specified in the Underwriting Agreement share and
    warrant certificates in such denominations and registered in
    such names as required by the underwriters to permit prompt
    delivery to each purchaser.
    </FONT></TD>
</TR>

</TABLE>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(2)&nbsp;Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under
Item&nbsp;14 above, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(3)&nbsp;For purposes of determining any
liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this registration
statement in reliance on Rule&nbsp;430A and contained in a form
of prospectus filed by the registrant pursuant to
Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it is first declared effective.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">(4)&nbsp;For the purpose of determining any
liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial <I>bona fide </I>offering
thereof.
</FONT>

<P align="center"><FONT size="2">II-3
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="023"></A></DIV>

<P align="center">
<B><FONT size="2">SIGNATURES</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Sydney, Australia on
September&nbsp;25, 2003.
</FONT>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">MARSHALL EDWARDS, INC.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT size="2">(Registrant)
    </FONT></TD>
</TR>

</TABLE>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD><FONT size="2">By:&nbsp;</FONT></TD>
    <TD align="center">
    <FONT size="2">/s/ CHRISTOPHER NAUGHTON
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <HR size="1" align="left" noshade></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <FONT size="2">Christopher Naughton
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="center">
    <I><FONT size="2">President and Chief Executive
    Officer</FONT></I></TD>
</TR>

</TABLE>

<P align="center">
<B><FONT size="2">POWER OF ATTORNEY</FONT></B>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Each person whose signature appears below hereby
constitutes and appoints Christopher Naughton and David&nbsp;R.
Seaton, and each of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution
and resubstitution for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments or
supplements to this registration statement, whether
pre-effective or post-effective, and to file the same with all
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
necessary or appropriate to be done with respect to this
registration statement or any amendments or supplements hereto
in the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
</FONT>

<P align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT size="2">Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed below
by the following persons, in the capacities and on the dates
indicated.
</FONT>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ CHRISTOPHER NAUGHTON<BR>
    <HR size="1" noshade>Christopher Naughton
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">President and Chief Executive Officer, Director
    (Principal Executive Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">September&nbsp;25, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ DAVID R. SEATON<BR>
    <HR size="1" noshade>David R. Seaton
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chief Financial Officer and Secretary (Principal
    Financial Officer and Principal Accounting Officer)
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">September&nbsp;25, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ DR. GRAHAM E. KELLY<BR>
    <HR size="1" noshade>Dr. Graham E. Kelly
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Chairman
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">September&nbsp;25, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ PHILIP A. JOHNSTON<BR>
    <HR size="1" noshade>Philip A. Johnston
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">September&nbsp;25, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ DAVID MORRITZ DE KRETSER<BR>
    <HR size="1" noshade>David Morritz de Kretser
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">September&nbsp;25, 2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-4
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<CENTER>
<TABLE width="90%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="31%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="37%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="16%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3"></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Signature</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Title</FONT></B></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Date</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ PAUL J. NESTEL<BR>
    <HR size="1" noshade>Paul J. Nestel
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">September&nbsp;25, 2003
    </FONT></TD>
</TR>

<TR>
    <TD colspan="7"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    <FONT size="2">/s/ STEPHEN BRECKENRIDGE<BR>
    <HR size="1" noshade>Stephen Breckenridge
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">Director
    </FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top">
    <FONT size="2">September&nbsp;25, 2003
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="center"><FONT size="2">II-5
</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center">
<B><FONT size="2">INDEX TO EXHIBITS</FONT></B>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0">

<TR>
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="7%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="4%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="74%"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><B><FONT size="1">Number</FONT></B></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><B><FONT size="1">Exhibit</FONT></B></TD>
</TR>

<TR>
    <TD colspan="3" align="center" nowrap><HR size="1" noshade></TD>
    <TD></TD>
    <TD></TD>
    <TD></TD>
    <TD align="center" nowrap><HR size="1" noshade></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Certificate of Incorporation.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">3</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Bylaws.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Specimen Common Stock certificate.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">4</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Warrant Agreement.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">5</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Opinion of Morgan, Lewis &#38; Bockius LLP.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated License Agreement between
    Novogen Research Pty Limited and Marshall Edwards Pty Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Manufacturing License and
    Supply Agreement between Novogen Laboratories Pty Limited and
    Marshall Edwards Pty Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated License Option Deed between
    Novogen Research Pty Limited and Marshall Edwards Pty Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Amended and Restated Services Agreement among
    Novogen Limited, Marshall Edwards, Inc. and Marshall Edwards Pty
    Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Guarantee and Indemnity among Marshall Edwards,
    Inc., Novogen Laboratories Pty Limited, Novogen Research Pty
    Limited and Novogen Limited.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Marshall Edwards, Inc. Share Option Plan.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of outstanding Warrant issued to Non-US
    Persons May 2002.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">10</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.8</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of outstanding Warrant issued to US Persons
    May 2002.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Subsidiaries of Marshall Edwards, Inc.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Morgan, Lewis &#38; Bockius LLP
    (contained in Exhibit&nbsp;5).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">23</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Consent of Ernst &#38; Young LLP.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Power of Attorney (included on signature page).
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.1*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form letter from Marshall Edwards, Inc. to
    eligible holders of its common stock, ordinary shares and
    American Depositary Shares of Novogen Limited describing the
    Directed Share Subscription Program.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.2*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of letter from Janney Montgomery Scott LLC
    to eligible holders.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.3*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of brokers letter.
    </FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right" valign="top" nowrap><FONT size="2">99</FONT></TD>
    <TD align="left" valign="top" nowrap><FONT size="2">.4*</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top">
    <FONT size="2">Form of subscription agreement.
    </FONT></TD>
</TR>

</TABLE>
</CENTER>

<P align="left">
<HR size="1" width="18%" align="left" noshade>
<P>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD><FONT size="2">*&nbsp;</FONT></TD>
    <TD align="left">
    <FONT size="2">To be filed by amendment.
    </FONT></TD>
</TR>

</TABLE>
</BODY>
</HTML>
[{"type": "S-1", "sequence": "1", "filename": "y90124sv1.htm", "description": "FORM S-1", "secsgml_size_bytes": 605765}]
{"company-data": {"conformed-name": "MARSHALL EDWARDS INC", "cik": "0001262104", "irs-number": "510407811", "state-of-incorporation": "DE"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-109129", "film-number": "03910702"}, "business-address": {"street1": "140 WICKS RD.", "city": "NORTH RYDE", "state": "C3", "zip": "NSW 2113"}}
FORM S-1
Table of Contents
As filed with the Securities and Exchange
Commission on September 25, 2003
Registration
No. 333-
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
Form S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Marshall Edwards, Inc.
(Exact name of registrant as specified in its
charter)
Delaware
(State or other jurisdiction of incorporation
or organization)
2834
(Primary Standard Industrial Classification
Code Number)
51-0407811
(I.R.S. employer Identification
Number)
Marshall Edwards, Inc.
140 Wicks Road
North Ryde NSW 2113
Australia
(011) 61 2 8877 6196
(Address, including zip code, and telephone
number,
including area code, of registrant's
principal executive offices)
The Corporation Trust Company
The Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
(302) 658-7581
(Name, address, including zip code, and
telephone number,
including area code, of agent for
service)
With copies to:
David R. Seaton
Secretary
Marshall Edwards, Inc.
140 Wicks Road
North Ryde NSW 2113
Australia
(011) 61 2 8877 6196
Steven A. Navarro, Esq.
Stephanie M. Gulkin, Esq.
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
(212) 309-6000
Robert B. Murphy, Esq.
Raymond A. Miller, Esq.
Pepper Hamilton LLP
Hamilton Square
600 Fourteenth Street, N.W.
Washington, D.C. 20005-2004
(202) 220-1200
Approximate date of
commencement of proposed sale to the public:
As soon as
practicable after this Registration Statement is declared
effective.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant
to Rule 415 under the Securities Act of 1933, check the
following
box:
x
If this Form is filed to register additional
securities for an offering pursuant to Rule 462(b) under
the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier
effective registration statement for the same
offering.
o
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
o
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the
same
offering.
o
If delivery of the prospectus is expected to be
made pursuant to Rule 434, please check the following
box.
o
CALCULATION OF REGISTRATION FEE
Proposed Maximum
Proposed Maximum
Amount of
Title of Each Class of
Amount
Offering Price
Aggregate
Registration
Securities to be Registered
to be Registered
Per Unit
Offering Price
Fee
Common stock units consisting of common stock and
    warrants
2,300,000 units(1)
$6.50(2)(3)
$14,950,000
$1209.46
Common stock, par value $.00000002 per share,
    underlying units
2,300,000 shares(1)
$ —
$ —
$ —
Warrants underlying units
2,300,000 warrants(1)
$ —
$ —
$ —
Common stock, par value $.00000002 per share,
    underlying warrants
2,300,000 shares(1)(4)
$7.80(2)
$17,940,000
$1451.35
Totals
$32,890,000
$2660.81
(1)
Includes the overallotment option granted to the
    underwriter of 300,000 common stock units consisting of 300,000
    shares and 300,000 warrants.
(2)
Estimated solely for the purpose of calculating
    the amount of the registration fee pursuant to Rule 457(a)
    under the Securities Act of 1933, as amended.
(3)
The proposed price of $6.50 per common stock
    unit reflects the price of the common stock and warrants.
(4)
Pursuant to Rule 416 of the Securities Act
    this registration statement also covers such additional number
    of shares of common stock that may become issuable under any
    stock split, stock dividend or similar transaction.
The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act or until the
Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section 8(a), may
determine.
Table of Contents
The information contained in
this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and we are
not soliciting an offer to buy these securities in Australia or
in any state or other jurisdiction where the offer or sale is
not permitted.
SUBJECT TO COMPLETION, DATED
SEPTEMBER 25, 2003
PROSPECTUS
Marshall Edwards, Inc.
2,000,000 Common Stock Units
This
is our initial public offering in the United States. This
prospectus covers the sale of up to an aggregate of 2,000,000
common stock units. Each common stock unit consists of:
•
one share of our common stock; and
•
one warrant to purchase a share of our common
    stock at an exercise price equal to 120% of the initial public
    offering price.
The
estimated initial public offering price for the common stock
units is between $4.50 and $6.50 per unit.
As
part of this offering, we are offering up to an aggregate of
1,500,000 common stock units at the initial public offering
price to U.S. holders of ordinary shares and American Depositary
Receipts of Novogen Limited, our parent company, that owned
their shares as of the close of business
on                   ,
2003, and to our U.S. stockholders, excluding Novogen, that
owned their shares as of the close of business
on                   ,
2003. See the section entitled "Plan of
Distribution — Directed Share Subscription
Program."
Upon
completion of this offering, Novogen will own approximately
91.6% of our outstanding common stock.
We
have applied to list our common stock on The Nasdaq SmallCap
Market under the symbol "
MSHL
." Our common
stock is listed on the Alternative Investment Market of the
London Stock Exchange plc under the symbol "MSH." We
will apply to list the shares of common stock being offered
hereby on the Alternative Investment Market. The last reported
sale price
on                   ,
2003 was £      per share, or
approximately
$         per share
based on the noon buying rate for sterling of £1.00 =
$              on                   ,
2003.
The
shares of common stock and warrants comprising the units will
separate immediately upon completion of this offering. The
warrants will not be listed on any national securities exchange,
automated quotation system or on the Alternative Investment
Market.
Investment
in the common stock units involves a high degree of risk. See
"Risk Factors" beginning on page 6.
Underwritten Public Offering
Underwriting Discounts
Proceeds to
Public Offering Price
and Commissions
Marshall Edwards, Inc.
Per Common Stock Unit
$
$
$
Total
$
$
$
Directed Share Subscription Program
Proceeds to
Public Offering Price
Management Fee
Marshall Edwards, Inc.
Per Common Stock Unit
$
$
$
Total
$
$
$
Aggregate Offering Proceeds
$
We
have granted the underwriter an option to purchase up to an
additional 300,000 common stock units at the public offering
price, solely to cover over-allotments.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
Janney Montgomery Scott
LLC
The date of this prospectus
is                     ,
2003.
TABLE OF CONTENTS
PROSPECTUS SUMMARY
RISK FACTORS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
DETERMINATION OF OFFERING PRICE
PRICE RANGE OF OUR COMMON STOCK
DIVIDEND POLICY
CAPITALIZATION
DILUTION
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
MANAGEMENT
BENEFICIAL OWNERSHIP OF COMMON STOCK
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DESCRIPTION OF OUR SECURITIES
SHARES ELIGIBLE FOR FUTURE SALE
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
AVAILABLE INFORMATION
ANNEX A
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
SIGNATURES
CERTIFICATE OF INCORPORATION
BYLAWS
AMENDED AND RESTATED LICENSE AGREEMENT
AMEND. & RESTATED MANUFACTURING LICENSE/SUPPLY AGR
AMENDED AND RESTATED LICENSE OPTION DEED
AMENDED AND RESTATED SERICES AGREEMENT
GUARANTEE AND INDEMNITY
MARSHALL EDWARDS INC. SHARE OPTION PLAN
FORM OF OUTSTANDING WARRANT
FORM OF OUTSTANDING WARRANT
SUBSIDIARIES OF MARSHALL EDWARDS, INC.
CONSENT OF ERNST & YOUNG LLP
Table of Contents
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY
1
RISK FACTORS
6
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
15
USE OF PROCEEDS
16
DETERMINATION OF OFFERING PRICE
17
PRICE RANGE OF OUR COMMON STOCK
17
DIVIDEND POLICY
17
CAPITALIZATION
18
DILUTION
19
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
20
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS
21
BUSINESS
24
MANAGEMENT
38
BENEFICIAL OWNERSHIP OF COMMON STOCK
42
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
43
DESCRIPTION OF OUR SECURITIES
49
SHARES ELIGIBLE FOR FUTURE SALE
53
PLAN OF DISTRIBUTION
54
LEGAL MATTERS
56
EXPERTS
56
AVAILABLE INFORMATION
56
ANNEX A — GLOSSARY OF TERMS
A-1
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
F-1
No document in connection with this offering,
including this prospectus, may be issued or passed on in the
United Kingdom to, or is directed at, any person, other than:
(i) to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses and
otherwise in circumstances which will not result in an offer to
the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995 (as amended) and in
circumstances where Section 21(1) of the Financial Services
and Markets Act 2000 does not apply by virtue of such person
being an investment professional as that term is defined in
Article 19 of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2001; or (ii) to persons to
whom the document may otherwise lawfully be issued. Nothing in
this prospectus should be construed as investment advice to any
person. If you are a recipient of this prospectus outside of the
scope of the above criteria then you may not act upon the
content of this prospectus.
We are not making this offering described in
this prospectus in Australia or in any state or other
jurisdiction in which it is unlawful to do so nor are we selling
or accepting any offers to purchase any shares of our common
stock from persons who are residents of such
jurisdictions.
Table of Contents
PROSPECTUS SUMMARY
This summary highlights selected information
contained elsewhere in this prospectus. You should read the
entire prospectus carefully, including the Risk Factors section
beginning on page 6 and our consolidated financial
statements and related notes beginning on page F-1 before making
an investment decision.
References to "we," "us,"
or "our" refer to Marshall Edwards, Inc. and its
consolidated subsidiary. References to "Novogen" refer
to Novogen Limited and its consolidated subsidiaries, other than
Marshall Edwards, Inc. and its subsidiary, Marshall Edwards Pty
Limited. Unless specifically stated otherwise, the information
in this prospectus assumes no exercise of the underwriter's
over-allotment option. We have attached as Annex A a glossary of
technical and scientific terms that we use in this
prospectus.
Our Company
We are a developmental stage pharmaceutical
company involved in the development and commercialization of
drugs for the treatment of cancer. We are presently engaged in
the clinical development of a drug candidate called phenoxodiol
that we believe may have broad application against a wide range
of cancers. Phenoxodiol appears to target a number of key
components involved in cancer cell survival and proliferation
based on the emerging field of signal transduction regulation,
with little or no effect on normal cells.
Our strategy is to undertake further clinical
development and testing of phenoxodiol leading ultimately to its
commercialization and wide scale distribution. Pre-clinical
testing has shown phenoxodiol to have broad anti-cancer action
against an extensive library of human cancer cell lines,
including prostate, ovarian and squamous cell carcinoma, or SCC.
Phenoxodiol commenced Phase I clinical studies in Australia in
2000 and currently is undergoing Phase Ib/IIa and Phase II
studies in intravenous dosage form in the United States and
Australia. In January 2001, the U.S. Food and Drug
Administration (the FDA) granted Investigational New Drug
(IND) status for phenoxodiol in the intravenous dosage
form, and in June 2003 the FDA granted IND status for
phenoxodiol in the oral dosage form.
We were incorporated in December 2000 as a
wholly-owned subsidiary of Novogen Limited, an Australian
registered company, and commenced operations in May 2002.
Novogen's ordinary shares trade on the Australian Stock
Exchange under the symbol "NRT" and American
Depositary Receipts (ADRs) trade in the United States under the
symbol "NVGN" on the Nasdaq National Market. In May
2002, we sold 2,523,000 shares of our common stock and warrants
to purchase an equal number of shares in a private placement
raising $10.1 million in gross proceeds. These shares are
admitted for trading on the Alternative Investment Market of the
London Stock Exchange under the symbol "MSH." Novogen
currently controls approximately 95% of our outstanding common
stock.
A subsidiary of Novogen has granted to us,
through our Australian subsidiary, Marshall Edwards Pty Limited,
an exclusive non-transferable license under its patent rights
and intellectual property rights in its relevant know-how to
develop, market and distribute all forms of administering
phenoxodiol for anti-cancer uses, except topical applications.
Our exclusive rights under our amended and restated license
agreement continue until the date of expiration or lapsing of
Novogen's last to expire patent right covering phenoxodiol
as an anti-cancer agent. In addition, we have the exclusive
first right to accept and an exclusive last right to match any
proposed dealing by Novogen in its intellectual property rights
with third parties for the development of other anti-cancer
drugs derived from its library of compounds, other than for
topical applications.
Phenoxodiol has been identified as a potential
putative metabolite of daidzein, a naturally occurring
isoflavone. Phenoxodiol does not appear, however, to have been
isolated or identified in mammals. Novogen scientists first
synthesized phenoxodiol as part of a program of drug discovery
based on an isoflavonoid ring chemical structure. Novogen is a
leader in the discovery and development of new drugs based on
signal transduction regulation, which it believes offers
potential for effective, well-tolerated treatment of common
degenerative diseases including cancer.
1
Table of Contents
Market Opportunity
The primary focus in the development of
phenoxodiol is currently in connection with ovarian cancer, SCC
of the cervix, vagina, vulva and skin, and prostate cancer,
although we believe that, subject to further successful clinical
research and development, phenoxodiol may have potential uses in
other forms of human cancers. The cancers for which phenoxodiol
is intended to be used are relatively common and we believe, in
general, poorly managed with current therapeutics. The American
Cancer Society (the ACS) has estimated that in 2003 there will
be 220,900 new cases of prostate cancer and 28,900 people will
die as a result of this cancer in the United States. The ACS has
also estimated that in 2003 there will be 25,400 new cases of
ovarian cancer diagnosed and 14,300 will die as a result of this
cancer in the United States. For SCC of the cervix, vagina and
vulva, the ACS estimates that in the year 2003, there will be
18,600 new cases diagnosed and that there will be 5,700 deaths
caused by these cancers in the United States. The ACS estimates
that 2,200 deaths will occur in the United States as a result of
cutaneous SCC.
Recent Developments
The oral form of phenoxodiol was granted IND
status by the FDA in June 2003. This action will permit the
commencement of a study in collaboration with Yale University
School of Medicine in patients with cancer of the cervix, vulva
and vagina where phenoxodiol will be used in patients on a
monotherapy basis daily for periods of up to four weeks prior to
surgery or radiotherapy.
A Phase II study at Yale University School of
Medicine commenced in October 2002 of the intravenous dosage
form of phenoxodiol in women with ovarian cancer. The clinical
trial is based on laboratory studies at Yale University that
showed phenoxodiol to be effective at killing ovarian cancer
cells, including those resistant to all standard anti-cancer
drugs. The study is fully enrolled using 40 patients with
advanced, metastatic ovarian cancer that has become unresponsive
to at least two standard chemotherapies.
Our Address and Telephone Number
Our principal executive office is located at 140
Wicks Road, North Ryde NSW 2113, Australia, and our telephone
number is 011-61-2-8877-6196. Our Internet web site address is
http://www.marshalledwardsinc.com. The information contained on
our web site shall not be deemed to constitute a part of this
prospectus.
2
Table of Contents
This Offering
Securities Offered
2,000,000 common stock units, each unit
    consisting of one share of common stock and one warrant to
    purchase a share of our common stock
Offering Price
$          per
    common stock unit
Warrant Terms
Each warrant is exercisable for the purchase of
    one share of our common stock at an exercise price of
    $          per
    share. The warrants are immediately exercisable and expire three
    years from their date of issuance.
Plan of Distribution:
Directed Share Subscription Program
Up to 1,500,000 common stock units will be
    offered by subscription to U.S. holders of our common stock
    as
    of                     ,
    2003, except Novogen, and to U.S. holders of Novogen's
    ordinary shares and ADRs as
    of                     ,
    2003. Janney Montgomery Scott LLC will act as our dealer manager
    in connection with our directed share subscription program.
Underwritten Offering
500,000 common stock units will be sold on a firm
    commitment basis by Janney Montgomery Scott LLC, as underwriter,
    along with any units not purchased in the directed share
    subscription program.
Shares Outstanding After
this Offering
54,032,000 shares, not including the 2,000,000
    shares of common stock underlying the warrants offered hereby
    and 2,514,000 shares issuable under previously issued warrants.
Use of Proceeds
Approximately $1.1 million will be used to
    commence Phase II clinical trials of phenoxodiol as a
    monotherapy in earlier stage cancers, and approximately
    $4.2 million will be used to commence Phase II
    clinical trials of phenoxodiol in combinational therapy with
    other anti-cancer drugs for late stage chemo-resistant tumors.
    Actual amounts spent on these planned clinical trials may change
    subject to satisfactory results of ongoing clinical trials. The
    balance will be used for other corporate purposes, including
    potential payments to Novogen under the terms of the license
    agreement, and further clinical trials pending success of the
    current clinical programs.
Proposed Nasdaq Symbol
MSHL
Listing on AIM
Our common stock is listed on the Alternative
    Investment Market of the London Stock Exchange (the AIM) under
    the symbol "MSH". We will apply to list the shares of
    common stock being offered hereby on the AIM. The AIM is the
    London Stock Exchange's global market for smaller growing
    companies.
Risk Factors
Investment in our securities involves a high
    degree of risk and could result in a loss of your entire
    investment. See "Risk Factors" beginning on
    page 6 to read about factors you should consider before
    buying our common stock units.
3
Table of Contents
Information Agent
Innisfree M&A Incorporated will act as our
information agent to respond to any questions that our eligible
stockholders and eligible holders of ordinary shares and ADRs of
Novogen may have regarding the process for exercising
subscription rights in connection with the directed share
subscription component of this offering. Any questions or
requests for assistance concerning the method of subscribing for
common stock units or for additional copies of this prospectus
can be directed to the information agent at (877) 456-3510.
The Information Agent for this Offering
is:
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Call Toll-Free: (877) 456-3510
4
Table of Contents
Summary Historical Consolidated Financial
Data
We are a development stage company. The following
table sets forth our summary historical consolidated financial
data derived from our audited consolidated financial statements
as of June 30, 2003 and 2002, included in this prospectus.
These financial statements have been audited by Ernst &
Young LLP, independent auditors. The summary financial
information should be read in conjunction with
"Management's Discussion and Analysis of Financial
Condition and Results of Operations," "Risk
Factors" and the consolidated financial statements and the
notes thereto included elsewhere in this prospectus.
Period from
December 1, 2000
Year Ended June 30,
through June 30,
2003
2002
2003
(in thousands, except share and per share data)
Statement of Operations Data:
Interest and other income
$
145
$
7
$
152
Net loss arising during development stage
$
(3,033
)
$
(123
)
$
(3,156
)
Net loss per common share.
$
(0.058
)
$
(0.002
)
Weighted average shares used to calculate loss
    per share
52,023,247
49,769,581
Common stock outstanding at year end
52,032,000
52,023,000
June 30,
2003
2002
(in thousands)
Balance Sheet Data:
Cash and cash equivalents
$
7,244
$
9,164
Total assets
7,286
9,185
Shareholders' equity
5,933
8,899
5
Table of Contents
RISK FACTORS
Investors should carefully consider the
following risks, as well as the other information contained in
this prospectus before investing in our common stock units. If
any of the following risks actually materializes, our business
could be harmed, the price of our shares of common stock could
decline and investors might lose all or part of their
investment.
Risks Related to Our Business
We have a limited operating history and we
    are likely to incur operating losses for the foreseeable
    future.
Investors should consider our prospects in light
of the risks and difficulties frequently encountered by early
stage and developmental companies. Although we were incorporated
in December 2000, we have only been in operation since May 2002.
We have incurred net losses since our inception, including net
losses of $3,033,000 and $123,000 for the years ended
June 30, 2003 and 2002, respectively. We anticipate that we
will incur operating losses and negative cash flow for the
foreseeable future. We have not yet commercialized any products
and cannot be sure that we will ever be able to do so, or that
we may ever become profitable. We expect to expand our clinical
trials significantly, which will result in increasing losses,
and may continue to incur substantial losses even if we begin to
generate revenues from the distribution and sale of phenoxodiol.
If we are unable to successfully develop
    and commercialize phenoxodiol or license other viable drug
    candidates, our ability to sustain future operations will be
    significantly diminished.
We are currently developing only one drug,
phenoxodiol. We cannot guarantee that phenoxodiol will be
successful. Although we have rights to potentially develop other
related compounds discovered and developed by Novogen under the
terms of our license option deed with Novogen, our rights under
the license agreement are limited to the commercialization of
phenoxodiol as an anti-cancer agent and these rights
specifically exclude phenoxodiol in a topical application. If we
are unable to develop successfully and commercialize phenoxodiol
or other viable drug candidates, we may be required to cease or
reduce our operations.
If we do not receive regulatory approval
    for phenoxodiol or such approval is withdrawn, we will not be
    able to commercialize phenoxodiol.
We need regulatory approval in order to
commercialize phenoxodiol. We may never receive regulatory
approval or if we do receive regulatory approval, it may be
limited to those disease states and conditions for which
phenoxodiol has proven to be safe and effective. Phenoxodiol is
currently in Phase II clinical trials in intravenous dosage
form to treat late stage ovarian cancer. Phenoxodiol has
received IND status in the United States for the oral dosage
form. The oral dosage form is also in clinical trials in
Australia to treat prostate cancer and SCC. Product approval, if
granted, can be withdrawn for failure to comply with regulatory
requirements or upon the occurrence of adverse events following
commercial introduction. In addition, our ability to market
phenoxodiol in overseas countries is contingent upon receiving
the required regulatory approvals in those countries. If we
cannot commercialize phenoxodiol, we may be required to cease or
reduce our operations.
Our ability to achieve profitability is
    dependent on a number of factors, some of which are beyond our
    control.
Our ability to achieve profitability is dependent
on a number of factors, including the ability to successfully
complete clinical development efforts, to obtain regulatory
approval for phenoxodiol and to successfully commercialize
phenoxodiol. We will rely on Novogen to supply phenoxodiol and
to provide services to us, including research and development
activities, manufacturing and all of our personnel. The amended
and restated license agreement, services agreement and
manufacturing license and supply agreement with Novogen all
provide that the supply of phenoxodiol and the provision of
services will be on a "cost plus mark up" basis. We
have no direct control over the costs of manufacturing
phenoxodiol or of the
6
Table of Contents
provision of these services and profitability
could be affected if these costs change significantly. See
"Certain Relationships and Related Transactions" for
more information about our agreements with Novogen.
Final approval by regulatory authorities of
    phenoxodiol for commercial use may be delayed, limited or
    prevented, any of which would adversely affect our ability to
    generate operating revenues.
Any of the following factors may serve to delay,
limit or prevent the final approval by regulatory authorities of
phenoxodiol for commercial use:
•
phenoxodiol is in the early stages of clinical
    development and we will need to conduct significant clinical
    testing to prove safety and efficacy before applications for
    marketing can be filed with the FDA, or with the regulatory
    authorities of other countries, to approve phenoxodiol for final
    use;
•
data obtained from pre-clinical and clinical
    tests can be interpreted in different ways, which could delay,
    limit or prevent regulatory approval;
•
it may take us many years to complete the testing
    of phenoxodiol or any other drug candidates, and failure can
    occur at any stage of this process;
•
negative or inconclusive results or adverse
    medical events during a clinical trial could cause us to delay
    or terminate our development efforts;
•
there is relatively limited scientific
    understanding of the means by which cells respond to chemical
    signals that reach them through the bloodstream, which we refer
    to as multiple signal transduction regulation or MSTR, the class
    of drug compounds to which phenoxodiol belongs; and
•
the commercialization of phenoxodiol may be
    delayed if the FDA or another regulatory authority requires us
    to expand the size and/or scope of the clinical trials.
We may not be able to establish the
    strategic partnerships necessary to market and distribute
    phenoxodiol.
A key part of our business plan is to establish
relationships with strategic partners. We must successfully
contract with third parties to package, market and distribute
phenoxodiol. There is no assurance that we will be able to
negotiate commercially acceptable licensing or other agreements
for the future exploitation of phenoxodiol, including the
continued clinical development, manufacture or marketing of
phenoxodiol. If we are unable to successfully contract for these
services, or if arrangements for these services are terminated,
we may have to delay our commercialization program for
phenoxodiol, which will adversely affect our ability to generate
operating revenues.
We may not be able to secure and maintain
    suitable research institutions to conduct our clinical
    trials.
We rely on hospitals and cancer clinics to
conduct our clinical trials. If we are unable to retain suitable
research institutions on acceptable terms, or if any resulting
agreement is terminated and we are unable to quickly replace the
applicable research institution with another qualified
institution, the research could be delayed and we may be unable
to complete development of, or commercialize, phenoxodiol, which
will adversely affect our ability to generate operating revenues.
Any failure in our clinical trials could
    impair the commercial prospects for phenoxodiol.
Clinical trials have a high risk of failure. A
number of companies in the pharmaceutical industry, including
biotechnology companies, have suffered significant setbacks in
advanced clinical trials, even after achieving promising results
in earlier trials. If we experience delays in the testing or
approval process or need to perform more or larger clinical
trials than originally planned, our commercial prospects for
phenoxodiol or any other drug candidates may be impaired and we
may be required to cease or reduce our operations.
7
Table of Contents
We may need to raise additional funds to
    cover our operating expenses due to a number of factors, some of
    which are beyond our control.
Based on our current plans, we believe that the
net proceeds of this offering will provide sufficient funds to
complete the current Phase Ib/IIa and Phase II
clinical trials and to commence Phase II clinical trials of
phenoxodiol as a monotherapy in earlier stage cancers and to
commence Phase II clinical trials of phenoxodiol in
combinational therapy with other anti-cancer drugs for late
stage chemo-resistant tumors. We will require additional funds,
however, to further the evaluation beyond these current
objectives and to pursue the commercialization of phenoxodiol.
The actual amount of funds that we will need will
be determined by many factors, some of which are beyond our
control. As a result, we may need additional funds sooner than
we currently anticipate. These factors include:
•
the progress of research activities;
•
the number and scope of research programs;
•
the progress of pre-clinical and clinical
    development activities;
•
the progress of the development efforts of
    Novogen or any other parties with whom we enter into research
    and development agreements;
•
our ability to establish and maintain current and
    new research and development and licensing arrangements;
•
our ability to achieve milestones under licensing
    arrangements;
•
the costs involved in enforcing or defending
    patent claims and other intellectual property rights; and
•
the costs and timing of regulatory approvals.
If our capital resources are insufficient to meet
future capital requirements, we will have to raise additional
funds. If we are unable to obtain additional funds on favorable
terms we may be required to cease or reduce our operations.
Also, if we raise more funds by selling additional shares of our
common stock or securities convertible into or exercisable for
shares of our common stock, your ownership interests may be
diluted.
Our commercial opportunity will be reduced
    or eliminated if competitors develop and market products that
    are more effective, have fewer side effects or are less
    expensive than phenoxodiol.
The development of phenoxodiol or drug candidates
is highly competitive. A number of other companies have products
or drug candidates in various stages of pre-clinical or clinical
development to treat prostate cancer, ovarian cancer, SCC and
other cancers that are the current focus of phenoxodiol. Some of
these potential competing drugs are further advanced in
development than phenoxodiol and may be commercialized earlier.
Even if we are successful in developing effective drugs,
phenoxodiol may not compete successfully with products produced
by our competitors.
Our competitors include pharmaceutical companies
and biotechnology companies, as well as universities and public
and private research institutions. In addition, companies active
in different but related fields represent substantial
competition for us. Many of our competitors have significantly
greater capital resources, larger research and development
staffs and facilities and greater experience in drug
development, regulation, manufacturing and marketing than us.
These organizations also compete with us to recruit qualified
personnel, attract partners for joint ventures and license
technologies that are competitive with ours. As a result, our
competitors may be able to more easily develop technologies and
products that would render our technologies or our drug
candidates obsolete or non-competitive.
8
Table of Contents
Our right to develop and exploit
    phenoxodiol is subject to the terms and conditions of certain
    agreements with Novogen and such rights may be terminated under
    circumstances pursuant to those agreements, some of which may be
    beyond our control.
We have licensed the intellectual property in the
phenoxodiol technology from Novogen. All forms of administering
phenoxodiol for the treatment of cancer are licensed to us,
excluding topical applications. If we fail to meet our
obligations under our license agreement, the manufacturing
license and supply agreement or the services agreement with
Novogen, any or all of these agreements may be terminated by
Novogen and we could lose our rights to develop phenoxodiol. In
addition, each of these agreements may be terminated immediately
by Novogen in the event that we undergo a change of control
without the consent of Novogen. A "change of control"
means a change in control of more than half the voting rights
attaching to the shares of our subsidiary, a change in control
of more than half of the issued shares of our subsidiary (not
counting any share which carries no right to participate beyond
a specified amount in the distribution of either profit or
capital) or a change in control of the composition of the board
of directors of our subsidiary.
License rights comprise our most
    significant assets and a loss of these rights will likely cause
    us to cease operations.
The rights granted to us under our license
agreement, the manufacturing license and supply agreement and
the license option deed with Novogen are our only significant
assets. Any loss of the rights under any of these agreements
will significantly reduce our asset base and likely cause us to
cease operations.
The success of phenoxodiol is largely
    dependent on Novogen's ability to obtain and maintain
    patent protection and preserve trade secrets, which cannot be
    guaranteed.
Patent protection and trade secret protection are
important to our business and our future will depend, in part,
on our ability and the ability of Novogen to maintain trade
secret protection, obtain patents and operate without infringing
the proprietary rights of others both in the United States and
abroad. Litigation or other legal proceedings may be necessary
to defend against claims of infringement, to enforce our
patents, or to protect our trade secrets or the trade secrets of
Novogen. Such litigation could result in substantial costs and
diversion of our management's attention.
The patent positions of pharmaceutical and
biotechnology companies can be highly uncertain and involve
complex legal and factual questions. Novogen has applied for
patents in a number of countries with respect to the use of
phenoxodiol for the treatment, prevention or cure of cancer. We
have licensed both issued patents and pending patent
applications from Novogen. Novogen has issued patents in the
United States, Australia and Singapore covering the use of
phenoxodiol to prevent or treat skin cancer from ultraviolet
damage. Novogen also has patents issued in Australia, Hong Kong,
New Zealand and the United Kingdom related to phenoxodiol for
the treatment of a variety of cancers and has recently received
a notice of allowance in the U.S. that is also related to
phenoxodiol for the treatment of a variety of cancers.
Novogen's applications may not proceed to
grant or may be amended to reduce the scope of protection of any
patent granted. The applications and patents may also be opposed
or challenged by third parties. Our commercial success will
depend, in part, on the ability of Novogen and us to obtain and
maintain effective patent protection for the technologies
underlying phenoxodiol and other compounds, and to successfully
defend patent rights in those technologies against third-party
challenges. As patent applications in the United States are
maintained in secrecy until published or issued and as
publication of discoveries in the scientific or patent
literature often lag behind the actual discoveries, we cannot be
certain that Novogen was the first to make the inventions
covered by its pending patent applications or issued patents or
that it was the first to file patent applications for such
inventions. Additionally, the breadth of claims allowed in
biotechnology and pharmaceutical patents or their enforceability
cannot be predicted. We cannot be sure that any additional
patents will issue from any of Novogen's patent
9
Table of Contents
applications or, should any patents issue, that
we will be provided with adequate protection against potentially
competitive products. Furthermore, we cannot be sure that should
patents issue, they will be of commercial value to us, or that
private parties, including competitors, will not successfully
challenge our patents or circumvent our patent position in the
United States or abroad.
In the event that Novogen does not comply
    with its obligations under a grant from the Australian
    government under which phenoxodiol was developed in part, our
    rights to use the intellectual property relating to phenoxodiol
    and developed by Novogen may revert back to the Australian
    government.
Novogen developed phenoxodiol in part using funds
from the Australian government under what is known as the START
Program. Although Novogen believes that it has complied with its
obligations under the START Program, if the Australian
government disagrees, or if Novogen undergoes a change of
control, the Australian government has a right to demand that
intellectual property created during the course of the project
funded by the grant be vested back in the Australian government.
The Australian government may then license the intellectual
property rights related to phenoxodiol to other parties and may
demand other intellectual property rights from Novogen. Any such
reclamation by the Australian government could preclude our use
of Novogen's intellectual property in the development and
commercialization of phenoxodiol and we may have to compete with
other companies to whom the Australian government may license
the intellectual property.
Claims by other companies that we infringe
    their proprietary technology may result in liability for damages
    or stop our development and commercialization
    efforts.
The pharmaceutical industry is highly competitive
and patents have been applied for by, and issued to, other
parties relating to products competitive with phenoxodiol.
Therefore, phenoxodiol and any other drug candidates may give
rise to claims that they infringe the patents or proprietary
rights of other parties existing now and in the future.
Furthermore, to the extent that we or Novogen or our respective
consultants or research collaborators use intellectual property
owned by others in work performed for us or Novogen, disputes
may also arise as to the rights in such intellectual property or
in resulting know-how and inventions. An adverse claim could
subject us to significant liabilities to such other parties
and/or require disputed rights to be licensed from such other
parties.
We cannot be sure that any license required under
any such patents or proprietary rights would be made available
on terms acceptable to us, if at all. If we do not obtain such
licenses, we may encounter delays in product market
introductions, or may find that the development, manufacture or
sale of products requiring such licenses may be precluded. We
have not conducted any searches or made any independent
investigations of the existence of any patents or proprietary
rights of other parties.
We may be subject to substantial costs
    stemming from our defense against third-party intellectual
    property infringement claims.
Third parties may assert that we or Novogen are
using their proprietary information without authorization. Third
parties may also have or obtain patents and may claim that
technologies licensed to or used by us infringe their patents.
If we are required to defend patent infringement actions brought
by third parties, or if we sue to protect our own patent rights,
we may be required to pay substantial litigation costs and
managerial attention may be diverted from business operations
even if the outcome is not adverse to us. In addition, any legal
action that seeks damages or an injunction to stop us from
carrying on our commercial activities relating to the affected
technologies could subject us to monetary liability and require
us or Novogen or any third party licensors to obtain a license
to continue to use the affected technologies. We cannot predict
whether we or Novogen would prevail in any of these types of
actions or that any required license would be made available on
commercially acceptable terms or at all.
10
Table of Contents
The enforcement of civil liabilities
    against our officers and directors may be
    difficult.
All of our officers and directors are residents
of jurisdictions outside the United States. As a result, it may
be difficult for you to effect service of process within the
United States upon our officers and directors or to enforce
judgments obtained against our officers and directors or us in
United States courts.
Our revenue is affected by fluctuations in
    currency exchange rates.
Much of our expenditures and potential revenue
will be spent or derived outside of the United States. As a
result, fluctuations between the United States dollar and the
currencies of the countries in which we operate may increase our
costs or reduce our potential revenue. At present, we do not
engage in hedging transactions to protect against uncertainty in
future exchange rates between particular foreign currencies and
the U.S. dollar.
We are authorized to issue a class of blank
    check preferred stock, which could adversely affect the holders
    of our common stock.
Our certificate of incorporation allows us to
issue a class of blank check preferred stock with rights
potentially senior to those of our common stock without any
further vote or action by the holders of our common stock. The
issuance of preferred stock could decrease the amount of
earnings and assets available for distribution to the holders of
our common stock or could adversely affect the rights and
powers, including voting rights, of such holders. In certain
circumstances, such issuance could have the effect of decreasing
the market price of our shares, or making a change in control of
us more difficult.
Risks Related to Our Relationship with
Novogen
As our majority stockholder, Novogen will
    have the ability to determine the outcome of all matters
    submitted to our stockholders for approval and Novogen's
    interests may conflict with our's or our other
    stockholders' interests.
Upon completion of this offering, Novogen will
beneficially own approximately 91% of our outstanding shares of
common stock assuming no additional warrants are exercised. As a
result, Novogen will have the ability to effectively determine
the outcome of all matters submitted to our stockholders for
approval, including the election and removal of directors and
any merger, consolidation or sale of all or substantially all of
our assets.
Novogen will have the ability to effectively
control our management and affairs. Novogen's interests may
not always be the same as that of our other stockholders. In
addition, this concentration of ownership may harm the market
price of our shares by:
•
delaying, deferring or preventing a change in
    control;
•
impeding a merger, consolidation, takeover or
    other business combination involving us;
•
discouraging a potential acquirer from making a
    tender offer or otherwise attempting to obtain control of us; or
•
selling us to a third party.
A majority of our directors are officers
    and/or directors of Novogen which may create a conflict of
    interest.
Four of our six existing board members, including
our Chairman, currently serve as board members of Novogen. Our
President and Chief Executive Officer, Christopher Naughton, is
the Managing Director of Novogen. Our Chief Financial Officer
and Secretary, David Ross Seaton, is the Chief Financial Officer
of Novogen. Simultaneous service as a Novogen director or
officer can create, or appear to create, a conflict of interest,
when such directors or officers are presented with decisions
that could have different implications for us and for Novogen.
11
Table of Contents
Novogen can compete with us.
We have no contract, arrangement or understanding
with Novogen to preclude it from developing a product which may
be competitive with phenoxodiol or to use phenoxodiol for any
uses other than anti-cancer applications. Novogen has reserved
the intellectual property rights and know-how rights relating to
topical applications of phenoxodiol even in the field of cancer.
There can be no assurance that Novogen or its subsidiaries will
not pursue alternative technologies or product candidates either
on its own or in collaboration with others, as a means of
developing treatments for the conditions targeted by phenoxodiol
or any other product candidate which we seek to exploit.
We are dependent on Novogen for our
    personnel.
We have no employees. We rely on Novogen to
provide or procure the provision of staff and other financial
and administrative services under our services agreement with
Novogen. To successfully develop phenoxodiol, we will require
ongoing access to the personnel who have, to date, been
responsible for the development of phenoxodiol. The services
agreement does not specify a minimum amount of time that Novogen
employees must devote to our operations. If we are unable to
secure or if we lose the services of these personnel, the
ability to develop phenoxodiol could be materially impaired.
Moreover, if our business experiences substantial and rapid
growth, we may not be able to secure the services and resources
we require from Novogen or from other persons to support that
growth.
We are largely dependent on Novogen for our
    supply of phenoxodiol and, should Novogen be unable to supply
    commercial quantities of phenoxodiol, it may be difficult to
    secure an alternative source.
It is currently intended that phenoxodiol will be
supplied to us in its primary manufactured form by Novogen under
the manufacturing license and supply agreement. As the
manufacturing process for phenoxodiol has not been tested in the
quantities needed for commercial sales, we may be unable to
receive the necessary quantities in a timely manner. In
addition, in order for Novogen to supply commercial quantities
of phenoxodiol in due course, it will need to build a new
manufacturing plant. Significant additional capital will be
required to build the plant. Such capital may not be available
to Novogen.
Risks Related to this Offering
An active trading market for shares of our
    common stock may not develop following their admission to The
    Nasdaq SmallCap Market.
Prior to this offering, there has not been a
public trading market for our common stock in the United States.
An active, liquid trading market for our common stock may not
develop or be maintained following this offering. As a result,
you may not be able to sell your shares quickly or at the market
price. The initial public offering price of our common stock
units was determined by negotiation between us and the
underwriter based on a number of factors, including the historic
trading prices of our common stock on the Alternative Investment
Market of the London Stock Exchange, which may not be indicative
of prices that will prevail in the U.S. trading market. The
market price of our common stock on the Nasdaq SmallCap Market
may decline below the initial offering price, and you may not be
able to resell your shares of our common stock at or above the
initial offering price.
There may not be a market for the warrants
    and you may have difficulty selling your warrants.
There is currently no public market for the
warrants that are being offered by this prospectus. We do not
intend to list the warrants on any national securities exchange,
automated quotation system or on the Alternative Investment
Market of the London Stock Exchange. No assurance can be given
that an active trading market will develop or as to the
liquidity or sustainability of any such market. Accordingly, you
may not be able to sell your warrants.
12
Table of Contents
The trading price of the shares of our
    common stock could be highly volatile, your investment could
    decline in value, and we may incur significant costs from class
    action litigation.
The trading price of our common stock could be
highly volatile in response to various factors, many of which
are beyond our control, including:
•
developments concerning phenoxodiol;
•
announcements of technological innovations by us
    or our competitors;
•
new products introduced or announced by us or our
    competitors;
•
changes in financial estimates by securities
    analysts;
•
actual or anticipated variations in operating
    results;
•
expiration or termination of licenses, research
    contracts or other collaboration agreements;
•
conditions or trends in the regulatory climate
    and the biotechnology, pharmaceutical and genomics industries;
•
changes in the market valuations of similar
    companies;
•
the liquidity of any market for our securities;
•
trading prices of our common stock on the
    Alternative Investment Market of the London Stock Exchange; and
•
additional sales by us or Novogen of shares of
    our common stock.
In addition, equity markets in general, and the
market for biotechnology and life sciences companies in
particular, have experienced substantial price and volume
fluctuations that have often been unrelated or disproportionate
to the operating performance of companies traded in those
markets. In addition, changes in economic conditions in the
United States, Europe or globally, could impact upon our ability
to grow profitably. Adverse economic changes are outside our
control and may result in material adverse impacts on our
business or our results of operations. These broad market and
industry factors may materially affect the market price of our
shares of common stock, regardless of our development and
operating performance. In the past, following periods of
volatility in the market price of a company's securities,
securities class-action litigation has often been instituted
against that company. Such litigation, if instituted against us
could cause us to incur substantial costs and divert
management's attention and resources.
You will experience immediate and
    substantial dilution as a result of this offering and may
    experience additional dilution in the future.
If you purchase common stock in this offering,
you will pay more for your shares than the amounts paid by
existing stockholders for their shares. As a result, you will
incur immediate and substantial dilution of
$          per
share, representing the difference between our pro forma net
tangible book value per share after giving effect to this
offering and the initial public offering price. In addition,
purchasers of shares of our common stock in this offering will
have contributed
approximately           %
of the aggregate price paid by all purchasers of our stock, but
will own only
approximately           %
of the shares of our common stock outstanding after this
offering based on the number of shares of our common stock
outstanding as of June 30, 2003. If the holders of the
currently outstanding warrants exercise those warrants at prices
below the initial public offering price, you will experience
further dilution. We may also acquire other companies or
technologies or finance strategic alliances by issuing equity,
which may result in additional dilution to our stockholders.
13
Table of Contents
You will not be able to exercise the
    warrants offered hereby if we do not maintain the effectiveness
    of the registration statement and a current
    prospectus.
If we do not maintain an effective registration
statement and a current prospectus or comply with applicable
state securities laws, you may not be able to exercise the
warrants offered hereby. In order for you to be able to exercise
the warrants, the shares underlying the warrants must be covered
by an effective registration statement and a current prospectus
and be qualified for sale or exempt from qualification under the
applicable securities laws of the state in which you reside.
Although we cannot assure you that we will actually be able to
do so, we will use our best efforts to:
•
maintain an effective registration statement and
    a current prospectus covering the shares of our common stock
    underlying the warrants at all times when the market price of
    the common stock exceeds the exercise price of the warrants
    until the expiration of the warrants, and
•
maintain the registration of such shares under
    the securities laws of the states in which we initially qualify
    the common stock units for sales in this offering.
There can be no assurance that the trading
    price of our common stock will exceed the exercise price of the
    warrants being sold in this offering.
The warrants will entitle the holders to purchase
one share of our common stock at an exercise price equal to 120%
of the initial public offering price anytime after issuance
until the warrants expire on the third anniversary of their
issuance. There can be no assurance that the trading prices of
our common stock will exceed the exercise price of the warrants.
As a result, your warrants could expire and have no value.
14
Table of Contents
SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS
This prospectus includes forward-looking
statements. All statements other than statements of historical
facts contained in this prospectus, including statements
regarding our future financial position, business strategy and
plans and objectives of management for future operations, are
forward-looking statements. The words "believe,"
"may," "will," "estimate,"
"continue," "anticipate,"
"intend," "should," "plan,"
"expect" and similar expressions, as they relate to
us, are intended to identify forward-looking statements. We have
based these forward-looking statements largely on our current
expectations and projections about future events and financial
trends that we believe may affect our financial condition,
results of operations, business strategy and financial needs.
These forward-looking statements are subject to a number of
risks, uncertainties and assumptions described in "Risk
Factors" and elsewhere in this prospectus, including, among
other things:
•
receipt of regulatory approvals;
•
successful completion of clinical trials;
•
continued cooperation and support of Novogen, our
    parent;
•
future expenses and financing requirements; and
•
competition and competitive factors.
These risks are not exhaustive. Other sections of
this prospectus may include additional factors which could
adversely impact our business and financial performance.
Moreover, we operate in a very competitive and rapidly changing
environment. New risk factors emerge from time to time and it is
not possible for us to predict all risk factors, nor can we
assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any
forward-looking statements.
You should not rely upon forward-looking
statements as predictions of future events. We cannot assure you
that the events and circumstances reflected in the
forward-looking statements will be achieved or occur. Although
we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee
future results, levels of activity, performance or achievements.
15
Table of Contents
USE OF PROCEEDS
We expect to receive approximately
$                     million
in net proceeds from this offering
($                    if
the underwriter exercises its over-allotment option in full),
assuming an initial public offering price of
$          per
common stock unit, the midpoint of the range set forth on the
cover page of this prospectus, after deducting underwriting
discounts and commissions and estimated offering expenses.
We intend to use the net proceeds from this
offering as follows:
•
approximately $1.1 million will be used to
    commence Phase II clinical trials studies of phenoxodiol as
    a monotherapy in early-stage prostate cancer, SCC of the cervix,
    vagina and vulva, and possibly other tumors such as breast
    cancer where diagnosis of early stage disease is available;
•
approximately $4.2 million will be used to
    commence Phase II clinical trials of phenoxodiol in
    combinational therapy with standard anti-cancer drugs for
    late-stage, chemo-resistant ovarian cancer, and possibly other
    tumors such as renal cancer; and
•
the remainder for general corporate purposes,
    including potential payments to Novogen under the terms of the
    license agreement.
16
Table of Contents
DETERMINATION OF OFFERING PRICE
Prior to this offering, there has been no trading
market for our common stock in the United States. Our common
stock is listed on the Alternative Investment Market of the
London Stock Exchange (the AIM). The initial public offering
price will be determined by negotiation between us and the
underwriter based on a number of factors, including the historic
trading prices of our common stock on the AIM, that may not be
indicative of prices that will prevail in the trading market for
our common stock in the United States.
PRICE RANGE OF OUR COMMON STOCK
Our common stock has traded on the AIM since May
2002 under the symbol "MSH". The following table sets
forth, for the periods indicated, the high and low closing sale
prices for our common stock as reported by the London Stock
Exchange. The trading price for our shares of common stock on
the AIM are quoted in sterling (£), the lawful
currency of the United Kingdom.
Quarter Ended
High
Low
June 30, 2002.
£2.80
£2.30
September 30, 2002
£2.50
£2.30
December 31, 2002.
£2.48
£2.42
March 31, 2003.
£2.46
£2.25
June 30, 2003.
£3.55
£2.30
The following table sets forth, for the period
indicated, the high, low, average and period-end noon buying
rate for sterling, expressed in dollars per sterling in New York
City as certified for customs purposes by the Federal Reserve
Bank of New York.
Quarter Ended
High
Low
Average
Period-End
June 30, 2002
$
1.5285
$
1.4310
$
1.4615
$
1.5245
September 30, 2002
$
1.5800
$
1.5192
$
1.5497
$
1.5700
December 31, 2002
$
1.6095
$
1.5418
$
1.5714
$
1.6095
March 31, 2003
$
1.6482
$
1.5624
$
1.6025
$
1.5790
June 30, 2003
$
1.6840
$
1.5500
$
1.6183
$
1.6529
On                     ,
2003, the closing sales price of our common stock as reported by
the London Stock Exchange was £  per share, or
approximately
$          per
share based on the noon buying rate for sterling of
£1.00 = $                    on                     ,
2003.
DIVIDEND POLICY
We have never declared or paid any cash dividends
on our capital stock. We currently intend to retain future
earnings, if any, to finance the operation and expansion of our
business. Therefore, we do not anticipate paying any cash
dividends on our capital stock in the foreseeable future. In
addition, if we were to borrow against any credit facility that
we may enter into, we may be prohibited from paying cash
dividends.
17
Table of Contents
CAPITALIZATION
The following table sets forth our capitalization
as of June 30, 2003:
•
on an actual basis; and
•
as adjusted to reflect the effect of the sale of
    a total of 2,000,000 common stock units in this offering at an
    assumed initial public offering price of
    $          per
    unit, the midpoint of the range set forth on the cover of the
    prospectus.
This table should be read in conjunction with
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the consolidated
financial statements and the notes thereto included elsewhere in
this prospectus.
As of June 30, 2003
Actual
As Adjusted
(dollars in thousands)
Cash and cash equivalents
$
7,244
$
17,100
Short-term debt
Current portion of long-term debt
—
—
Long-term debt
Bank borrowings
—
—
Stockholders' equity: preferred stock, $0.01
    par value, 100,000 shares authorized; no shares issued and
    outstanding
—
—
Common stock, $0.00000002 par value, 113,00,000
    shares authorized, 52,032,000 shares issued and outstanding
    actual and 54,032,000 shares issued and outstanding as adjusted
Additional paid-in-capital
9,058
18,914
Deficit accumulated during development stage
(3,156
)
(3,156
)
Accumulated other comprehensive income
31
31
Total stockholders' equity
5,933
15,789
Total debt and stockholders' equity
$
5,933
$
15,789
This table excludes 2,514,000 shares of our
common stock issuable upon exercise of our outstanding warrants.
The outstanding warrants have an exercise price of $4.00 per
share and expire on November 30, 2003.
This table also excludes 2,000,000 shares of
our common stock that may be issued upon exercise of the
warrants that are included in the units being offered by this
prospectus.
18
Table of Contents
DILUTION
If you invest in our common stock units, your
interest will be diluted to the extent of the difference between
the initial public offering price per share of our common stock
units, attributing no value to the warrants that are included in
the common stock units, and the pro forma as adjusted net
tangible book value per share of our common stock immediately
after this offering. Pro forma net tangible book value per share
represents the amount of our total tangible assets less total
liabilities, divided by the pro forma number of shares of our
common stock outstanding. Investors participating in this
offering will incur immediate, substantial dilution.
Our net tangible book value at June 30,
2003, before adjustment for this offering, was approximately
$5,933,000, or approximately $0.11 per share. After giving
effect to the sale of 2,000,000 common stock units in this
offering, at an assumed initial public offering price of $5.50
per unit, the midpoint of the range set forth on the cover page
of this prospectus, and after deducting the estimated offering
expenses, our as adjusted net tangible book value at
June 30, 2003 would have been $15,789,000 or $0.29 per
share. This represents an increase in net tangible book value of
$0.18 per share to our existing stockholders and an immediate
dilution (i.e., the difference between the public offering price
per unit, attributing no value to the warrants that are included
in the common stock units, and the net tangible book value per
share adjusted for this offering) at June 30, 2003 of $5.21
per share to purchasers of the common stock units offered
hereby. The following table illustrates this per share dilution:
Assumed initial public offering price per unit
$
5.50
Net tangible book value per share at
    June 30, 2003
$
5,933
Increase in net tangible book value per share
    attributable
to the new investors
9,856
As adjusted net tangible book value per share
    after this offering
0.29
Dilution per share to new investors
$
5.21
The above table excludes the possible exercise of
our 2,514,000 outstanding warrants which have an exercise
price of $4.00 per share and expire on November 30,
2003.
Assuming the underwriter's over-allotment
option is exercised in full, the net tangible book value at
June 30, 2003 would have been $17,324,000, or $0.32 per
share, the immediate increase in net tangible book value of
shares owned by existing stockholders would have been $0.21 per
share, and the immediate dilution to purchasers of the common
stock units in this offering would have been $5.29 per share.
The following table summarizes at June 30,
2003, after giving effect to the sale of 2,000,000 common
stock units at an assumed initial public offering price of $5.50
per unit, the midpoint of the range set forth on the cover page
of this prospectus, the number of shares of common stock
purchased from us, the total consideration paid to us for those
shares, attributing no value to the warrants that are included
in the common stock units, and the consideration given by the
existing stockholders and by the new investors assuming
approximately 54,032,000 shares of our common stock are
outstanding:
Shares Purchased
Total Consideration
Average
Price
Number
Percent
Amount
Percent
Per Share
(in thousands)
(in thousands)
Existing stockholders
52,032
96
$
10,128
48
$
0.19
New investors
2,000
4
11,000
52
$
5.50
Total
54,032
100
$
21,128
100
19
Table of Contents
SELECTED HISTORICAL CONSOLIDATED FINANCIAL
DATA
The following table shows selected historical
financial data for the years ended June 30, 2003 and 2002.
This information has been derived from our audited consolidated
financial statements included in this prospectus.
The information below should be read in
conjunction with "Management's Discussion and Analysis
of Financial Condition and Results of Operations,"
"Risk Factors" and the consolidated financial
statements and the notes thereto included elsewhere in this
prospectus.
Period from
Year Ended
December 1, 2000
June 30,
through June 30,
2003
2002
2003
(in thousands, except share and per share data)
Statement of Operations Data:
Interest and other income
$
145
$
7
$
152
Net loss arising during development stage
$
(3,033
)
$
(123
)
$
(3,156
)
Net loss per common share
$
(0.058
)
$
(0.002
)
Weighted average shares used to calculate loss
    per share
52,023,247
49,769,581
Common stock outstanding at year end
52,032,000
52,023,000
June 30,
2003
2002
(in thousands)
Balance Sheet Data:
Cash and cash equivalents
$
7,244
$
9,164
Total assets
7,286
9,185
Shareholders' equity
5,933
8,899
20
Table of Contents
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be
read in conjunction with our consolidated financial statements
and the notes thereto appearing elsewhere in this prospectus.
Our fiscal year ends June 30. We commenced business
operations in May 2002, and as a result our financial results
for fiscal 2003 represent our first full year of operations.
Results of Operations
We are a development stage company that is
principally engaged in the clinical development of the
anti-cancer drug phenoxodiol, which Novogen has licensed to us.
Our main focus during fiscal 2003 was to undertake human
clinical testing of phenoxodiol. We do not employ any staff
directly but obtain services from Novogen under a services
agreement.
We recorded a consolidated loss of $3,033,000 and
$123,000 for the fiscal years ended June 30, 2003 and 2002,
respectively. We have not generated any revenues from operations
since our inception. We have, however, received interest on our
cash assets of $145,000.
Consolidated operating expenses for fiscal 2003
were $3,178,000 versus $129,000 for fiscal 2002. Our major
operating expenses are the costs associated with conducting the
clinical trials of phenoxodiol, which were $1,089,000, and the
costs incurred under the license agreement and the services and
manufacturing agreements with Novogen including the cost of the
clinical trial drug supplies, which were $1,740,000. See
"Certain Relationships and Related Transactions."
We intend to continue the clinical development of
phenoxodiol and to assess the opportunity to license other
cancer drugs developed by Novogen as the opportunities arise.
Liquidity and Capital Resources
At the end of fiscal 2003, we had cash resources
of $7,244,000. Funds are invested in short-term money market
accounts, pending use. The implementation of our business plan
is dependent on our ability to maintain adequate cash resources
to complete the clinical development program.
In May 2002, we raised $10,092,000 through a
private placement of 2,523,000 shares of common stock in
conjunction with the listing of our common stock on the
Alternative Investment Market of the London Stock Exchange.
Total proceeds of $9,022,000 were received, net of $1,070,000 of
transaction costs. The 2,523,000 shares of our common stock,
which represent 4.9% of our issued common stock, were issued at
$4.00 per share. Each share has an attached warrant exercisable
at any time prior to November 30, 2003 with an exercise
price of $4.00 per share. These funds were sufficient to
progress the clinical development program that Novogen had
commenced prior to licensing phenoxodiol to us and to commence
new clinical trials. At present, 9,000 warrants have been
exercised.
Based on our current plans, we believe that with
the net proceeds of this offering, we will have sufficient funds
to complete the current Phase Ib/IIa and Phase II clinical
trial program, commence Phase II clinical trials of
phenoxodiol as a monotherapy in early stage cancer, and to
commence Phase II clinical trials of phenoxodiol in
combinational therapy with other anti-cancer drugs for late
stage chemo-resistant tumors. We believe we will have sufficient
cash resources to fund our operations at least through the end
of the fiscal year. Our ongoing operations through the conduct
of the clinical trial program will continue to consume cash
resources without generating revenues.
If the Phase III clinical program is
undertaken, we will require additional funds to complete the
program. We are not able to reasonably estimate at this time
either the amount required or when that amount will need to be
raised. This will to a large extent be influenced by the number
of patients enrolled in the trial, which can only be determined
accurately upon completion of Phase II trials. If the
Phase II
21
Table of Contents
trials are successful, we will seek to raise the
funds required to complete Phase III trials or enter into a
collaborative arrangement with a major pharmaceutical company.
We must pay amounts to Novogen under our license
agreement with Novogen when certain milestones are met, as
follows:
•
A lump sum license fee of $5,000,000 is payable
    to Novogen on the date when the cumulative total of all funds
    received from debt or equity issuances, revenue received from
    commercialization income, other than sales, and revenue from
    sales of phenoxodiol products exceeds $25,000,000.
•
A lump sum license fee of $5,000,000 is payable
    to Novogen on the later of November 1, 2003 or on the date
    when the cumulative total of all funds received from debt or
    equity issuances, revenue received from commercialization
    income, other than sales, and revenue from sales of phenoxodiol
    products exceeds $50,000,000.
The cumulative total of funds received by us as
of the date of this prospectus is $10,128,000.
In addition, we must pay annual license fees to
Novogen under the license agreement for the calendar years ended
December 31 as follows:
2003
$
1,000,000
2004
$
2,000,000
2005
$
4,000,000
Each calendar year thereafter
$
8,000,000
Any amounts payable to Novogen under the above
annual payments will be reduced for amounts we pay under the
first lump sum license fee referred to above. For the fiscal
year ended June 30, 2003, $500,000 has been included as
license fee expense in the consolidated statements of
operations. See "Certain Relationships and Related
Transactions" for more information about our license
agreement with Novogen.
We do not intend to incur any significant capital
expenditures in the foreseeable future.
Critical Accounting Estimates
The preparation of our consolidated financial
statements in conformity with accounting principles generally
accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in
the financial statements and the accompanying notes. Actual
results could differ from those estimates.
Estimates have been used in determining our
expense liability under certain clinical trial contracts where
services have been performed but not yet invoiced. The actual
costs of those services could differ in amount and timing from
the estimates used in completing the financial results.
Recent Accounting Announcements
Accounting pronouncements issued by the Financial
Accounting Standards Board or other authoritative accounting
standards groups with future effective dates are either not
applicable or not significant to our consolidated financial
statements.
22
Table of Contents
Market Risk and Risk Management
Practices
We have established controls at the board level
designed to safeguard our interests and ensure integrity in the
reporting to stockholders. Our practices are in place to
minimize risks that arise through our activities. These include
practices that:
•
ensure that any capital expenditure above a
    certain level is approved by the board;
•
ensure that business risks are appropriately
    managed through an insurance and risk management program;
•
ensure that safety, health, environmental
    standards and management's systems are monitored and
    reviewed to achieve high standards of compliance and
    performance; and
•
ensure implementation of board approved operating
    plans and budgets and board monitoring of progress against these
    budgets, including the establishment and monitoring of key
    performance indicators.
Impact of Inflation
Although inflation has slowed in recent years it
is still a factor that may affect our financial performance. We
do not earn sales revenue and for the foreseeable future we will
not be able to increase the price of goods sold to offset
inflationary effects. Costs incurred in conducting clinical
trails are affected by inflation as are other inputs. There is a
risk that costs will increase over time due to inflation
increasing the cost to us.
23
Table of Contents
BUSINESS
We are a developmental stage pharmaceutical
company involved in the development and commercialization of
drugs for the treatment of cancer. We are presently engaged in
the clinical development of a drug candidate called phenoxodiol,
which we believe may have broad application against a wide range
of cancers. Phenoxodiol appears to target a number of key
components involved in cancer cell survival and proliferation
based on the emerging field of signal transduction regulation,
with little or no effect on normal cells. We have attached as
Annex A, a glossary of technical and scientific terms that
we use in this prospectus.
Scientific Overview
Phenoxodiol belongs to a class of drugs that we
refer to as Multiple Signal Transduction Regulators (MSTRs).
Signal transduction refers to the means by which
cells respond to chemical signals that come from within the cell
itself, from neighboring cells, and from elsewhere in the body.
These signals regulate such vital functions as the growth and
survival of the cell. It is now thought that malfunctions in key
components of the signal transduction process are fundamental to
degenerative diseases such as cancer, where cells respond
abnormally to normal levels of signals, typically by
over-responding to them with increased cell growth and survival.
Identifying such malfunctions and then designing
drugs to block or correct them has become an important strategy
for the development of the next generation of anti-cancer drugs.
These drugs have become known as signal transduction inhibitors.
These drugs are the result of rational drug design, being
designed to target a specific signaling pathway which typically
is over-active in a tumor cell, and by blocking its progression,
so to prevent or reduce the ability of the tumor cell to divide
or to survive. Signal transduction inhibitors, while displaying
anti-tumor activity against a small number of different types of
cancer, generally have failed to provide more than modest
prolongation of survival of cancer patients. This is thought to
be because most human cancers involve errors of multiple
signaling pathways, and inhibition of a single pathway by any
one drug alone cannot reasonably be expected to provide more
than a temporary halt to cancer progression.
We believe phenoxodiol increases the potency of
signal transduction inhibitors by targeting multiple signaling
pathways, and in particular, those pathways vital to the
survival of most, if not all, human cancer cells. In the term
MSTR, "multiple" refers to the fact that more than one
signaling pathway is targeted by the drug, and
"regulator" refers to the fact that while the drug
predominantly inhibits errant signaling pathways, other
signaling pathways (e.g., anti-survival pathways) can be
activated.
Phenoxodiol targets a number of key components
involved in cancer cell survival and proliferation signal
transduction processes. Kinases (e.g., sphingosine kinase and
growth factor receptor-associated protein tyrosine kinases)
appear to be key targets of phenoxodiol, with inhibition of
these targets resulting in cancer cell cytotoxicity (death) and
cytostasis (blocking cell division).
This disrupting effect of phenoxodiol is
restricted to tumor cells, with non-tumor cells remaining
unaffected. A potential explanation for this selective
anti-tumor effect was provided by a recent discovery of a
research team at Purdue University. The research team discovered
that phenoxodiol targets a particular member of the ECTO-NOX
family of proteins. This family of proteins regulates
fundamental biological processes at the cell surface that are
vital to the survival and growth of all living matter. One of
these proteins, known as constitutive NADH oxidase
(CNOX) is a fundamental source of hydrogen ions for all
living cells. The Purdue University studies have now shown that
all forms of human cancer express a variant form of CNOX, known
as tNOX. The presence of tNOX disrupts the normal pattern of
behavior of the cell, contributing to the unregulated cell
growth and survival that characterizes tumor cells. This makes
tNOX the first pan-cancer expressed protein, identifying it as a
potentially important new target for anti-cancer drug
development. Phenoxodiol appears to specifically block the
action of tNOX, with the resulting inhibition of H+ influx into
the cell, leading to extensive disruption to signaling pathways
and to
24
Table of Contents
eventual apoptosis. Phenoxodiol has no effect on
CNOX, providing an explanation of how phenoxodiol can be so
selective in its action, with its cytotoxic effects being
limited to cancer cells.
Laboratory studies at Yale University also have
revealed that the killing effect of phenoxodiol of cancer cells
occurs through the caspase enzyme pathway, and that key triggers
of this proteolytic pathway are the up-regulation of production
in the cancer cell of pro-apoptotic factors such as Bax and the
increased degradation of anti-apoptotic factors such as c-FLIP
and XIAP. The latter effect facilitates death of cancer cells
via either the Fas or TRAIL death receptor mechanisms. Some
aspects of this function were published recently in the Nature
journal,
Oncogene
.
Recent laboratory studies conducted by Novogen
and Yale University studies have revealed that phenoxodiol
interacts well with a number of standard anti-cancer drugs such
as cisplatin, gemcitabine and taxanes. In one aspect of this
effect, phenoxodiol appears to restore sensitivity to these
drugs in cells such as ovarian cells that have acquired
resistance to such drugs. In another aspect, pretreatment of
tumor cells with phenoxodiol considerably increases the
sensitivity of virgin tumor cells to the cytotoxic effects of
standard chemotoxic drugs. Both of these effects are achieved
without increasing the toxicity of the standard chemotoxic drugs
to non-tumor cells.
Market Opportunity
The American Cancer Society, or ACS, has reported
that, in the year 2003, approximately 1,344,100 new cancer cases
are expected to be diagnosed in the United States and that since
1990, approximately 17 million new cancer cases have been
diagnosed. The ACS has also reported that 556,500 people in the
United States are expected to die from cancer this year.
The primary focus in the development of
phenoxodiol is currently in connection with ovarian cancer,
squamous cell carcinoma, or SCC of the cervix, vagina, vulva and
skin, and prostate cancer. Subject to further successful
clinical research and development, we believe that phenoxodiol
may have potential uses in other forms of human cancers as well
as in combinational therapy with other anti-cancer drugs.
The cancers for which phenoxodiol is intended to
be used are relatively common and we believe, in general, are
poorly managed with current therapeutics.
The ACS has estimated that in 2003 there will be
220,900 new cases of prostate cancer and 28,900 people will die
as result of this cancer in the United States. The treatment of
prostate cancer depends on age, stage of the cancer, and other
medical conditions of the patient. Current treatment options
include surgery, radiation, hormonal therapy or chemotherapy (or
a combination of these treatments) depending on the stage of the
disease. Survival rates also depend on the stage of the disease.
However, there is a low survival rate associated with advanced
disease.
The ACS has also estimated that in 2003 there
will be 25,400 new cases of ovarian cancer diagnosed and 14,300
will die as a result of this cancer in the United States.
Treatment options for ovarian cancer include surgery, radiation
therapy and chemotherapy. Treatment in advanced cases is
associated with low survival rates.
SCC is a common type of cancer found in the skin
and mucous membranes of the body. Cancers of the cervix, vagina
and vulva are mostly of the SCC type and are recognized for
their poor response to standard chemotherapy. Surgery remains
the treatment of choice for these cancers and treatment in
advanced cases is associated with low survival rates. For
cancers of the cervix, vagina and vulva the ACS estimates that
in the year 2003, there will be 18,600 new cases diagnosed and
that there will be 5,700 deaths caused by these cancers in the
United States. Cutaneous SCC is a relatively common form of skin
cancer. It is most common in sun-exposed areas and if left
untreated can invade locally, requiring extensive surgery. The
ACS estimates that 2,200 deaths will occur in the United States
as a result of these cancers.
25
Table of Contents
Overall Clinical Development
Strategy
We believe that based on its mode of action,
phenoxodiol has the potential ultimately to become a treatment
option for a wide range of human cancers, and to be employed at
various stages of cancer development ranging from early stage
cancer through to late-stage cancer.
The immediate priority, is to focus on those
therapeutic indications that will expedite drug marketing
approval of phenoxodiol by regulatory bodies. To this end, we
will continue our work in late-stage chemo-resistant cancers
including completing our current intravenous monotherapy ovarian
cancer clinical trial currently underway at Yale University.
Pending the outcome of this trial we intend to expend our
intravenous program to include combinational therapy using
phenoxodiol in combination with standard chemotherapy drugs in
cancers which have become chemo-resistant. In chemo-resistant
cancers we hope to show that phenoxodiol will provide in humans
what it has demonstrated in the laboratory and in animal models,
that is, the restoration of chemo-sensitivity to standard
chemotoxic agents. In this way, phenoxodiol will be used to
"condition" the tumor cells to the more destructive
effects of drugs such as cisplatin, gemcitabine and taxanes,
with the combined effects of all drugs providing a potent force
able to attack well-established and extensive cancer disease. In
the next stage of our clinical development program for
phenoxodiol in the area of chemo-resistant cancers, it is
possible that other forms of cancer (such as renal carcinoma,
head and neck cancer), generally regarded as unresponsive to
standard drugs, will be added to this program in due course in
order to maximize the opportunity for treating chemo-resistant
cancers.
A secondary priority is to develop phenoxodiol
for use in earlier-stage cancers. This is the basis of the
planned clinical program involving oral phenoxodiol in SCC of
the cervix, vagina, vulva including our planned adjuvant trial
at Yale University and skin, and prostate cancer. These are all
forms of cancer for which early diagnosis is commonly available,
and for which a non-invasive, non-surgical drug option might be
an attractive therapeutic option. In this strategy, phenoxodiol
is being studied in the first instance as an oral monotherapy in
the expectation that phenoxodiol alone will provide an adequate
anti-cancer effect.
Specific Objectives
Our current objectives are to:
•
complete the Phase Ib/IIa and Phase II
    clinical programs for phenoxodiol as a monotherapy currently
    being undertaken;
•
commence a Phase II study in patients with
    late-stage, chemoresistant ovarian cancer that will use
    phenoxodiol in combination with standard anti-cancer drugs.
•
commence Phase II studies for phenoxodiol as
    a monotherapy, targeting early-stage cancer of the cervix,
    vagina and vulva, and prostate cancer;
We anticipate that with the proceeds of this
offering we will have sufficient funds for these activities. The
success and timing of the clinical trials could vary
significantly from current estimates. A delay in any one phase
of trials is likely to delay following phases. Our long-term
objectives will be to:
•
commence Phase III clinical trials for
    phenoxodiol as both a monotherapy for early-stage cancers and
    for use in combinational therapy for later-stage cancers;
•
seek to develop relationships with strategic
    partners for the development, marketing and distribution of
    phenoxodiol as a treatment for those cancer indications for
    which regulatory approval is obtained;
•
potentially expand the uses of phenoxodiol to
    treat other cancers; and
•
pursue appropriate opportunities to develop and
    commercialize other anti-cancer compounds.
We will require additional funding in order to
undertake our long-term objectives.
26
Table of Contents
History of Phenoxodiol Development
In 1995, phenoxodiol was identified as a
potential putative metabolite of daidzein, or naturally
occurring isoflavore. To date, phenoxodiol has not appeared to
have been isolated or identified in mammals.
Novogen scientists first synthesized phenoxodiol
in 1997 as part of a program of synthesis of compounds based on
an isoflavonoid ring chemical structure. When screened for
anti-cancer action against human cancer cells
in vitro
,
phenoxodiol was found to be cytostatic and cytotoxic against a
wide range of human cancer cells, but without toxicity against
non-tumor cells.
In vivo
studies in laboratory animals
subsequently showed that phenoxodiol administered either orally
or systemically was adequately bioavailable and significantly
retarded tumor development, in particular in athymic mice
bearing xenografts of human prostate cancer. Such anti-cancer
effects in animals were achieved without evidence of toxicity,
and thus phenoxodiol was selected for development as a human
anti-cancer drug.
Subsequent pre-clinical studies identified a
range of molecular targets of phenoxodiol within human cancer
cells, prompting us to classify the drug as a Multiple Signal
Transduction Regulator.
The broad anti-cancer action of phenoxodiol
against an extensive library of different human cancer cell
lines (prostate, breast, ovarian, lung and cervical cancer,
mesothelioma, melanoma, glioma and rhabdomyosarcoma), suggested
potential clinical application against a wide range of types of
human cancer. Further pre-clinical studies showed that
phenoxodiol has a number of indirect anti-cancer effects (a
potent ability as an anti-androgen and an ability to induce
apoptosis of hyperplastic prostate smooth muscle cells) that
suggested prostate cancer as a particularly suitable clinical
target, leading to this form of cancer being identified early as
a prime potential clinical target for the drug. However, with a
view to allowing further time to identify the most sensitive
types of cancer to phenoxodiol, the strategy adopted was to
conduct Phase I studies in patients with a wide selection
of solid tumors in order to gain tentative evidence of efficacy
across a range of different tumor types.
Phase Ia pharmacokinetic studies conducted
in cancer patients in May 2000 showed that phenoxodiol behaved
similarly to steroidal hormones and was prone to conjugation
(glucuronide and sulfates) within the body. These conjugated
forms are the means by which a water-insoluble drug such as
phenoxodiol is transported within the body. Conversion of these
drugs to the active form requires deconjugation by relevant
enzymes within end tissues to yield the bioactive
(unconjugated) drug form. Bioequivalence studies showed
that phenoxodiol is considerably more prone to conjugation when
administered orally (greater than 99%) compared to intravenously
(approximately 85%). Therefore, in the absence of definitive
data on the rates of expression of deconjugating enzymes by
different tumor types, it was decided to commence clinical
studies with an intravenous dosage form of phenoxodiol because
of the certainty of obtaining levels of unconjugated phenoxodiol
in the plasma that were known in the laboratory to be highly
cytotoxic to cancer cells.
A Phase Ib toxicity study was commenced in
Australia in November 2000 and finished in March 2002.
Twenty-one patients with late-stage solid cancers (any type)
were given phenoxodiol by weekly bolus injections for
12 weeks. This was a dose-escalating study, with
inter-patient escalation from 1 to 30 mg/kg/dose. No
dose-limiting toxicity was reached and no significant toxicities
other than some hypersensitivities to the drug vehicle
(cyclodextrin) were encountered.
A second Phase Ib toxicity study commenced in
Australia in April 2001 and concluded in 2002. Twenty-one
patients with late-stage solid cancers (any type) were given
phenoxodiol by continuous intravenous infusion. This was a
dose-escalating study, with inter-patient escalation from
1 to 40 mg/kg/day. No dose-limiting toxicity was
reached and no significant toxicities were encountered.
The intravenous dosage form of phenoxodiol was
granted IND status by the FDA in January 2001, allowing a
third Phase Ib toxicity study to commence at The Cleveland
Clinic, Ohio, in August 2001. This study concluded in 2002.
Nineteen patients with late-stage solid cancers (any type) were
given phenoxodiol by continuous intravenous infusion. This was a
dose-escalating study, with inter-patient
27
Table of Contents
escalation from 0.5 to 64 mg/kg/day. No
dose-limiting toxicity was reached and no significant toxicities
were encountered.
Concurrent with the Phase I clinical trial
program outlined above, pre-clinical studies continued with a
view to better understanding the molecular targets of
phenoxodiol and the most appropriate tumor types for therapy. In
terms of molecular targets, a number of important actions were
identified:
•
that phenoxodiol has broad inhibitory activity
    against kinase enzymes, resulting in disruption to a wide range
    of signaling pathways involved in cell survival and growth;
•
that phenoxodiol-induced apoptosis occurred via
    the caspase cascade;
•
that phenoxodiol-induced apoptosis was initiated
    as a result of activation of death receptor (Fas, TRAIL)
    mechanisms and down-regulation of death receptor blockers
    (c-FLIP, XIAP); and
•
that a key molecular target is the receptor
    protein, tNOX, whose inhibition leads to extensive disruption of
    pro-survival mechanisms.
A further key pre-clinical finding was that
phenoxodiol was particularly effective against ovarian cancer,
melanoma and mesothelioma cell lines that were resistant to all
standard chemotoxic anti-cancer drugs, pointing to the
usefulness of phenoxodiol at least in patients with these
cancers who had failed all other forms of chemotherapy.
The selection of specific tumor types in which to
test phenoxodiol in Phase II clinical trials was based on a
number of factors. First, the known relevance of certain actions
of phenoxodiol (e.g., the targeting of death receptor activity)
to the survival of certain cancer cell types; second,
pre-clinical experience with the use of phenoxodiol in animals
bearing human tumor xenografts; and third, observations of
clinical responses in patients treated with phenoxodiol. The
particular tumor types selected are ovarian cancer, prostate
cancer, and SCC of skin and mucosal surfaces. Renal cancer,
breast and pancreatic cancer also have been identified as
potential clinical targets, and may be studied in due course. A
feature of this entire group of cancers that underlies their
selection from a strategic point of view is their aggressiveness
and generally low sensitivity to standard chemotoxic drugs.
A team of scientists at Yale University School of
Medicine commenced a Phase II study in October 2002 of
the intravenous dosage form of phenoxodiol in 40 patients with
ovarian cancer. We expect that we will receive interim results
from this study by the end of this year.
Novogen decided to pursue the clinical
applications in prostate cancer and SCC using the oral dosage
form of the drug. This followed the trial use of the oral dosage
form in a number of patients who had completed the Phase I
trials of the intravenous dosage form of phenoxodiol. The oral
dosage form was found capable of prolonging survival in patients
with advanced disease despite the presence of phenoxodiol in the
blood in an almost completely conjugated form. It appears that
certain types of tumors may have the capacity to deconjugate
phenoxodiol conjugates to the active drug form. Clinical trials
on the oral dosage form of phenoxodiol began in Australia in
January 2002. This dosage form currently is being evaluated
in Australian hospitals in Phase II clinical trials for the
treatment of prostate cancer and SCC.
The oral dosage form of phenoxodiol was granted
IND status by the FDA in June 2003, which cleared the way
to commence a study in collaboration with Yale University School
of Medicine in patients with cancer of the cervix, vulva and
vagina. Phenoxodiol will be used on a monotherapy basis in
patients following a primary diagnosis of cancer. Phenoxodiol
will be administered daily for periods of up to 4 weeks
prior to surgery or radiotherapy.
A Phase Ib/IIa study began in early 2002 on
the use of phenoxodiol in patients with hematological tumors, in
an attempt to test the usefulness of phenoxodiol in non-solid
tumors. However, the apparent sensitivity of certain solid
tumors to phenoxodiol and the need to focus resources on those
clinical opportunities mean that an application in hematological
tumors is unlikely to be taken further.
28
Table of Contents
Phenoxodiol and Ovarian
    Cancer
A team of scientists at Yale University School of
Medicine is currently conducting a Phase II clinical study.
The study is fully enrolled, using 40 patients with advanced,
metastatic ovarian cancer that has become unresponsive to at
least two standard chemotherapies (the average number of
different drug regimes used previously in these patients is
five per patient). Phenoxodiol is being administered as a
monotherapy by bolus intravenous injection on two consecutive
days per week in rising dosages (one, three, ten and
twenty mg/kg/24-hr) to four groups, each of ten women, over
treatment cycles of 12 weeks. Tumor response is being
assessed on the basis of tumor mass, levels of the tumor marker
(CA125) in the blood, survival over 12 months, and quality
of life.
This clinical trial is based on laboratory
studies at Yale University School of Medicine that showed
phenoxodiol to be the most effective drug at killing ovarian
cancer cells, including those that are resistant to all standard
anti-cancer drugs.
Following analysis of the data from the current
Phase II study, currently projected to be completed by
December 2003, a decision will be made concerning the next
stage.
A recent pre-clinical study also extended these
findings by showing that phenoxodiol proved highly effective at
restoring ovarian cancer cells' sensitivity to standard
anti-cancer drugs such as cisplatin. Cisplatin is a standard
drug used in the treatment of ovarian cancer, but patients'
tumors commonly become resistant to this drug after some months.
A combination of phenoxodiol and cisplatin proved highly
effective in stopping human ovarian cancer growth in animals
with doses of phenoxodiol and cisplatin that alone were
ineffective. This raises the prospect of obtaining an enhanced
clinical response of phenoxodiol by combining it with standard
chemotherapies, and the opportunity to conduct a combinational
drug trial in ovarian cancer patients is under review currently.
Phenoxodiol and Prostate
    Cancer
Two Australian hospitals are currently conducting
a study testing the effect of oral phenoxodiol therapy in
patients with late-stage prostate cancer that has become
unresponsive to hormonal therapy. Phenoxodiol is being
administered orally three times per day on a daily basis over
treatment cycles of 12 weeks. There will be
24 patients in this trial, with patients being allocated to
seven different dose levels (from 0.72 to 9.0 mg
per 24-hr). The study currently has 18 patients enrolled.
Phenoxodiol and Cutaneous SCC
The potential for phenoxodiol in the treatment of
cutaneous SCC arose from the observation that in patients being
treated for other forms of cancer who coincidentally had
aggressive, malignant SCC of the skin, the SCC tumors showed
objective responses within several weeks. A Phase II trial
is being conducted at an Australian hospital in 30 patients
with malignant SCC of the skin. Phenoxodiol is being
administered orally, three times daily for a period of three
months. We anticipate this study being completed by the third
quarter of 2004.
Competition
The clinical development and commercialization of
new anti-cancer drugs is highly competitive. As a developmental
stage pharmaceutical company, we compete with pharmaceutical and
biotechnology companies, academic and scientific institutions,
governmental agencies and public and private research
organizations.
Many pharmaceutical and biotechnology companies
have products or drug candidates in various stages of
pre-clinical or clinical development to treat prostate cancer,
ovarian cancer, SCC and other cancers. Some of these potentially
competitive drugs are further advanced in development and may
receive FDA or other regulatory approval and may be
commercialized earlier than phenoxodiol. Some of these drugs may
be directly competitive with phenoxodiol to the extent that they
would obviate the need for phenoxodiol.
29
Table of Contents
In other cases, however, these drugs or therapies
may not be competitive to the extent that they are not mutually
exclusive and could be used in conjunction with phenoxodiol.
Many pharmaceutical and biotechnology companies
are developing drugs specifically in the area of signal
transduction inhibition. Several such drugs have received
marketing approval over the past five years. While much of
the activity in this field is based on rational drug design,
meaning that the nature of action of such drugs is
overwhelmingly focused on individual signaling targets, it would
be reasonable to expect that attention will be drawn
increasingly to the development of drugs like phenoxodiol that
have activity against multiple targets.
The most significant competition potentially
might arise from the development of drugs with a related
chemical heritage to phenoxodiol. Two chemicals with a related
chemical heritage of an underlying flavonoid chemical structure
that we are aware of undergoing clinical development as
anti-cancer agents are genistein and flavopiridol
TM
.
Our understanding is that genistein is in Phase II clinical
studies, while flavopiridol
TM
is in Phase III
clinical studies.
Our competitors may develop and commercialize
products that are safer, less costly and more efficacious in the
treatment of cancers. In addition, we face and will continue to
face competition from companies, institutions, agencies and
organizations, including those in fields unrelated to drug
development, to recruit qualified personnel, attract partners
for joint ventures and license competitive technologies.
Many of our competitors have significantly
greater capital resources, larger research and development
staffs and facilities and greater experience in drug
development, regulation, manufacturing and marketing than we do
at present. In this respect, they may be able to more easily
develop technologies and products that would render our
technologies or our drug candidates obsolete or non-competitive.
Intellectual Property
Novogen has been granted patents and has
additional patents pending in a number of countries which cover
a family of chemically related compounds with potentially broad
ranging and complementary anti-cancer effects. Novogen has
granted to us an exclusive license with respect to its patent
rights and intellectual property know-how to develop, market and
distribute one of these compounds, phenoxodiol as an anti-cancer
agent, except in topical form.
See "Certain Relationships and Related
Transactions" for more information regarding our agreements
with Novogen.
We have licensed from Novogen the rights to the
Novogen patents and applications as they relate to phenoxodiol
as an anti-cancer agent. Excluded from these rights is
phenoxodiol in a topical formulation. The patent rights we have
licensed from Novogen can be largely classified into two broad
groups: patent rights relating to phenoxodiol used as an
anti-cancer agent, which we refer to as "product patent
rights", and patent rights relating to the manufacture of
phenoxodiol for anti-cancer purposes, which we refer to as
"manufacturing patent rights". The pending and issued
Novogen patent rights can be further broken down into four
families, three families belonging to the product patent rights
and one family belonging to the manufacturing patent rights: The
three families in the product patent rights comprise phenoxodiol
for the treatment of cancer (17 pending; six issued);
compositions and methods for protecting skin from ultraviolet
induced immunosuppression and skin damage including phenoxodiol
(10 pending; three issued); therapeutic methods and
compositions involving isoflav-3-ene and isoflavan structure
including phenoxodiol (PCT pending). The family relating to the
manufacturing patent rights relate to the production of
isoflavone derivatives including phenoxodiol (17 pending).
Novogen has recently received a notice of allowance from the
United States Patent and Trademark Office (USPTO) related to
phenoxodiol to treat a variety of cancers.
As patent applications in the United States are
maintained in secrecy until published or patents issue and as
publication of discoveries in the scientific or patent
literature often lag behind the actual discoveries, we cannot be
certain that Novogen was the first to make the inventions
covered by each Moreover, pursuant to the terms of the Uruguay
Round Agreements Act, patents filed on or after June 8,
30
Table of Contents
1995 have a term of twenty years from the date of
such filing, irrespective of the period of time it may take for
such patent to ultimately issue. This may shorten the period of
patent protection afforded to phenoxodiol as patent applications
in the biopharmaceutical sector often take considerable time to
issue. Under the Drug Price Competition and Patent Term
Restoration Act of 1984 (the "Patent Act"), a sponsor
may obtain marketing exclusivity for a period of time following
FDA approval of certain drug applications, regardless of patent
status, if the drug is a new chemical entity or if new clinical
studies were used to support the marketing application for the
drug. Pursuant to the FDA Modernization Act of 1997, the period
of exclusivity can be extended if the applicant performs certain
studies in pediatric patients. This marketing exclusivity
prevents a third party from obtaining FDA approval for an
identical or nearly identical drug under an Abbreviated New Drug
Application ("ANDA") or a "505(b)(2)" New
Drug Application. The statute also allows a patent owner to
obtain an extension of applicable patent terms for a period
equal to one-half the period of time elapsed between the filing
of an IND and the filing of the corresponding NDA plus the
period of time between the filing of the NDA and FDA approval,
with a five year maximum patent extension. We cannot be certain
that Novogen will be able to take advantage of either the patent
term extension or marketing exclusivity provisions of this law.
In order to protect the confidentiality of our
technology, including trade secrets and know-how and other
proprietary technical and business information, we require all
of our consultants, advisors and collaborators to enter into
confidentiality agreements that prohibit the use or disclosure
of information that is deemed confidential. The agreements also
oblige our consultants, advisors and collaborators to assign to
us developments, discoveries and inventions made by such persons
in connection with their work with us. We cannot be sure that
confidentiality will be maintained or disclosure prevented by
these agreements or that our proprietary information or
intellectual property will be protected thereby or that others
will not independently develop substantially equivalent
proprietary information or intellectual property.
The pharmaceutical industry is highly competitive
and patents have been applied for by, and issued to, other
parties relating to products competitive with phenoxodiol.
Therefore, phenoxodiol and any other drug candidates may give
rise to claims that they infringe the patents or proprietary
rights of other parties existing now and in the future. An
adverse claim could subject us to significant liabilities to
such other parties and/or require disputed rights to be licensed
from such other parties. We cannot be sure that any license
required under any such patents or proprietary rights would be
made available on terms acceptable to us, if at all. If we do
not obtain such licenses, we may encounter delays in product
market introductions, or may find that the development,
manufacture or sale of products requiring such licenses may be
precluded. We have not conducted any searches or made any
independent investigations of the existence of any patents or
proprietary rights of other parties.
Relationship with Novogen
Novogen has been granted patents and has
additional patent applications pending in a number of countries
pertaining to phenoxodiol's family of compounds and to
phenoxodiol itself and their use in anti-cancer therapeutics.
Novogen has granted us an exclusive license under its patent
rights and the intellectual property rights in its relevant
know-how to develop, market and distribute all forms of
administering phenoxodiol for anti-cancer applications, except
topical applications.
Novogen is active in the discovery and
development of new drugs based on the emerging field of signal
transduction regulation. Signal transduction regulators offer
the potential for effective, well-tolerated treatment of common
degenerative diseases including cancer and heart disease.
Novogen has developed a family of chemically related compounds
with potentially broad ranging and complementary anti-cancer
effects.
We have entered into certain key agreements with
Novogen. These agreements are discussed briefly below. Investors
should also read the detailed summary of these documents set out
in "Certain Relationships and Related Transactions."
Under an amended and restated license agreement,
Novogen granted us an exclusive world-wide, non-transferable
license, under the Novogen patent rights, to conduct clinical
trials and commercialize and
31
Table of Contents
distribute all forms of administering phenoxodiol
except topical applications. The agreement covers uses of
phenoxodiol in the field of prevention, treatment or cure of
cancer in humans.
Under an amended and restated manufacturing
license and supply agreement, Novogen assumes responsibility for
the supply of phenoxodiol in its primary manufactured form for
both the research and development program and phenoxodiol's
ultimate commercial use. Novogen has a pilot phenoxodiol
manufacturing plant which we believe has sufficient capacity to
meet the projected amount of phenoxodiol required to complete
the proposed clinical program.
Under an amended and restated license option
deed, Novogen granted us an exclusive first right to accept and
an exclusive last right to match any proposed dealing by Novogen
with its intellectual property rights in other synthetic
compounds developed by Novogen that have known or potential
anti-cancer applications in all forms other than topical
applications.
Pursuant to an amended and restated services
agreement, Novogen will provide services reasonably required by
us relating to the development and commercialization of
phenoxodiol. We do not currently intend to directly employ any
staff and are reliant on Novogen for the provision of resources
to conduct our business.
Commercialization
Commercialization of a drug requires approval
from the regulatory body of each country in which the drug is to
be marketed. Following the completion of Phase III studies, the
data gathered from the clinical trial program must be collated
for presentation to the appropriate regulatory authorities in
each territory in a form acceptable to each authority, in order
to obtain the relevant regulatory approvals to market the drug
in that territory. Approval usually is granted for those
specific cancer indications for which the clinical data supports
efficacy.
We may choose to seek regulatory approval in our
own right in any or all territories. Alternatively, we may seek
to establish a strategic partnership with another pharmaceutical
company to market phenoxodiol in certain territories, in which
case that partner may take responsibility for application for
regulatory approval.
Successful commercialization requires high
quality marketing campaigns and distribution arrangements in
order to gain market share as fast as possible. Global
pharmaceutical companies have large and professional marketing
and distribution functions that regularly introduce new drugs
throughout the world. For that reason, we are likely to choose
to seek a strategic partnership in any or all territories in
which phenoxodiol is to be marketed.
Decisions on both the appropriate territories in
which regulatory approval will be sought and the nature of
commercialization in those territories will be made by the board
of directors at the appropriate time and with due regard to
maximizing the commercial benefit to us.
The most significant market for phenoxodiol is
the United States market. Before a drug is granted regulatory
approval to be marketed and commercialized in the United States,
the drug must gain approval to be tested in humans. In the
United States, this requires the FDA to grant the drug IND
status. See "— Regulation-U.S. Regulatory
Requirements." Phenoxodiol has achieved this status and has
commenced clinical trials in the United States.
Research and Development
The objective of our research and development
program is the generation of data sufficient to achieve
regulatory approval of phenoxodiol in one or more dosage forms
in major markets such as the United States, and/or to allow us
to enter into a commercial relationship with another party. The
data is generated by our clinical trial programs.
32
Table of Contents
The key aspects of this program are to provide
more complete characterization of the following:
•
the relevant molecular targets of action of
    phenoxodiol;
•
the relative therapeutic indications of different
    dosage forms of phenoxodiol;
•
the relative therapeutic benefits and indications
    of phenoxodiol as a monotherapy or as part of combinational
    therapy with other chemotoxics; and
•
the most appropriate cancer targets for
    phenoxodiol.
Regulation
U.S. Regulatory Requirements
The U.S. Food and Drug Administration, or FDA,
and comparable regulatory agencies in foreign countries regulate
and impose substantial requirements upon the research,
development, preclinical and clinical testing, labeling,
manufacture, quality control, storage, approval, advertising,
promotion, marketing, distribution, and export of pharmaceutical
products, including biologics, as well as significant reporting
and record-keeping obligations. State governments may also
impose obligations in these areas.
In the United States, pharmaceutical products are
regulated by the FDA under the Federal Food, Drug, and Cosmetic
Act, or FDCA, and other laws, including in the case of
biologics, the Public Health Service Act. We believe, but cannot
be certain, that our products will be regulated as biologics and
drugs by the FDA. The process required by the FDA before
biologics or drugs may be marketed in the United States
generally involves the following:
•
preclinical laboratory evaluations, including
    formulation and stability testing, and animal tests performed
    under the FDA's Good Laboratory Practices regulations to
    assess potential safety and effectiveness;
•
submission and approval of an IND, including
    results of preclinical tests and protocols for clinical tests,
    which must become effective before clinical trials may begin in
    the United States;
•
obtaining approval of Institutional Review Boards
    to administer the products to human subjects in clinical trials;
•
adequate and well-controlled human clinical
    trials to establish the safety and efficacy of the product for
    the product's intended use;
•
development of manufacturing processes which
    conform to FDA current Good Manufacturing Practices, or cGMPs,
    as confirmed by FDA inspection;
•
submission of preclinical and clinical test
    results, and chemistry, manufacture and control information on
    the product to the FDA in a New Drug Approval Application, or
    NDA; and
•
FDA review and approval of an NDA, prior to any
    commercial sale or shipment of a product.
The testing and approval process requires
substantial time, effort, and financial resources, and we cannot
be certain that any approval will be granted on a timely basis,
if at all.
The results of the preclinical tests, together
with initial specified manufacturing information, the proposed
clinical trial protocol, and information about the participating
investigators, are submitted to the FDA as part of an IND, which
must be approved before we may begin human clinical trials.
Additionally, an independent Institutional Review Board at each
clinical trial site proposing to conduct the clinical trials
must review and approve each study protocol and oversee conduct
of the trial. An IND becomes effective 30 days after
receipt by the FDA, unless the FDA, within the 30-day period,
raises concerns or questions about the conduct of the trials as
outlined in the IND and imposes a clinical hold. If the FDA
imposes a clinical hold, the IND sponsor must resolve the
FDA's concerns before clinical trials can begin.
Pre-clinical tests and studies can take several years to
complete, and there is no guarantee that an IND we submit based
on such tests and studies will become effective within any
specific time period, if at all.
33
Table of Contents
Human clinical trials are typically conducted in
three sequential phases that may overlap:
•
Phase I:
The
    drug is initially introduced into healthy human subjects or
    patients and tested for safety and dosage tolerance. Absorption,
    metabolism, distribution, and excretion testing is generally
    performed at this stage.
•
Phase II:
The
    drug is studied in controlled, exploratory therapeutic trials in
    a limited number of subjects with the disease or medical
    condition for which the new drug is intended to be used in order
    to identify possible adverse effects and safety risks, to
    determine the preliminary or potential efficacy of the product
    for specific targeted diseases or medical conditions, and to
    determine dosage tolerance and the optimal effective dose.
•
Phase III:
When
    Phase II studies demonstrate that a specific dosage range
    of the drug is likely to be effective and the drug has an
    acceptable safety profile, controlled, large-scale therapeutic
    Phase III trials are undertaken at multiple study sites to
    demonstrate clinical efficacy and to further test for safety in
    an expanded patient population.
We cannot be certain in that we will successfully
complete Phase I, Phase II, or Phase III testing
of our products within any specific time period, if at all.
Furthermore, the FDA, the Institutional Review Board or we may
suspend or terminate clinical trials at any time on various
grounds, including a finding that the subjects or patients are
being exposed to an unacceptable health risk.
Results of pre-clinical studies and trials, as
well as detailed information about the manufacturing process,
quality control methods, and product composition, among other
things, are submitted to the FDA as part of an NDA seeking
approval to market and commercially distribute the product on
the basis of a determination that the product is safe and
effective for its intended use. NDAs are used for products that
are regulated as drugs, such as synthetic chemicals. Before
approving an NDA, the FDA will inspect the facilities at which
the product is manufactured and will not approve the product
unless cGMP compliance is satisfactory. If applicable regulatory
criteria are not satisfied, the FDA may deny the NDA or require
additional testing or information. As a condition of approval,
the FDA also may require post-marketing testing or surveillance
to monitor the product's safety or efficacy. Even after an
NDA is approved, the FDA may impose additional obligations or
restrictions (such as labeling changes), or even suspend or
withdraw a product approval on the basis of data that arise
after the product reaches the market, or if compliance with
regulatory standards is not maintained. We cannot be certain
that any NDA we submit will be approved by the FDA on a timely
basis, if at all. Also, any such approval may limit the
indicated uses for which the product may be marketed. Any
refusal to approve, delay in approval, suspension or withdrawal
of approval, or restrictions on indicated uses could have a
material adverse impact on our business prospects.
Each NDA must be accompanied by a user fee,
pursuant to the requirements of the Prescription Drug User Fee
Act, or PDUFA, and its amendments. According to the FDA's
fee schedule, effective on October 1, 2003 for the fiscal
year 2004, the user fee for an application requiring clinical
data, such as an NDA, is $573,500. The FDA adjusts the PDUFA
user fees on an annual basis. PDUFA also imposes an annual
product fee for prescription drugs and biologics ($36,080 for
the fiscal year 2004), and an annual establishment fee
($226,800) on facilities used to manufacture prescription drugs
and biologics. We are not at the stage of development with our
products where we are subject to these fees, but they are
significant expenditures that will be incurred in the future and
must be paid at the time of application submission to the FDA.
Satisfaction of FDA requirements typically takes
several years. The actual time required varies substantially,
based upon the type, complexity, and novelty of the
pharmaceutical product, among other things. Government
regulation imposes costly and time-consuming requirements and
restrictions throughout the product life cycle and may delay
product marketing for a considerable period of time, limit
product marketing, or prevent marketing altogether. Success in
pre-clinical or early stage clinical trials does not assure
success in later stage clinical trials. Data obtained from
preclinical and clinical activities is not always conclusive and
may be susceptible to varying interpretations that could delay,
limit, or prevent
34
Table of Contents
marketing approval. Even if a product receives
marketing approval, the approval is limited to specific clinical
indications. Further, even after marketing approval is obtained,
the discovery of previously unknown problems with a product may
result in restrictions on the product or even complete
withdrawal of the product from the market.
After product approval, there are continuing
significant regulatory requirements imposed by the FDA,
including record-keeping requirements, obligations to report
adverse experiences, and restrictions on advertising and
promotional activities. Quality control and manufacturing
procedures must continue to conform to cGMPs, and the FDA
periodically inspects facilities to assess cGMP compliance.
Additionally, post-approval changes in product indications,
manufacturing processes or facilities, product labeling, or
other areas may require submission of an NDA Supplement to the
FDA for review and approval. Failure to comply with FDA
regulatory requirements may result in an enforcement action by
the FDA, including Warning Letters, product recalls, suspension
or revocation of product approval, seizure of product to prevent
distribution, impositions of injunctions prohibiting product
manufacture or distribution, and civil and criminal penalties.
Maintaining compliance is costly and time-consuming.
Nonetheless, we cannot be certain that we, or our present or
future suppliers or third-party manufacturers, will be able to
comply with all FDA regulatory requirements, and potential
consequences of noncompliance could have a material adverse
impact on our business prospects.
The FDA's policies may change, and
additional governmental regulations may be enacted that could
delay, limit, or prevent regulatory approval of our products or
affect our ability to manufacture, market, or distribute our
products after approval. Moreover, increased attention to the
containment of healthcare costs in the United States and in
foreign markets could result in new government regulations that
could have a material adverse effect on our business. Our
failure to obtain coverage, an adequate level of reimbursement,
or acceptable prices for our future products could diminish any
revenues we may be able to generate. Our ability to
commercialize future products will depend in part on the extent
to which coverage and reimbursement for the products will be
available from government and health administration authorities,
private health insurers, and other third-party payors. European
Union and U.S. government and other third-party payors
increasingly are attempting to contain healthcare costs by
consideration of new laws and regulations limiting both coverage
and the level of reimbursement for new drugs. We cannot predict
the likelihood, nature or extent of adverse governmental
regulation that might arise from future legislative or
administrative action, either in the United States or abroad.
Our activities also may be subject to state laws
and regulations that affect our ability to develop and sell our
products. We are also subject to numerous federal, state, and
local laws relating to such matters as safe working conditions,
clinical, laboratory, and manufacturing practices, environmental
protection, fire hazard control, and disposal of hazardous or
potentially hazardous substances. We may incur significant costs
to comply with such laws and regulations now or in the future,
and the failure to comply may have a material adverse impact on
our business prospects.
Australian Regulatory
    Requirements
The
Therapeutic Goods Act 1989
, or 1989
Act, sets out the legal requirements for the import, export,
manufacture and supply of pharmaceutical products in Australia.
The 1989 Act requires that all pharmaceutical products to be
imported into, supplied in, or exported from Australia be
included in the Australian Register of Therapeutic Goods, or
ARTG, unless specifically exempted under the Act.
In order to ensure that a product can be included
in the ARTG, a sponsoring company must make an application to
the Therapeutic Goods Administration, or TGA. The application
usually consists of a form accompanied by data (based on the
European Union requirements) to support the quality, safety and
efficacy of the drug. In the case of drugs for important medical
conditions the TGA will accept either European or American
dossier format in an attempt to expedite the registration
process.
The first phase of evaluation, known as the
Application Entry Process, is usually a short period during
which an application is assessed on an administrative level to
ensure that it complies with the basic
35
Table of Contents
guidelines. The TGA must decide within
40 working days whether it will accept the application for
evaluation.
Once an application is accepted for evaluation,
aspects of the data provided are allocated to evaluators, who
prepare evaluation reports. Following this evaluation, the
chemistry and quality control aspects of a product may be
referred to a sub-committee of the Australian Drug and
Evaluation Committee, or ADEC to review the evaluation reports.
The evaluation reports are then sent to the sponsoring company
who then has the opportunity to comment on the views expressed
within the evaluation report and to submit supplementary data to
address any issues raised in the evaluation reports.
Once the evaluations are complete, the TGA
prepares a summary document on the key issues on which advice
will be sought from the ADEC. This summary is sent to the
sponsoring company which is able to submit a response to the
ADEC dealing with issues raised in the summary and those not
previously addressed in the evaluation report. The ADEC provides
advice on the quality, risk-benefit, effectiveness and access of
the drug and conduct medical and scientific evaluations of the
application. The ADEC's resolutions are provided to the
sponsoring company after 5 working days.
The TGA takes into account the advice of the ADEC
in reaching a decision to approve or reject a product. Any
approval for registration on the ARTG may have conditions
associated with it.
From the time that the TGA accepts the initial
application for evaluation, the TGA must complete the evaluation
and make a decision on the registration of the product within
255 working days. The TGA also has a system of priority
evaluation for products that meet certain criteria, including
where the product is a new chemical entity that it is not
otherwise available on the market as an approved product, and is
for the treatment of a serious, life-threatening illness for
which other therapies are either ineffective or not available.
European Union Regulatory
    Requirements
Outside the United States, our ability to market
our products will also be contingent upon receiving marketing
authorizations from the appropriate regulatory authorities and
compliance with applicable post-approval regulatory
requirements. Although the specific requirements and
restrictions vary from country to country, as a general matter,
foreign regulatory systems include risks similar to those
associated with FDA regulation, described above. Under EU
regulatory systems, marketing authorizations may be submitted
either under a centralized or decentralized procedure. Under the
centralized procedure, a single application to the European
Medicines Evaluation Agency (EMEA) lead to an approval
granted by the European Commission which permits the marketing
of the product throughout the EU. We assume that the centralized
procedure will apply to our products that are developed by means
of a biotechnology process. The decentralized procedure provides
for mutual recognition of nationally approved decisions and is
used for products that do not qualify under the centralized
procedure. Under the decentralized procedure, the holders of a
national marketing authorization may submit further applications
to the competent authorities of the remaining members states
which will then be requested to recognize the original
authorization based upon an assessment report prepared by the
original authorizing competent authority. The recognition
process should take no longer than 90 days, but if one
member state makes an objection, which under the legislation can
only be based on a possible risk to human health, we have the
option to withdraw the application from that country or take the
application to arbitration by the Committee for Proprietary
Medicinal Products (CPMP) of the EMEA. If a referral for
arbitration is made, the procedure is suspended, and in the
intervening time, the only EU country in which the product can
be marketed will be the country where the original authorization
has been granted, even if all the other designated countries are
ready to recognize the product. The opinion of the CPMP, which
is binding, could support or reject the objection or
alternatively could reach a compromise position acceptable to
all EU countries concerned. Arbitration can be avoided if the
application is withdrawn in the objecting country, but once the
application has been referred to arbitration, it cannot be
withdrawn. The arbitration procedure may take an additional year
before a final decision is reached and may require the delivery
of additional data.
36
Table of Contents
As with FDA approval, we may not be able to
secure regulatory approvals in Europe in a timely manner, if at
all. Additionally, as in the United States, post-approval
regulatory requirements, such as those regarding product
manufacture, marketing, or distribution, would apply to any
product that is approved in Europe, and failure to comply with
such obligations could have a material adverse effect on our
ability to successfully commercialize any product.
There has recently been introduced in Europe new
legislation designed to harmonise the regulation of clinical
trials across the EU and that legislation is currently being
implemented on a country by country basis. In addition, new
proposals are under advanced consideration which, if brought
into law, will effect substantial and material changes to the
regulation of medicinal products in Europe. Accordingly, there
is a marked degree of change and uncertainty both in the
regulation of clinical trials and in respect of marketing
authorisations which face us in seeking for our products in
Europe.
Government Funding
Novogen received financial support for the
phenoxodiol drug program from the Australian government under
what is known as the START Program. The START Program is a
merit-based program designed to encourage and assist Australian
companies to undertake research and development and
commercialization through a range of grants and loans. The START
Program is administered by the Industry Research and
Development, or IR&D Board. The IR&D Board is made up of
private sector and academic members with expertise and
experience in research and development and commercialization. In
1998, the Australian government agreed to provide
A$2.7 million (approximately U.S. $1.8 million)
enabling Novogen to expedite phenoxodiol into clinical trials,
provided that the grant money was matched by an equal
expenditure by Novogen. The START grant was awarded after the
government's review of the pertinent research results, the
intellectual property driving the program, and the likelihood
and potential for commercial success of the drug.
The terms of the grant require Novogen to obtain
the consent of the Australian government to deal with the
intellectual property rights which have arisen through the
program conducted to date. Novogen has obtained the consent of
the Australian government to the grant of the license to us and
to the other arrangements between us and Novogen concerning the
development and commercialization of phenoxodiol.
Novogen believes that it has fulfilled all of its
obligations under the terms of the START Program and expects to
continue to do so in the future. For additional information on
the consequences to us in the event Novogen fails to comply with
its obligations under the START Program, see the
"Intellectual Property" and "Risk Factors"
sections of this prospectus.
Employees
We do not have any employees. Novogen provides us
with staff and other financial and administrative services under
our service agreement with Novogen.
Facilities
We do not own or lease any facility. Novogen
provides us with space for our corporate headquarters.
Legal proceedings
We are not currently a party to any material
legal proceedings.
37
Table of Contents
MANAGEMENT
Directors and Executive Officers
The following sets forth information for each of
our directors and executive officers.
Dr. Graham Edmund Kelly, PhD, aged 57,
    Chairman, Director
Dr. Kelly was appointed as our Chairman in
April 2001. Dr. Kelly founded Novogen in 1992 and has
spent nearly 30 years in medical research involving drug
development, immunology, surgery and cancer. Dr. Kelly was
a senior research fellow in experimental surgery in the Faculty
of Medicine at the University of Sydney from 1972 to 1994. He
developed the b-1, 3-glucan and isoflavone intellectual property
now owned by the Novogen Group. Dr. Kelly was Executive
Chairman of Novogen between 1997 and 2000 and continues to act
as project leader for phenoxodiol. Dr. Kelly's term as
one of our directors expires in 2005.
Christopher Naughton, aged 50, President
    and CEO, Director
Mr. Naughton has been our President and CEO
since our inception in December 2000. He also has been the
Managing Director of Novogen since March 1997.
Mr. Naughton has degrees in Economics from the Australian
National University and in Law from the University of New South
Wales. He has completed the Program for Management Development
at the Harvard Business School and is admitted to practice as an
attorney in New South Wales. After working in merchant banking,
he has spent the last 18 years in the pharmaceutical
industry including appointments as a Director of Wellcome
Australia Limited and in world wide business development with
the Wellcome Foundation Limited in the UK.
Mr. Naughton's term as one of our directors expires in
2005.
Philip Andrew Johnston, aged 56,
    Director
Mr. Johnston has been one of our directors
since April 2001. Mr. Johnston has had more than
25 years' experience in the pharmaceutical industry.
He has been a Non-Executive Director of Novogen since
January 1997, and Chairman of Novogen since
January 2001. Mr. Johnston spent nine years as an
Executive Director of Wellcome Australia Limited from June 1988
to September 1997. He was previously Director of two subsidiary
companies of GlaxoWellcome. His responsibilities have
encompassed production, distribution, quality assurance and
consumer product development and he has been directly involved
in the establishment of strategic alliances and joint ventures.
Mr. Johnston has completed a number of executive
development programs including programs at the University of NSW
and the London Business School. Mr. Johnston's term as
one of our directors expires in 2004.
Professor David Morritz de Kretser, aged
    64, Director
Professor de Kretser has been one of our
Directors since April 2001. Professor de Kretser has been active
in medicine and research for over 30 years, taking on roles
including Professor of the Department of Anatomy, Monash
University, where he has served as a professor since 1978.
Professor de Kretser has been the Executive Chair of the Monash
Institutes of Health and Associate Dean For Biotechnology
Development at Monash University since July 2001 and the
Director of the Australian Centre for Excellence in Male
Reproductive Health since July 2001. He was the Founding
Director of the Monash Institute of Reproduction and Development
and remains as the Director of the Centre for Molecular
Reproduction and Endocrinology within the institute. He has
served on numerous international and national committees dealing
with research and has experience on a number of professional
editorial boards. He has published over 400 research papers and
has been invited to speak at numerous national and international
conferences and symposiums on topics such as fertility,
andrology and endocrinology. Professor de Kretser's
research has led to a number of patents in Australia and
overseas. He is an Officer of the Order of Australia, a Fellow
of the Australian Academy of Science and a Fellow of the
Australian
38
Table of Contents
Academy of Technological Sciences and
Engineering. Professor de Kretser's term as one of our
directors expires in 2003.
Professor Paul John Nestel, aged 73,
    Director
Professor Nestel has been one of our directors
since April 2001. Professor Nestel has been a non-executive
Director of Novogen since September 2001. Since January 1995, he
has been Senior Principal Research Fellow and Head of the
Cardiovascular Nutrition laboratory at the Baker Medial Research
Institute, Victoria. Professor Nestel has also been Consultant
Physician at the Alfred Hospital, Melbourne since January 1995.
He is president of the International Life Sciences Institute
(Australasia) and a member of the board of directors of ILSI
South East Asia. He was formerly Clinical Professor in Medicine,
The Flinders University of South Australia. Professor Nestel is
an Officer of the Order of Australia. Professor Nestel's
term as one of our directors expires in 2004.
Stephen Breckenridge, aged 60,
    Director
Mr. Breckenridge has been one of our
directors since August 2003. Mr. Breckenridge has had over
25 years experience in public practice as a Chartered
Accountant in Australia and since 2001, has been Managing
Director of Breckenridge Consulting Pty Ltd which provides
independent tax and management advice to multi-nationals and
SME's. Until 2001, Mr. Breckenridge was a tax partner
for 24 years with KPMG in Sydney where he provided
corporate tax advice to a wide cross section of business in
Australia and overseas with particular emphasis in more latter
years on international transfer pricing. Mr. Breckenridge
has also been involved in the pharmaceutical and chemical
industries over a long period including serving on several
industry association committees and leading industry focus
groups within KPMG. Mr. Breckenridge holds a Master of Tax
degree from the University of Sydney and is a Fellow of the
Institute of Chartered Accountants and the Taxation Institute of
Australia. Mr. Breckenridge was appointed to our board of
directors on August 1, 2003 and his term as one of our
directors expires in 2003.
David Ross Seaton, aged 49, Chief Financial
    Officer
Mr. Seaton has been our Chief Financial
Officer and Company Secretary since September 1999 and has been
the Chief Financial Officer of Novogen since December 2000. He
holds a degree in Business Studies as well as a Master of
Commerce degree from the University of New South Wales. He has
completed management development programs at Northwestern
University in Chicago as well as Duke University and the London
Business School. He has 18 years experience in the
pharmaceutical industry. Prior to joining Novogen in 1999 was
the Finance Director of GlaxoWellcome Australia Limited from
1995 to 1999.
Corporate Governance
Board of Directors
Our board of directors has responsibility for our
overall corporate governance and meets regularly throughout the
year.
Four of our six existing board members are also
currently directors of Novogen. We are a "controlled
corporation" within the meaning given to that term by
Nasdaq because Novogen owns more than 50% of our voting power.
As a controlled corporation, we are exempt from the requirement
that our board be composed of a majority of independent
directors.
The board has established an Audit Committee to
oversee our financial matters and a Remuneration Committee to
review the performance of executive directors and their
remuneration.
Audit Committee
The Audit Committee is responsible for overseeing
our financial and accounting activities, including external
audits and accounting functions. The Audit Committee meets at
least twice each year. The Audit
39
Table of Contents
Committee's responsibilities include the
annual appointment of our outside auditors and the review of the
scope of audit and non-audit assignments and related fees, the
accounting principles we use in financial reporting, internal
auditing procedures and the adequacy of our internal control
procedures. The members of the Audit Committee are
Mr. Breckenridge (chairman), Mr. Johnston and
Professor de Kretser, all of whom are independent as defined by
applicable and proposed Nasdaq and SEC rules. Stephen
Breckenridge is an audit committee financial expert as defined
by SEC rules.
Remuneration Committee
The Remuneration Committee reviews the
performance of executive directors and sets their remuneration.
The Remuneration Committee also has the power to make
recommendations to the full board concerning the allocation of
share options to directors and employees. The remuneration and
terms of appointment of non-executive directors will be set by
our board of directors. The members of the Remuneration
Committee are Mr. Johnston, Professor de Kretser and Mr.
Breckenridge.
Director and Executive Compensation
Directors
Our directors, other than Dr. Kelly and
Mr. Naughton, receive directors fees of $A30,000
(approximately US$19,000) per annum from us. Dr. Kelly and
Mr. Naughton do not receive any remuneration for performing
their duties as our directors.
Executive Officers
Our executive officers, Dr. Kelly,
Mr. Naughton and Mr. Seaton, are also executive
officers of Novogen and do not receive any remuneration directly
from us in performing their duties as our executive officers. At
the present time, their services are provided to us pursuant to
the services agreement with Novogen.
Share Option Plan
We have adopted a share option plan. As of the
date of this prospectus, no options were outstanding under the
share option plan and we have no present intention of granting
any options under the share option plan. We expect that the
board would authorize our remuneration committee to oversee the
plan, but no such action has been taken. The following is a
summary of the plan.
The plan provides our directors, employees,
employees of our affiliates and certain of our contractors and
consultants with the opportunity to participate in our ownership.
The committee will address participation, the
number of options offered and any conditions of exercise. In
making these determinations the committee will generally
consider the participant's position and record of service
to us and our affiliates and potential contribution to the
growth of us and our affiliates. Any other matters tending to
indicate the participant's merit may also be considered.
Options will be exercisable between two years and
five years after grant, unless otherwise determined by the
committee appointed by the board. Options granted will be
exercisable at a price determined by the committee at the time
of issue (and will be subject to adjustment in accordance with
the terms of the plan).
Other key terms of the plan include:
•
options will lapse if the participants cease to
    be engaged by us or our affiliates. The committee will have the
    discretion to waive this provision;
•
the terms of the plan also provide for
    adjustments to the rights of an option holder as a result of a
    reorganization of our capital or other corporate event. The
    holder of an option is not permitted to participate in any
    distributions by us or in any rights or other entitlements
    issued by us to
40
Table of Contents
stockholders in respect of our shares unless the
    options are exercised prior to the relevant record date; and
•
all options vest on the occurrence of certain
    events such as a change of control, as defined in the share
    option plan.
The plan also contains commonly found provisions
dealing with matters such as administration of the plan,
amendment of the plan and termination or suspension of the plan.
41
Table of Contents
BENEFICIAL OWNERSHIP OF COMMON STOCK
None of our directors or executive officers own
any shares of our capital stock. The following table sets forth
information with respect to the beneficial ownership of our
common stock by owners of more than 5% of our common stock as of
September 24, 2003. The person named in this table has sole
voting and investment power with respect to the shares of common
stock shown.
Number Beneficially
Percentage of
Owned Before and
Shares Beneficially
Percentage of Shares
Name and Address of
After this Offering
Owned Before this
Beneficially Owned
Beneficial Owner
of Shares
Offering
After this Offering
Novogen Limited
49,500,000
95.1
%
91.6
%
140 Wicks Road
North Ryde 2113
Australia
42
Table of Contents
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Our key assets include the agreements we have
entered into with Novogen. These agreements are each summarized
below. The following description is only a summary of what we
believe are the material provisions of the agreements. Copies of
the agreements have been filed with the Securities and Exchange
Commission as exhibits to the registration statement of which
this prospectus forms a part.
The Amended and Restated License
Agreement
General
Novogen's subsidiary, Novogen Research Pty
Limited, has granted our subsidiary, Marshall Edwards Pty
Limited, a world-wide, non-transferable license under its
patents and patent applications and in its licensed know-how to
conduct clinical trials and commercialize and distribute
phenoxodiol products. We and Novogen have each guaranteed the
obligations of our respective subsidiaries under this license
agreement. The license is exclusive until the expiration or
lapsing of the last relevant Novogen patents or patent
applications in the world, and thereafter is non-exclusive for
the remainder of the term of the agreement. The license grants
us the right to make, have made, market, distribute, sell, hire
or otherwise dispose of phenoxodiol products in the field of
prevention, treatment or cure of cancer in humans by
pharmaceuticals delivered in all forms except topical
applications.
We are obliged to continue current, and undertake
further, clinical trials of phenoxodiol, and are responsible for
paying for all materials necessary to conduct clinical trials,
must conduct all such trials diligently and professionally, must
use reasonable endeavors to design and conduct clinical trials
to generate outcomes which are calculated to result in
regulatory approval of phenoxodiol products, and must keep
proper records of all clinical trials and allow Novogen to
inspect those records.
All intellectual property rights in the
medication, trial protocols, results of the clinical trials,
case report forms and any other materials used in the conduct of
the clinical trials are assigned by us to Novogen and we must
not publish the results of clinical trials without the prior
written consent of Novogen.
We may not sub-license, sub-contract, or engage
agents without the prior written consent of Novogen. Any
proposed sub-contractors and agents must first agree in writing
to comply with certain confidentiality obligations and to assign
to Novogen all intellectual property rights in the Field created
or acquired by them in the course of their engagement.
Marketing and
    Commercialization
We may market and commercialize phenoxodiol
products under the license in any manner we think fit, so long
as we conduct any marketing and commercialization activities on
a commercially reasonable basis in compliance with applicable
laws and regulations, comply with reasonable directions given by
Novogen, act in a manner which we consider to be most beneficial
to the interests of us and Novogen, and otherwise act in good
faith to Novogen. All advertising and promotional material must
be submitted to Novogen for prior approval.
Fees, Charges and Costs
The following table summarizes our responsibility
for fees, charges and costs under the license agreement.
Payee
Fee/Cost
Description
Novogen
License Fees
During the exclusivity period:
• 2.5% of the net sales of phenoxodiol
    products (invoice price less trade discounts and returns taken);
    and
43
Table of Contents
Payee
Fee/Cost
Description
• 25% of all gross income received by
    or on behalf of us (or our affiliates other than Novogen) from
    the assignment, sublicensing or other dealing with our rights
    under the agreement, which we refer to as commercialization
    income.
After the exclusivity period, 1.5% of all net
    sales of phenoxodiol products on the basis described above.
Novogen
First lump sum license fee
A lump sum license fee of $5 million is
    payable on the later of November 1, 2002 or the date on
    which the cumulative total of the funds (debt or equity)
    received by us or our affiliates other than Novogen and the
    income derived by us or our affiliates other than Novogen and
    from sales of phenoxodiol products or commercialization income
    exceeds $25 million.
Novogen
Second lump sum
license Fee
A further lump sum license fee of $5 million is
    payable on the later of November 1, 2003 or the date on
    which the cumulative total of the funds (debt or equity)
    received by us or our affiliates other than Novogen and the
    income derived by us or our affiliates other than Novogen from
    sales of phenoxodiol products or commercialization income
    exceeds $50 million.
Novogen
Annual License Fees
For each calendar year set out below for the
    duration of the exclusivity period, the annual license fees are:
• calendar year ending
    December 31, 2003: $1 million;
• calendar year ending
    December 31, 2004: $2 million;
• calendar year ending
    December 31, 2005: $4 million; and
• each calendar year following the year
    ending December 31, 2005: $8 million,
less any amount payable to Novogen during that
    calendar year pursuant to the first lump sum license fee
    referred to above.
Novogen
Patent Costs
We must reimburse Novogen one half of the costs
    of filing, prosecution and maintenance of the licensed patent
    rights.
Novogen
Goods and Service Tax
Any goods and services tax payable on any amounts
    paid under the agreement.
Various
Withholding Tax
We must pay the amount of any withholding taxes
    payable in any country and must gross-up any royalties withheld.
Interest accrues daily on the outstanding balance
of all overdue amounts payable to Novogen under the license
agreement.
Termination
We may terminate the license agreement at any
time, by giving three months' notice to Novogen. We may
also terminate the agreement if Novogen commits a breach of any
of its material obligations under the agreement, becomes the
subject of certain bankruptcy proceedings or is unable to
lawfully perform its obligations. Novogen may terminate the
agreement if we commit a breach of any of our material
44
Table of Contents
obligations under the agreement, become the
subject of certain bankruptcy proceedings or are unable to
lawfully perform our obligations. Novogen may also terminate the
agreement immediately if a change of control, as defined in the
license agreement, occurs without the consent of Novogen.
The Amended and Restated Manufacturing License
and Supply Agreement
Our subsidiary, Marshall Edwards Pty Limited has
granted to Novogen's subsidiary, Novogen Laboratories Pty
Limited, an exclusive, non-transferable sub-license to
manufacture and supply phenoxodiol to us in its primary
manufactured form. We and Novogen have each guaranteed the
obligations of our respective subsidiaries under this
manufacturing license and supply agreement. Novogen must not
sublicense its rights or engage agents or subcontractors to
exercise its rights or perform its obligations under the
agreement without our prior written consent.
Supply of
Phenoxodiol
We provide to Novogen rolling forecasts quarterly
of our estimated supply requirements for phenoxodiol, and issue
purchase orders for phenoxodiol to Novogen specifying the volume
of phenoxodiol required. Novogen must confirm the quantity it is
able to supply to fulfill the purchase order within 5 business
days of receiving the purchase order. Novogen must then supply
the volume of phenoxodiol it agreed to supply, and must
otherwise use all reasonable endeavors to fulfill the purchase
order. Novogen must manufacture and deliver phenoxodiol to us at
a port nominated by us. Title to the phenoxodiol does not pass
to us until we have paid the purchase price (as described below)
and retention of title arrangements apply.
If Novogen materially and persistently fails to
supply the amount of phenoxodiol ordered by us by the required
date, we may manufacture (or engage a third party, without
Novogen's consent, to manufacture) the amount of the
shortfall of phenoxodiol until Novogen demonstrates that it is
able to consistently supply phenoxodiol in accordance with our
requirements. In this case, Novogen must take all reasonable
steps to make available to us or the third party, on commercial
terms, the know-how necessary to enable that manufacture to
occur.
Fees and
Charges
The purchase price for phenoxodiol supplied is
the total costs to Novogen, plus a mark-up of 50%. The purchase
price may be adjusted quarterly by Novogen by reference to the
actual costs referred to above for the preceding quarter. If at
any time we do not pay any amount due to Novogen, Novogen may
suspend the supply of phenoxodiol to us until payment is
received.
Manufacturing
Developments and Improvements
Each party must disclose to the other any new
developments, improvements and new know-how relating to the
manufacture of phenoxodiol which are made or acquired by it
during the term of the agreement. All intellectual property
rights in developments, improvements and new know-how made or
acquired by Novogen are to be assigned to us. We must provide to
Novogen such technical information and assistance as Novogen
laboratories reasonably requests in order to exercise its rights
and perform its obligations.
Each party acknowledges that nothing in the
agreement shall have the effect of transferring or assigning to
Novogen any right, title or interest in any intellectual
property rights in the phenoxodiol products licensed under the
agreement.
Novogen agrees to notify us immediately on
becoming aware of any infringement of the intellectual property
rights in the licensed products or any claim by a third party
that the activities of the parties under the agreement infringe
such third party's intellectual property rights. If
required, Novogen agrees to be a party to any proceedings
brought by us in relation to any infringement of intellectual
property rights in the
45
Table of Contents
licensed products and also agrees, at our cost,
to provide all reasonable assistance in relation to such
proceedings and to execute such documents as we reasonably
require.
Termination
Either party may terminate the agreement
immediately at any time if the other party becomes the subject
of certain bankruptcy proceedings, becomes unable to carry out
the transactions contemplated by the agreement or breaches its
obligations and does not cure such breach within 21 days
notice. We may also terminate the agreement immediately if the
license agreement expires or is terminated. Novogen may also
terminate the agreement immediately if a change of control, as
defined in the manufacturing license and supply agreement,
occurs without the consent of Novogen.
Limitation of Liability
The liability of Novogen for breach of conditions
or warranties imposed by statute is limited to the replacement
of goods; supply of equivalent goods, repair or replacement
value of goods or the resupply or payment for resupply of
services.
The Amended and Restated License Option
Deed
Novogen's subsidiary, Novogen Research Pty
Limited, has granted our subsidiary, Marshall Edwards Pty
Limited, an exclusive first right to accept and an exclusive
last right to match any proposed dealing by Novogen with its
intellectual property rights with a third party relating to
certain synthetic pharmaceutical compounds (other than
phenoxodiol) developed by Novogen or its affiliates. We and
Novogen have each guaranteed the obligations of our respective
subsidiaries under the license option deed.
Option Compounds
The rights relate to all synthetic pharmaceutical
compounds, known as Option Compounds, delivered or taken in all
forms except topical applications (other than phenoxodiol, which
is the subject of the license agreement), developed before or
during the term of the deed, by or on behalf of Novogen or its
affiliates, which have known applications in the Field of
prevention, treatment or cure of cancer in humans.
Dealings in Option Compounds and Exercise
    of Rights
Novogen must not, and must ensure that its
affiliates other than us do not, deal, solicit entertain or
discuss dealings with any intellectual property rights in the
Field or in relation to any Option Compounds without giving us
an exclusive first right to accept and an exclusive last right
to match any such dealing. If we exercise our first right to
accept or last right to match, Novogen must deal with the
intellectual properly rights in favor of us on the terms and
conditions proposed. We have 15 business days to exercise those
rights and, if we fail to do so, Novogen may deal with those
intellectual property rights in favor of a third party provided
that the terms are no more favorable to that third party than
those first offered to us or which we declined to match.
Protection of Intellectual
    Property
Novogen must act in good faith toward us in
relation to its obligations under the deed and must ensure that
all persons involved in any research or development work in the
Field in relation to Option Compounds assign all intellectual
property rights relating to the Option Compounds to Novogen.
Novogen must also ensure that its affiliates, other than us, do
the same. Novogen continues to be solely responsible for the
maintenance of any patent rights in the Option Compounds, which
it may maintain and enforce at its sole discretion and expense.
46
Table of Contents
Development Reports
Novogen must provide to us from time to time and
in no event less frequently than every six months development
reports relating to the clinical trials and development of
Option Compounds, and must notify us immediately of any
regulatory approvals granted and assessments made by any
government agency.
Term and Termination
The term of the deed is sixteen years from the
commencement date, unless terminated earlier. We may terminate
the deed at any time on three month's notice to Novogen.
Either party may terminate the deed immediately at any time if
the other party becomes the subject of certain bankruptcy
proceedings, becomes unable to carry out the transactions
contemplated by the agreement or breaches its obligations and
does not cure such breach within 21 days notice.
Novogen may also terminate the deed immediately
if a change of control, as defined in the license option deed,
occurs without the consent of Novogen.
The Amended and Restated Services
Agreement
Novogen has agreed to provide a range of services
to us, or procure that its subsidiaries provide those services.
These services include providing general
assistance and advice on research and development and
commercializing phenoxodiol products and other compounds in
which we may acquire intellectual property rights in the future,
such as Option Compounds in relation to which we have exercised
its rights under the license option deed.
Novogen's obligations also include
providing, within the agreed budgets described below, our needs
with respect to secretarial, marketing, finance, logistics,
administrative and managerial support. Novogen also plans,
conducts and supervises pre-clinical and clinical trials with
phenoxodiol and with other compounds in which we have
intellectual property rights. Novogen also provides scientific
and technical advice on management of pre-clinical and clinical
research programs undertaken by us and manages such research
provisions.
Novogen may not sub-contract the provision of any
part of the services without our prior written consent.
Fees for Services
We pay services fees to Novogen in accordance
with an agreed annual budget. At the beginning of each financial
year Novogen prepares a budget estimate for us with respect to
the percentage of time spent by Novogen's employees and
consultants in the provision of services to us in the previous
financial year and any relevant considerations which are likely
to influence the time spent for the following financial year.
Each estimate must include the remuneration paid by Novogen to
each person expected to provide the services and the percentage
of time Novogen expects those persons will spend on our
business, the allocated on-costs attributable to each person, a
premises rental charge and a charge for asset usage and general
overheads. The total estimate is to be the sum of these charges
plus a mark-up of 10%. We also pay Novogen's reasonable out
of pocket expenses incurred in providing the services to us. At
the end of the fiscal year an adjustment is made to reflect
actual costs incurred where they differ from budget.
Intellectual Property and
    Confidentiality
All intellectual property rights created by
Novogen in the performance of the services for or at the request
of us are licensed to us. Each party also has obligations to the
other party to honor the other's confidential information
confidential.
47
Table of Contents
Termination
We may terminate our rights and obligations under
the services agreement on three months' written notice to
Novogen. Either we or Novogen may terminate the agreement
immediately at any time if the other party becomes the subject
of certain bankruptcy proceedings, becomes unable to carry out
the transactions contemplated by the agreement, breaches its
obligations and does not cure such breach within 21 days
notice or if a change of control in the other party occurs.
Novogen may also terminate the agreement immediately if a change
of control, as defined in the services agreement, occurs without
the consent of Novogen.
48
Table of Contents
DESCRIPTION OF OUR SECURITIES
The shares of common stock and warrants offered
hereby will be sold only in units. Each common stock unit
consists of one share of common stock and one warrant to
purchase one share of common stock. No common stock units have
been issued prior to this offering.
Description of our Capital Stock
Our total authorized share capital is 113,100,000
shares consisting of 113,000,000 shares of common stock,
$0.00000002 par value per share, and 100,000 shares of preferred
stock, $0.01 par value per share. As of the date of this
prospectus, 52,032,000 shares of our common stock and no shares
of preferred stock are issued and outstanding.
Common Stock
The holders of common stock are entitled to one
vote per share. In the event of a liquidation, dissolution or
winding up of our affairs, holders of the common stock will be
entitled to share ratably in all our assets that are remaining
after payment of our liabilities and the liquidation preference
of any outstanding shares of preferred stock. All outstanding
shares of common stock are fully paid and non-assessable. The
rights, preferences and privileges of holders of common stock
are subject to any series of preferred stock that we have issued
or that we may issue in the future. The holders of common stock
have no preemptive rights and are not subject to future calls or
assessments by us.
Preferred Stock
The board has the authority to issue up to
100,000 shares of preferred stock in one or more series and to
fix the rights, preferences, privileges and restrictions in
respect of that preferred stock, including dividend rights,
dividend rates, conversion rights, voting rights, terms of
redemption (including sinking fund provisions), redemption
prices and liquidation preferences, and the number of shares
constituting such series and the designation of any such series,
without future vote or action by the shareholders. Therefore,
the board without the approval of the shareholders could
authorize the issue of preferred stock with voting, conversion
and other rights that could affect the voting power, dividend
and other rights of the holders of shares or that could have the
effect of delaying, deferring or preventing a change of control.
As of the date of this prospectus, we have no plans to issue any
preferred stock.
Transfer Agent
Our transfer agent is Computershare Investor
Services, LLC, Two North La Salle Street, Chicago, Illinois
60602.
Description of our Warrants
Warrants included in the common stock
    units
Each warrant included in the common stock units
represents the right to purchase one share of our common stock
at an exercise price equal to 120% of the initial public
offering price set forth on the cover of this prospectus. The
warrants are immediately exercisable and will expire three years
after the date they are issued. The number of shares of our
common stock to be received upon the exercise of each warrant
may be adjusted from time to time upon the occurrence of certain
events, including but not limited to the payment of a dividend
or other distribution in respect common stock, subdivisions,
reclassifications or combinations of our common stock. The
securities receivable upon exercise of each warrant may be
adjusted in the event of any reorganization, consolidation,
merger, liquidation or similar event.
We have authorized and reserved for issuance all
shares of common stock issuable upon exercise of each warrant.
49
Table of Contents
Holders of the warrants may only exercise their
warrants for the purchase of shares of common stock if a
registration statement and current prospectus relating to these
shares is then in effect and only if the shares are qualified
for sale, or deemed to be exempt from qualification under
applicable state securities laws. We are required to use our
best efforts to maintain a current prospectus relating to these
shares of common stock at all times when the market price of the
common stock exceeds the exercise price of the warrants, until
the expiration date of the warrants. We cannot assure you that
an effective registration statement or current prospectus will
be available at the time you desire to exercise your warrants.
Upon exercise of the warrants included in the
units, we will, as soon as reasonably practicable, apply to the
Alternative Investment Market of the London Stock Exchange for
the admission of the shares of common stock underlying the
warrants. Under the rules of the Alternative Investment Market,
we must submit an application form in respect of such shares at
least three business days before the expected date of admission.
For the term of the warrants, the holders thereof
are given the opportunity to profit from an increase in the per
share market price of our common stock, with a resulting
dilution in the interest of all other shareholders. So long as
the warrants are outstanding, the terms on which we could obtain
additional capital may be adversely affected. The holders of the
warrants might be expected to exercise them at a time when we
would, in all likelihood, be able to obtain additional capital
by a new offering of securities on terms more favorable than
those provided by the warrants.
Outstanding Warrants
As of the date of this prospectus, warrants to
purchase an aggregate of 2,514,000 shares of our common stock
are outstanding. These warrants have the same terms and
provisions as the warrants included in the units, except the
existing warrants are currently exercisable, have an exercise
price of $4.00 per share and expire on November 30, 2003.
Summary of our By-Laws and Certificate of
Incorporation and certain Provisions of the Delaware General
Corporation Law (DGCL)
The following summary of the terms and provisions
of the our certificate of incorporation, by-laws, certain
aspects of the DGCL does not purport to be complete. Reference
should be made to our certificate of incorporation and our
by-laws and to applicable law for the complete description.
Meetings of Stockholders and
    Voting
Our by-laws provide for an annual meeting of
stockholders, the date of which is fixed by the board. Meetings
of stockholders may be held at such place as may be designated
by the board. Stockholders are entitled to inspect our books and
records to the extent allowable by Delaware law. Our by-laws
provide that a quorum for the transaction of business at any
meeting of stockholders is stockholders holding at least
one-third of the shares entitled to vote at such meeting.
Decisions at stockholder meetings will normally be made by a
majority of votes cast except in the case of any resolution
that, as a matter of law, requires a special majority. Each
stockholder entitled to vote at a meeting of stockholders or to
express consent or dissent to each corporate action in writing
without a meeting may authorize another person or persons to act
for him or her by proxy.
Appointment and Removal of
    Directors
Our certificate of incorporation and by-laws
provide that the number of directors will be set by the board,
but shall be between two and nine. We currently have six
directors.
Under our certificate of incorporation and
by-laws, directors are to be appointed at the annual general
meeting for a term of three years unless the director is
removed, retires or the office is vacated earlier. Our
50
Table of Contents
board is divided into three classes with respect
to the term of office, with the terms of office of one class
expiring each successive year.
A director may resign at any time. The
resignation is effective on our receipt of notice. Any or all
directors may be removed with or without cause by a resolution
of stockholders entitled to vote to elect directors. Vacancies
may be filled by resolution of a majority of directors then in
office or by a sole remaining director, and any director so owed
shall serve for the remainder of the full term of the class of
directors in which the vacancy occurred.
Amendments of the By-Laws
Our by-laws provide that the power to amend the
by-laws will vest in the directors, subject to the reserved
power of the stockholders to amend or repeal any by-laws adopted
by the board.
Amendments of the Certificate of
    Incorporation
Our certificate of incorporation can be amended,
after the approval and recommendation of the amendment by the
board of directors, by a majority vote of our stockholders,
except for certain matters rotated to the board for which the
certificate of incorporation requires a vote of not less than
eighty percent (80%) of the outstanding shares eligible to be
cast and certain other matters for which Delaware law requires a
supermajority vote.
Indemnification of Directors and
    Officers
Our certificate of incorporation provides that we
will indemnify our directors and officers to the fullest extent
permitted by the DGCL. Section 145 of the DGCL provides
that the extent to which a corporation may indemnify its
directors and officers depends on the nature of the action
giving rise to the indemnification right. In actions not on
behalf of the corporation, directors and officers may be
indemnified for acts taken in good faith and in a manner
reasonably believed to be in or not opposed to the best
interests of the corporation. In actions on behalf of the
corporation, directors and officers may be indemnified for acts
taken in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the corporation, except
for acts as to which the director or officer is adjudged liable
to the corporation, unless the relevant court determines that
indemnification is appropriate despite such liability.
Section 145 also permits a corporation to
(i) reimburse present or former directors or officers for
their defense expenses to the extent they are successful on the
merits or otherwise and (ii) advance defense expenses upon
receipt of an undertaking to repay the corporation if it is
determined that payment of such expenses is unwarranted.
To supplement the general indemnification right
contained in our certificate of incorporation, the by-laws
provide for the specific indemnification rights permitted by
Section 145 (as described above). The by-laws also permit
us to purchase directors and officers insurance, but no director
or officer has a right to require this.
In addition to the indemnification rights
described above, our certificate of incorporation eliminates any
monetary liability of directors to us or our shareholders for
breaches of fiduciary duty except for (i) breaches of the
duty of loyalty, (ii) acts or omissions in bad faith,
(iii) improper dividends or share redemptions and
(iv) transactions from which the director derives an
improper personal benefit.
Indemnification of Novogen
Our certificate of incorporation provides that we
will indemnify Novogen to the fullest extent permitted by the
DGCL in connection with certain actions brought against Novogen
by us, any of our stockholders or any other person.
51
Table of Contents
Transactions
and Corporate Opportunities
Under our amended and restated certificate of
incorporation, we are subject to certain provisions which serve
to define and delineate the respective rights and duties of us,
Novogen and some of our directors and officers in situations
where:
•
Novogen invests or engages in business activities
    that are the same as, or similar to, our business activities,
•
directors, officers and/or employees of Novogen
    serve as our directors and/or officers, and
•
Novogen has interest in a potential transaction
    or matter in which we have a similar interest in exploiting as a
    matter of corporate opportunity.
Pursuant to our amended and restated certificate
of incorporation, Novogen has no duty to refrain from investing
or engaging in activities or lines of business similar to ours
and neither Novogen nor any of its officers, directors,
stockholders, affiliates, subsidiaries or employees will be
liable to us or our stockholders for breach of any fiduciary
duty by reason of any of these activities. In addition, if
Novogen acquires knowledge of a potential transaction or matter
which may be a corporate opportunity for both our company and
Novogen, then neither Novogen nor any of its officers,
directors, stockholders, affiliates, subsidiaries or employees
will have a duty to communicate or offer this corporate
opportunity to us and will not be liable to us or our
stockholders for breach of any fiduciary duty as a stockholder
by reason of the fact that Novogen or any other such person
pursues or acquires the corporate opportunity for itself,
directs the corporate opportunity to another person or does not
communicate information regarding the corporate opportunity to
us.
We do not release from potential liability our
own officers and directors in instances where a corporate
opportunity is offered to the officer and/or director in his or
her capacity as an officer and that person:
•
serves as a director, officer or employee of
    Novogen while holding the position of a director but not officer
    of our company; or
•
serves as an officer or employee of Novogen and
    serves as one of our officers.
Further, any of our officers who is also a
Novogen director but not a Novogen officer or employee may be
potentially liable for exploiting our corporate opportunities
whether or not such opportunity was offered to that officer in
his or her official capacity.
By becoming one of our stockholders, you will be
deemed to have notice of and consented to these provisions of
our amended and restated certificate of incorporation. Until
Novogen ceases to beneficially own common stock representing at
least 20% of the voting power of our outstanding capital stock,
these provisions may not be amended or repealed except by the
vote of the holders of 80% of the voting power of our
outstanding shares of capital stock.
52
Table of Contents
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, there will be
54,032,000 shares of our common stock outstanding. Of the shares
which will be outstanding after the offering:
•
all 2,000,000 shares included in the common stock
    units and sold in this offering will be freely tradeable;
•
2,532,000 shares will be "restricted
    securities" held by non-affiliates; and
•
49,500,000 shares will be held by Novogen.
The restricted securities described above, of
which 2,523,000 were issued in May 2002, and of which 9,000 were
issued upon exercise of outstanding warrants, will be eligible
for sale in the public market 90 days after the date of
this prospectus, subject to volume limitations, manner of sale
provisions and other requirements of Rule 144, from time to
time. We also have outstanding warrants to purchase an aggregate
of 2,514,000 shares of our common stock. These warrants have an
exercise price of $4.00 per share and expire on
November 30, 2003. Any shares of our common stock issued
upon exercise of these warrants will also be restricted
securities.
In general, under Rule 144 as currently in
effect, a person who has beneficially owned restricted
securities for at least one year, including an affiliate, is
entitled to sell, within any three-month period, a number of
shares that does not exceed the greater of:
•
one percent of the then outstanding shares of our
    common stock (approximately 540,320 shares immediately
    following this offering); or
•
the average weekly trading volume during the four
    calendar weeks preceding filing of notice of such sale.
A person (or persons whose shares are aggregated)
who is not deemed to have been an affiliate of ours at any time
during the 90 days preceding a sale and who owns shares
that were acquired from us or an affiliate of ours for at least
two years prior to the proposed sale is entitled to sell such
shares pursuant to Rule 144(k) without regard to the volume
limitations, manner of sale provisions or other limitations of
Rule 144.
Shares held by Novogen may be sold in the public
market, subject to the volume, manner of sale and other
limitations of Rule 144, but may not be sold in reliance
upon Rule 144(k).
53
Table of Contents
PLAN OF DISTRIBUTION
Of the common stock units offered by this
prospectus, 500,000 units are being offered by means of an
underwritten public offering and 1,500,000 units are being
offered by means of a directed share subscription program to
eligible holders of ordinary shares and American Depositary
Receipts of Novogen and to our eligible shareholders, excluding
Novogen.
Underwritten Public Offering
Subject to the terms and conditions of an
underwriting agreement entered into between us and Janney
Montgomery Scott LLC, as underwriter, the underwriter has
agreed to purchase, and we have agreed to sell to the
underwriter, 500,000 shares of our common stock units
(excluding 300,000 units that the underwriter has the
option to purchase to cover over-allotments, if any), as well as
any common stock units that are not subscribed for as part of
the directed share subscription program.
The underwriting agreement provides that the
obligations of the underwriter are subject to various
conditions, including approval of certain legal matters by its
counsel. The nature of the underwriter's obligations is
that the underwriter is committed to purchase and pay for on a
firm commitment basis the common stock units referenced above.
The following tables shows the per common stock
unit and total underwriting discounts and commissions we will
pay to the underwriter. These amounts are shown assuming both no
exercise and full exercise of the over-allotment option to
purchase additional common stock units as part of the
underwritten offering.
Without
With
Over-Allotment Exercise
Over-Allotment Exercise
Per Common Stock Unit
$
$
Total
$
$
The underwriter proposes to offer the common
stock units directly to the public at the public offering price
listed on the cover page of this prospectus. After this
offering, the underwriter may change the offering price to the
public.
We have granted to the underwriter an option to
purchase up to an aggregate of 300,000 additional common stock
units at the public offering price, less underwriting discounts
and commissions, listed on the cover page of this prospectus,
solely to cover over-allotments, if any.
This offering of common stock units is made for
delivery when, as and if accepted by the underwriter and subject
to prior sale to withdrawal, cancellation or modification of the
offering without notice. The underwriter or we reserve the right
to reject any order for the purchase of units in whole or in
part.
We have agreed to indemnify the underwriter
against liabilities, including liabilities to which the
underwriter may become subject under any applicable federal or
state law or otherwise, and to continue to reimburse payments
the underwriter may be required to make with respect to these
liabilities.
Directed Share Subscription Program
Of the 2,000,000 common stock units being offered
pursuant to this prospectus, we are offering up to an aggregate
of 1,500,000 units at the public offering price to eligible
holders of ordinary shares and American Despositary Shares of
Novogen and to our eligible shareholders, excluding Novogen, who
owned their shares as of the close of business
on                               ,
2003. Janney Montgomery Scott LLC will act as our dealer manager
in connection with our directed share subscription program.
Eligible shareholders may purchase one unit for every:
•
ordinary shares of
    Novogen held;
•
American
    Despositary Receipts of Novogen held; and
54
Table of Contents
•
shares of our
    common stock held;
up until the aggregate 1,500,000 units are
purchased.
Each eligible holder who purchases his or her
allotment as described above may also purchase additional units
at the same purchase price per share. The number of additional
units available for this over-subscription privilege will depend
on how many holders purchase their full allotment of units. If
there are not enough of our units available to fully satisfy all
of the over-subscription privilege requests, the available units
will be distributed among eligible holders who exercised their
over-subscription privilege. In the event you choose to exercise
the over-subscription privilege but receive less than you
requested, you will receive a refund for the subscription price
of any shares you do not receive promptly after the closing of
this offering.
Janney Montgomery Scott LLC has agreed to
purchase any units allocated to the directed share subscription
program to the extent that such units are not purchased by the
eligible shareholders under the directed share subscription
program.
Sales under the directed share subscription
program will close on the closing of the sale of the other units
offered to the public. It is expected that sales under the
directed share subscription program will be reflected in each
purchaser's book-entry account at the Depository Trust
Company, if any, shortly after the closing of these sales. After
the closing of these sales, we will mail stock certificates and
warrants to all purchasers who do not maintain book-entry
accounts at the Depository Trust Company. Distribution of share
certificates purchased through the directed share subscription
program will be made to the purchasers as soon as practicable
following closing of the sale of the shares to the public.
The purchase price for the units under the
directed share subscription program will be the same price per
unit as that offered to the public and set forth on the cover
page of this prospectus. For purposes of this prospectus, when
we present financial data that reflects this offering, it is
assumed that all shares offered under the directed share
subscription program are sold. The underwriter will receive a
percentage management fee on all units offered through the
directed share subscription program. The management fee
represents compensation for the underwriter's role as it
relates to due diligence, participation in the drafting of this
prospectus and general coordination of the overall offering.
The following table shows the per common stock
unit and total management fees to be paid by us to the dealer
manager. These amounts are shown assuming that the direct share
subscription program is fully subscribed.
Directed Share
Subscription Program
Per Common Stock Unit
$
Total
$
We estimate that the total expenses of this
offering, including both the underwritten public offering and
the directed share subscription program, but excluding the
underwriting discount and management fees, will be approximately
$                    ,
which includes a
$                     non-accountable
expense allowance payable to the underwriter for costs and
expenses (including price stabilization) associated with this
offering.
The expenses of the directed share subscription
program, exclusive of the management fee to be paid to the
underwriter, are estimated at
$               and
are payable by us.
55
Table of Contents
LEGAL MATTERS
The validity of the securities offered hereby
will be passed upon for us by Morgan, Lewis & Bockius LLP.
Certain legal matters will be passed upon for the underwriter by
Pepper Hamilton LLP.
EXPERTS
The consolidated financial statements of Marshall
Edwards, Inc. (a development stage company) at June 30,
2003 and 2002, and for the years then ended and for the period
from December 1, 2000 (inception) through
June 30, 2003, appearing in this prospectus and
registration statement have been audited by Ernst &
Young LLP, independent auditors, and the information under the
caption "Summary Historical Consolidated Financial
Data" for each of the two years in the period ended
June 30, 2003 and for the period from December 1, 2000
(inception) through June 30, 2003, appearing in this
prospectus and registration statement have been derived from
consolidated financial statements audited by Ernst & Young
LLP, as set forth in their report thereon appearing elsewhere
herein.
Such consolidated financial statements and
summary historical consolidated financial data are included in
reliance upon such reports given on the authority of such firm
as experts in accounting and auditing.
AVAILABLE INFORMATION
We have filed with the SEC a registration
statement on Form S-1 with respect to the common stock
units offered hereby. This prospectus, which constitutes a part
of the registration statement, does not contain all of the
information set forth in the registration statement or the
exhibits and schedules which are part of the registration
statement. For further information with respect to us and our
common stock and the attached rights, reference is made to the
registration statement and the exhibits and schedules thereto.
You may read and copy any document we or Novogen periodically
file at the SEC's public reference room in Washington, D.C.
Please call the SEC at 1-800-SEC-0330 for further information on
the public reference room. These SEC filings are also available
to the public from the SEC's website at http://www.sec.gov.
Upon completion of this offering, we will become
subject to the information and periodic reporting requirements
of the Securities Exchange Act and, in accordance therewith,
will file periodic reports, proxy statements and other
information with the SEC. Such periodic reports, proxy
statements and other information will be available for
inspection and copying at the SEC's public reference rooms
and the website of the SEC referred to above.
We are required by the Alternative Investment
Market of the London Stock Exchange to prepare half-yearly
reports and annual audited accounts. You may request a copy of
these reports, which we will provide to you at no cost, by
writing or calling us at our mailing address and telephone
number: 140 Wicks Road, North Ryde NSW 2113,
Australia, telephone: (011) 61 2 8877 6196.
56
Table of Contents
ANNEX A
GLOSSARY OF TERMS
"Androgens"
male sex hormones, e.g. testosterone
"Anti-androgen"
a process that reduces the biological impact of
    androgens, either by blocking the production of androgens or by
    interfering with their function
"Apoptosis"
the process of programmed cell death by which a
    cell dies naturally
"Bio-available"
absorbed into the body in a useable form
"Blood plasma"
the liquid component of blood
"Bolus injection"
an intravenous injection delivered quickly
    (usually over several minutes)
"Chemotherapy"
the treatment of cancer by drugs
"Cytostatic"
the process by which a cell is prevented from
    dividing
"Cytotoxic"
having a lethal effect on cells
"Death Receptor"
signaling molecule that when activated causes
    cell death
"Differentiation"
the process by which new cells develop the
    appearance and functions of a mature cell
"Di-phenols"
a chemical term referring to two joined
    isoflavonoid ring structures
"Estrogen"
female reproductive hormone
"FDA"
the United States Food and Drug Administration
"Flavonoids"
compounds based on an isoflavonoid ring structure
"in vitro"
in the laboratory
"in vivo"
in animals
"IND"
Investigational New Drug
"Isoflavonoid ring
    structure"
a chemical term referring to a simple phenolic
    ring structure
"Kinases"
an enzyme catalyzing the transfer of phosphate
    groups to form triphosphates.
"MSTR"
Multiple Signal Transduction Regulator
"NDA"
New Drug Approval
"Oncology"
branch of medicine concerned with the study of
    cancer
"Pharmacokinetic"
the behavior of a drug within the body, in
    particular the length of time it remains within the blood and
    the rate at which it is eliminated from the body
"Phase Ia"
the first trial of a new drug in humans usually
    undertaken to determine pharmcokinetics
A-1
Table of Contents
"Phase Ib/IIa"
a clinical study the primary objective of which
    is to measure safety and efficacy
"Phase II"
usually an expanded Phase IIb study measuring
    safety and efficacy at different dosages
"Phase III"
usually a multi-center study measuring efficacy
    in large numbers of patients
"Prostate cancer"
cancer of the prostate gland
"Prostate smooth muscle
    cells"
the main type of stromal cells found in the
    prostate gland
"Prostate stromal cells"
the principal type of non-glandular cells found
    in the prostate gland
"Signal transduction
    mechanism"
a series of chemical signals transmitted within
    cells that lead to the expression of a particular function by
    the cell
"Sphingosine Kinase"
an enzyme believed to enable a cell's
    response to a number of important signals, including those
    related to cell survival and cell growth
"STR"
Signal Transduction Regulator
"Structure function
    relationship"
the relationship between a compound's
    particular chemical structure and its biological activity
A-2
Table of Contents
INDEX TO CONSOLIDATED FINANCIAL
STATEMENTS
Report of Independent Auditors
F-2
Consolidated Balance Sheets as of June 30,
    2003 and 2002
F-3
Consolidated Statements of Operations for the
    years ended June 30, 2003 and 2002, and the period from
    December 1, 2000 (inception) through June 30, 2003
F-4
Consolidated Statements of Shareholders'
    Equity
F-5
Consolidated Statements of Cash Flows for the
    years ended June 30, 2003 and 2002, and the period from
    December 1, 2000 (inception) through June 30, 2003
F-6
Notes to Consolidated Financial Statements
F-7
F-1
Table of Contents
REPORT OF INDEPENDENT AUDITORS
The Board of Directors
Marshall Edwards, Inc.
We have audited the accompanying consolidated
balance sheets of Marshall Edwards, Inc. (a development stage
company) as of June 30, 2003 and 2002, and the related
consolidated statements of operations, shareholders'
equity, and cash flows for the years then ended and for the
period from December 1, 2000 (inception) through
June 30, 2003. These financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Marshall Edwards, Inc. at
June 30, 2003 and 2002, and the consolidated results of its
operations and its cash flows for the years then ended and the
period from December 1, 2000 (inception) through
June 30, 2003, in conformity with accounting principles
generally accepted in the United States.
Ernst & Young LLP
Stamford, CT
July 31, 2003
F-2
Table of Contents
MARSHALL EDWARDS, INC
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
June 30,
2003
2002
(In thousands)
ASSETS
Current assets:
Cash and cash equivalents
$
7,244
$
9,164
Prepaid expenses and other current assets
42
21
Total current assets
7,286
9,185
Total assets
$
7,286
$
9,185
LIABILITIES AND SHAREHOLDERS'
    EQUITY
Current liabilities:
Accounts payable
$
433
$
198
Accrued expenses
278
—
Amounts due to parent company
642
88
Total current liabilities
1,353
286
Shareholders' equity:
Preferred stock, $0.01 par value, authorized
    100,000 shares, none outstanding
—
—
Common stock, $0.00000002 par value, 113,000,000
    authorized shares; 52,032,000 and 52,023,000 issued and
    outstanding shares in 2003 in 2002, respectively
—
—
Additional paid-in capital
9,058
9,022
Deficit accumulated during development stage
(3,156
)
(123
)
Accumulated other comprehensive income
31
—
Total shareholders' equity
5,933
8,899
Total liabilities and shareholders' equity
$
7,286
$
9,185
See accompanying notes.
F-3
Table of Contents
MARSHALL EDWARDS, INC
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF
OPERATIONS
Period from
December 1, 2000
Year Ended June 30,
(Inception)
through June 30,
2003
2002
2003
(In thousands, except share and per share data)
Revenues:
Interest and other income
$
145
$
7
$
152
Total revenues
145
7
152
Operating expenses:
Research and development
(2,024
)
(69
)
(2,093
)
License fees
(500
)
—
(500
)
Selling, general and administrative
(654
)
(60
)
(714
)
Total operating expenses
(3,178
)
(129
)
(3,307
)
Loss from operations
(3,033
)
(122
)
(3,155
)
Income tax expense
—
(1
)
(1
)
Net loss arising during development stage
$
(3,033
)
$
(123
)
$
(3,156
)
Net loss per common share:
Basic and diluted
$
(0.058
)
$
(0.002
)
Weighted average common shares outstanding
52,023,247
49,769,581
See accompanying notes.
F-4
Table of Contents
MARSHALL EDWARDS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY
Deficit
Accumulated
Accumulated
During
Other
Common
Additional
Development
Comprehensive
Stock
Paid-in Capital
Stage
Income
Total
(Shares)
(In thousands)
Balance at June 30, 2001
49,500,000
$
—
$
—
$
—
$
—
Net loss arising during development stage
(123
)
(123
)
Common stock issued May 22, 2002 (including
    2,523,000 warrants)
2,523,000
9,022
9,022
Balance at June 30, 2002
52,023,000
9,022
(123
)
—
8,899
Net loss arising during development stage
(3,033
)
(3,033
)
Foreign currency translation adjustments
31
31
Comprehensive Loss
(3,002
)
Common stock issued, June 26, 2003
9,000
36
36
Balance at June 30, 2003
52,032,000
$
9,058
$
(3,156
)
$
31
$
5,933
See accompanying notes.
F-5
Table of Contents
MARSHALL EDWARDS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH
FLOWS
Period from
Year Ended June 30,
December 1, 2000
(Inception) through
2003
2002
June 30, 2003
(In thousands)
Operating activities:
Net loss arising during development stage
$
(3,033
)
$
(123
)
$
(3,156
)
Adjustments to reconcile net loss to cash (used
    in) provided by operating activities:
Changes in operating assets and liabilities:
Prepaid expenses and other current assets
(21
)
(21
)
(42
)
Accounts payable and amounts due to parent company
1,067
286
1,353
Net cash (used in) provided by operating
    activities
(1,987
)
142
(1,845
)
Financing activities:
Net proceeds from issuance of Common Stock
36
9,022
9,058
Net cash provided by financing activities
36
9,022
9,058
Effect of exchange rate changes on cash and cash
    equivalents
31
—
31
Net (decrease) increase in cash and cash
    equivalents
(1,920
)
9,164
7,244
Cash and cash equivalents at beginning of period
9,164
—
—
Cash and cash equivalents at end of period
$
7,244
$
9,164
$
7,244
Income taxes paid
$
—
$
1
$
1
See accompanying notes.
F-6
Table of Contents
MARSHALL EDWARDS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
June 30, 2003
1.
Organization and Basis of Preparation of
    Financial Statements
Marshall Edwards, Inc. (the "Company"
or "MEI") is a development stage company incorporated
in December 2000 that commenced operations in May 2002
coinciding with its listing on the London Stock Exchange's
Alternative Investment Market (AIM). In connection with its
listing, 2,523,000 shares of Common Stock and 2,523,000
warrants, exercisable prior to November 30, 2003 at an
exercise price of $4.00 per share (9,000 exercised on
June 26, 2003), were issued in May 2002 at $4.00 per share.
Total proceeds of $9,022,000 were received net of $1,070,000 of
transaction costs. Following the listing, Novogen Limited, an
Australian pharmaceutical company listed on both the Australian
Stock Exchange and NASDAQ, retained 95.1% of the Company's
Common Stock. The costs of organizing MEI were paid by Novogen
and were minimal.
The Company, including its Australian subsidiary,
Marshall Edwards Pty. Limited ("MEPL") (together, the
"MEI Group") is a pharmaceutical company with a
primary focus on oncology drugs. The Company plans to develop
phenoxodiol for use in a wide range of human cancers. The
Company operates primarily in Australia and the United States.
Novogen Limited and its subsidiary companies,
other than MEI Group ("Novogen"), has granted to the
MEI Group an exclusive license under its patent applications and
the intellectual property rights in the relevant know-how to
develop, market and distribute all forms of administering
phenoxodiol for anti-cancer uses except topical applications. In
addition, the MEI Group has the option of an exclusive first
right and an exclusive last right to match any proposal dealing
with third parties by Novogen Research Pty Ltd for the
intellectual property rights and development of other anti
cancer drugs in the agreed dose forms derived from the Novogen
library of compounds.
The MEI Group's initial business focus is to
continue the clinical program currently underway for the
development of phenoxodiol.
2.
Accounting Policies
Revenue Recognition
Interest
The only revenue earned to date is interest on
cash and cash equivalents.
Principles of Consolidation
The consolidated financial statements include the
accounts of Marshall Edwards, Inc. and its subsidiary, Marshall
Edwards Pty. Limited which is a wholly-owned Australian company.
Significant intercompany accounts and transactions have been
eliminated in consolidation.
Estimates
The preparation of the consolidated financial
statements in conformity with accounting principles generally
accepted in the United States requires management to make
estimates and assumptions that affect the amounts reported in
the consolidated financial statements and the accompanying
notes. Actual results could differ from those estimates.
F-7
Table of Contents
MARSHALL EDWARDS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Cash Equivalents
The Company considers all highly liquid
investments with a maturity of three months or less when
purchased to be cash equivalents.
Income Taxes
Income taxes have been provided for using the
liability method in accordance with FASB Statement No. 109,
"Accounting for Income Taxes." Under this method,
deferred tax assets and liabilities are recognized and measured
using enacted tax rates in effect for the year in which the
differences are expected to be recognized. Valuation allowances
are established against the recorded deferred income tax assets
to the extent that management believes that it is more likely
than not that a portion of the deferred income tax assets are
not realizable.
Fair Value of Financial
    Instruments
The carrying amounts of the Company's
financial instruments, including cash and cash equivalents, and
accounts payable approximate fair value.
Foreign Currency Translation
The financial statements of MEPL have been
translated into U.S. dollars in accordance with FASB Statement
No. 52, "Foreign Currency Translation." Assets
and liabilities are translated into U.S. dollars using the
exchange rates in effect at the balance sheet date. Income
statement amounts have been translated using the average
exchange rate for the year. Accumulated other comprehensive loss
includes the cumulative translation adjustments. Realized gains
and losses from foreign currency transactions are reflected in
the consolidated statements of operations and were not
significant for all periods presented.
Research and Development
    Expenses
Research and development expenses relate
primarily to the cost of conducting human clinical trails of
phenoxodiol. Research and development costs are charged to
expense as incurred.
Stock-Based Compensation
The Company's stock option plan provides for
the grant of options to employees of the Company and its
affiliates. To date no options have been granted under the plan.
Basic and Diluted Loss Per
    Share
Basic and diluted earnings or loss per share is
calculated in accordance with FASB Statement No. 128,
"Earnings Per Share." In computing basic earnings or
loss per share, the dilutive effect of stock options and
warrants are excluded, whereas for diluted earnings per share
they are included unless the effect is anti-dilutive.
Comprehensive Loss
Comprehensive loss is comprised of net loss and
other comprehensive loss. Other comprehensive loss includes
certain changes in shareholders' equity that are excluded
from net loss is comprised of changes in foreign currency
translation adjustments. Comprehensive loss for all periods
presented has been reflected in the consolidated statement of
shareholders' equity.
F-8
Table of Contents
MARSHALL EDWARDS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Recent Accounting
    Announcements
Accounting pronouncements issued by the financial
accounting standards board or other authoritative accounting
standards groups with future effective dates are either not
applicable or not significant to our consolidated financial
statements.
3.
Income Taxes
Loss from operations consists of the following:
Year Ended June 30,
2003
2002
(In thousands)
Domestic
$
(186
)
$
(19
)
Foreign
(2,847
)
(103
)
$
(3,033
)
$
(122
)
The reconciliation of income tax computed at the
U.S. federal statutory tax rate to income tax expense
attributable to loss arising during development stage is as
follows:
Year Ended June 30,
2003
2002
(In thousands)
%
(In thousands)
%
Tax at U.S. statutory rates
$
(1,062
)
35
$
(43
)
35
Australian tax
—
—
1
—
Valuation allowance
1,062
(35
)
43
(35
)
$
—
—
$
1
—
Deferred tax liabilities and assets are comprised
of the following:
June 30,
2003
2002
(In thousands)
Deferred tax liabilities
Prepayments
$
—
$
4
Total deferred tax liabilities
—
4
Deferred tax assets
Consultant and other accruals
265
6
Total deferred tax assets
265
6
Valuation allowance for deferred tax assets
(265
)
(2
)
Net deferred tax assets and liabilities
$
—
$
—
Management evaluates the recoverability of the
deferred tax asset and the amount of the required valuation
allowance. Due to the uncertainty surrounding the realization of
the tax deductions in future tax returns, the Company has
recorded a valuation allowance against its net deferred tax
asset at June 30, 2003 and 2002. At such time as it is
determined that it is more likely than not that the deferred tax
assets will be realized, the valuation allowance will be reduced.
F-9
Table of Contents
MARSHALL EDWARDS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
There was no benefit from income taxes recorded
for the period from December 1, 2000 (inception) to
June 30, 2003 due to the Company's inability to
recognize the benefit of net operating losses. The Company had
federal net operating loss carryforwards of approximately
$205,000 and $14,000 at June 30, 2003 and 2002,
respectively. The federal net operating losses will begin to
expire in 2022.
Foreign income tax losses of approximately
$2,039,000 and $103,000 at June 30, 2003 and 2002,
respectively, may be carried forward indefinitely.
4.     Loss Per
Share
The following table sets forth the components for
the computation of basic and diluted net loss per common share:
Year Ended June 30,
2003
2002
(In thousands)
Numerator
Net loss arising during development stage
$
(3,033
)
$
(123
)
Effect of dilutive securities
—
—
Numerator for diluted earnings per share
$
(3,033
)
$
(123
)
Denominator
Denominator for basic earnings per share —
    weighted average common shares outstanding
52,023,247
49,769,581
Effect of dilutive securities
—
—
Dilutive potential common shares
52,023,247
49,769,581
5.     Financial
Instruments
The fair value of financial assets and
liabilities approximates their carrying value in the
Consolidated Balance Sheets because they are short term and at
market rates of interest.
6.     Commitments
and Contingencies
At June 30, 2003, the Company has contracted
to conduct research and development expenditures amounting to
approximately $1,249,000. Such amounts are expected to be
incurred within the next year.
The Company is not currently a party to any
material legal proceedings.
The Company's certificate of incorporation
provides that it will indemnify Novogen in connection with
certain actions brought against Novogen by any of the
Company's stockholders or any other person.
F-10
Table of Contents
MARSHALL EDWARDS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
7.     Segment
Information
The Company's focus is to continue the
clinical program currently underway for the development of
phenoxodiol.
USA
Australia
Eliminations
Total
June 30,
June 30,
June 30,
June 30,
June 30,
June 30,
June 30,
June 30,
2003
2002
2003
2002
2003
2002
2003
2002
(In thousands)
Interest and other income
$
110
$
5
$
35
$
2
$
—
$
—
$
145
$
7
Total revenues
$
110
$
5
$
35
$
2
$
—
$
—
$
145
$
7
Loss from operations
$
(186
)
$
(19
)
$
(2,847
)
$
(103
)
$
—
$
—
$
(3,033
)
$
(122
)
Income tax expense
$
—
$
(1
)
Net loss arising during development stage
$
(3,033
)
$
(123
)
Segment assets
$
8,896
$
9,188
$
374
$
1,981
$
(1,984
)
$
(1,984
)
$
7,286
$
9,185
Segment liabilities
$
43
$
185
$
1,310
$
101
$
—
$
—
$
1,353
$
286
8.     Related Party
Transactions
License
Agreement
The license agreement is an agreement under which
Novogen grants to MEPL a worldwide non-transferable license to
conduct clinical trials and commercialize and distribute all
forms of phenoxodiol except topical applications. The agreement
covers uses of phenoxodiol in the field of prevention, treatment
or cure of cancer in humans. The license is exclusive until the
expiration of the last relevant Novogen patent right in the
world and thereafter is nonexclusive. The Company may terminate
the agreement with three months notice. Novogen may terminate
the agreement if a change of control, as defined in the license
agreement, occurs without the consent of Novogen. Amounts
payable to Novogen under terms of the license agreement is as
follows:
(1) A lump sum license fee of $5,000,000 is
    payable to Novogen on the later of November 1, 2002 or on
    the date when the cumulative total of all funds received from
    debt or equity issuances and revenue received from
    commercialization (income other than sales) and sales of
    phenoxodiol products exceeds $25,000,000.
(2) A lump sum license fee of $5,000,000 is
    payable to Novogen on the later of November 1, 2003 or on
    the date when the cumulative total of all funds received from
    debt or equity issuances and revenue received from
    commercialization (income other than sales) and sales of
    phenoxodiol products exceeds $50,000,000.
In addition to the amounts above, the Company
must pay Novogen 2.5% of all net sales and 25% of
commercialization income. After the exclusivity period of the
license, 1.5% of net sales must be paid to Novogen.
The cumulative total of funds received by the
Company is $10,128,000.
F-11
Table of Contents
MARSHALL EDWARDS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)
Amounts payable for annual license fees under the
license agreement for the calendar years ended December 31
are as follows:
2003
$
1,000,000
2004
$
2,000,000
2005
$
4,000,000
Each calendar year thereafter
$
8,000,000
Any amounts payable to Novogen under the above
annual payments will be reduced for amounts paid under the first
lump sum license fee referred to in (1) above. For the year
ended June 30, 2003, $500,000 has been included as license
fee expense in the consolidated statements of operations.
Novogen developed phenoxodiol in part using funds
from the Australian government under what is known as the START
Program. In the event Novogen fails to comply with its
obligations under the agreement which governs this grant, or if
Novogen undergoes a change of control, the Australian government
has a right to demand that intellectual property created during
the course of the project funded by the grant be vested back in
the Australian government. The Australian government may then
license the intellectual property rights related to phenoxodiol
to other parties and may demand other intellectual property
rights from Novogen. Any such reclamation by the Australian
government could preclude the Company's use of
Novogen's intellectual property in the development and
commercialization of phenoxodiol and the Company may have to
compete with other companies to whom the Australian government
may license the intellectual property.
License
Option Deed
The license option deed grants MEPL an exclusive
right to accept and an exclusive right to match any proposed
third-party dealing by Novogen of its intellectual property
rights in other synthetic compounds that have known or potential
anti-cancer applications in all forms other than topical
applications.
Services
Agreement
Neither the Company nor MEPL currently intends to
directly employ any staff and Novogen will provide or procure
services reasonably required by the MEI Group relating to the
development and commercialization of phenoxodiol and for other
administrative and managerial support. Novogen will provide
these services at cost plus a 10% markup. Cost is based on
estimates regarding the percentage of time spent by Novogen
employees and consultants, a premises rental charge and a charge
for asset usage and general overhead. The Company may terminate
the agreement with three months notice. Novogen may terminate
the agreement under certain circumstances.
Manufacturing,
License and Supply Agreement
Under the terms of the Manufacturing License and
Supply Agreement, Novogen will supply phenoxodiol in its primary
manufactured form for the clinical trial development program and
phenoxodiol's ultimate commercial use. Novogen will supply
phenoxodiol at cost plus a 50% markup. The Company or Novogen
may terminate the agreement under certain circumstances.
Transactions amounting to $1,363,032 and $87,603
were made under the license agreement, the Services Agreement
and the Manufacturing, License and Supply Agreement with Novogen
during the years ended June 30, 2003 and 2002, respectively.
F-12
Table of Contents
2,000,000 Common Stock Units
Marshall Edwards, Inc.
Through and
including                     (the
25th day after the date of the prospectus), all dealers that
buy, sell, or trade our common stock units, whether or not
participating in this offering, may be required to deliver a
prospectus. This delivery requirement is in addition to the
dealers' obligation to deliver a prospectus when acting as
underwriters and with respect to their unsold allotments or
subscriptions.
You should rely only on the information contained
in this prospectus. We have not authorized anyone to provide you
with information different from that contained in this
prospectus. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of
the time of delivery of this prospectus or of any distribution
of the common stock units.
Janney Montgomery Scott
LLC
,
2003
Table of Contents
PART II
INFORMATION NOT REQUIRED IN
PROSPECTUS
Item 13.
Other
Expenses of Issuance and Distribution.
An estimate of expenses follows:
Securities and Exchange Commission registration
    fee
$
2,660.81
NASD filing fee
3,789.00
Nasdaq Small Cap Market listing fee
30,000.00
Printing and engraving expenses
*
Transfer agent and registrar fees and expenses
*
Legal fees and expenses
*
Accountants' fees and expenses
*
Blue Sky fees and expenses (including legal fees)
*
Miscellaneous expenses
*
Total
$
704,000.00
*
To be filed by amendment.
Item 14.
Indemnification of Directors and
    Officers.
Our Certificate of Incorporation provides that we
will indemnify our directors and officers to the full extent
permitted by the DGCL. Section 145 of the DGCL provides
that the extent to which a corporation may indemnify its
directors and officers depends on the nature of the action
giving rise to the indemnification right. In actions not on
behalf of the corporation, directors and officers may be
indemnified for acts taken in good faith and in a manner
reasonably believed to be in or not opposed to the best
interests of the corporation. In actions on behalf of the
corporation, directors and officers may be indemnified for acts
taken in good faith and in a manner reasonably believed to be in
or not opposed to the best interests of the corporation, except
for acts as to which the director or officer is adjudged liable
to the corporation, unless the relevant court determines that
indemnification is appropriate despite such liability.
Section 145 also permits a corporation to
(i) reimburse present or former directors or officers for
their defense expenses to the extent they are successful on the
merits or otherwise and (ii) advance defense expenses upon
receipt of an undertaking to repay the corporation if it is
determined that payment of such expenses is unwarranted.
To supplement the general indemnification right
contained in our Certificate of Incorporation, the By-Laws
provide for the specific indemnification rights permitted by
Section 145 (as described above). The By-Laws also permit
us to purchase Directors and Officers insurance, but no director
or officer has a right to require this.
In addition to the indemnification rights
described above, our Certificate of Incorporation eliminates any
monetary liability of directors to us or our shareholders for
breaches of fiduciary duty except for (i) breaches of the
duty of loyalty, (ii) acts or omissions in bad faith,
(iii) improper dividends or share redemptions and
(iv) transactions from which the director derives an
improper personal benefit.
Item 15.
Recent Sales of Unregistered
    Securities.
On May 22, 2002, we sold 2,523,000 shares of
our common stock for an aggregate of $10.1 million. These
shares of common stock were listed on the London Stock
Exchange's Alternative Investment Market. These shares of
common stock each had an attaching warrant entitling the holder
to purchase one additional share of our common stock. These
warrants are exercisable prior to November 30, 2003 and
have an exercise price of $4.00 per share. These securities were
offered and sold by us to a limited number
II-1
Table of Contents
of predominantly U.S. investors in private
placement transactions. These transactions were exempt from
registration pursuant to Section 4(2) of the Securities Act
of 1933.
Item 16.
Exhibits and Financial Statement
    Schedules.
(a)
Exhibits.
Exhibit
Number
Exhibit
3.1
Certificate of Incorporation.
3.2
Bylaws.
4.1
*
Specimen Common Stock certificate.
4.2
*
Warrant Agreement.
5*
Opinion of Morgan, Lewis & Bockius LLP.
10.1
Amended and Restated License Agreement between
    Novogen Research Pty Limited and Marshall Edwards Pty Limited.
10.2
Amended and Restated Manufacturing License and
    Supply Agreement between Novogen Laboratories Pty Limited and
    Marshall Edwards Pty Limited.
10.3
Amended and Restated License Option Deed between
    Novogen Research Pty Limited and Marshall Edwards Pty Limited.
10.4
Amended and Restated Services Agreement among
    Novogen Limited, Marshall Edwards, Inc. and Marshall Edwards Pty
    Limited.
10.5
Guarantee and Indemnity among Marshall Edwards,
    Inc., Novogen Laboratories Pty Limited, Novogen Research Pty
    Limited and Novogen Limited.
10.6
Marshall Edwards, Inc. Share Option Plan.
10.7
Form of outstanding Warrant issued to Non-US
    Persons May 2002.
10.8
Form of outstanding Warrant issued to US Persons
    May 2002.
21
Subsidiaries of Marshall Edwards, Inc.
23.1
*
Consent of Morgan, Lewis & Bockius LLP
    (contained in Exhibit 5).
23.2
Consent of Ernst & Young LLP.
24
Power of Attorney (included on signature page).
99.1
*
Form letter from Marshall Edwards, Inc. to
    eligible holders of its common stock, ordinary shares and
    American Depositary Shares of Novogen Limited describing the
    Directed Share Subscription Program.
99.2
*
Form of letter from Janney Montgomery Scott LLC
    to eligible holders.
99.3
*
Form of brokers letter.
99.4
*
Form of subscription agreement.
*
To be filed by amendment.
(b)
Financial Statement Schedules.
All financial statement schedules have been
omitted because either they are not required, are not
applicable, or the information is otherwise set forth in the
financial statements and notes thereto.
Item 17.
Undertakings.
(1) The undersigned registrant hereby
undertakes:
(i) To file, during any period in which
    offers or sales are being made, a post-effective amendment to
    this registration statement:
(a) To include any prospectus required by
    Section 10(a)(3) of the Securities Act of 1933;
II-2
Table of Contents
(b) To reflect in the prospectus any facts
    or events arising after the effective date of the registration
    statement (or the most recent post-effective amendment thereof)
    which, individually or in the aggregate, represent a fundamental
    change in the information set forth in the registration
    statement. Notwithstanding the foregoing, any increase or
    decrease in volume of securities offered (if the total dollar
    value of securities offered would not exceed that which was
    registered) and any deviation from the low or high end of the
    estimated maximum offering range may be reflected in the form of
    prospectus filed with the Commission pursuant to
    Rule 424(b) if, in the aggregate, the changes in volume and
    price represent no more than a 20 percent change in the
    maximum aggregate offering price set forth in the
    "Calculation of Registration Fee" table in the
    effective registration statement;
(c) To include any material information with
    respect to the plan of distribution not previously disclosed in
    the registration statement or any material change to such
    information in the registration statement.
(ii) To provide to the underwriters at the
    closing specified in the Underwriting Agreement share and
    warrant certificates in such denominations and registered in
    such names as required by the underwriters to permit prompt
    delivery to each purchaser.
(2) Insofar as indemnification for
liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under
Item 14 above, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
(3) For purposes of determining any
liability under the Securities Act, the information omitted from
the form of prospectus filed as part of this registration
statement in reliance on Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it is first declared effective.
(4) For the purpose of determining any
liability under the Securities Act of 1933, each post-effective
amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial
bona fide
offering
thereof.
II-3
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Sydney, Australia on
September 25, 2003.
MARSHALL EDWARDS, INC.
(Registrant)
By:
/s/ CHRISTOPHER NAUGHTON
Christopher Naughton
President and Chief Executive
    Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby
constitutes and appoints Christopher Naughton and David R.
Seaton, and each of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution
and resubstitution for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments or
supplements to this registration statement, whether
pre-effective or post-effective, and to file the same with all
exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing
necessary or appropriate to be done with respect to this
registration statement or any amendments or supplements hereto
in the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities
Act of 1933, this registration statement has been signed below
by the following persons, in the capacities and on the dates
indicated.
Signature
Title
Date
/s/ CHRISTOPHER NAUGHTON
Christopher Naughton
President and Chief Executive Officer, Director
    (Principal Executive Officer)
September 25, 2003
/s/ DAVID R. SEATON
David R. Seaton
Chief Financial Officer and Secretary (Principal
    Financial Officer and Principal Accounting Officer)
September 25, 2003
/s/ DR. GRAHAM E. KELLY
Dr. Graham E. Kelly
Chairman
September 25, 2003
/s/ PHILIP A. JOHNSTON
Philip A. Johnston
Director
September 25, 2003
/s/ DAVID MORRITZ DE KRETSER
David Morritz de Kretser
Director
September 25, 2003
II-4
Table of Contents
Signature
Title
Date
/s/ PAUL J. NESTEL
Paul J. Nestel
Director
September 25, 2003
/s/ STEPHEN BRECKENRIDGE
Stephen Breckenridge
Director
September 25, 2003
II-5
Table of Contents
INDEX TO EXHIBITS
Exhibit
Number
Exhibit
3
.1
Certificate of Incorporation.
3
.2
Bylaws.
4
.1*
Specimen Common Stock certificate.
4
.2*
Warrant Agreement.
5
*
Opinion of Morgan, Lewis & Bockius LLP.
10
.1
Amended and Restated License Agreement between
    Novogen Research Pty Limited and Marshall Edwards Pty Limited.
10
.2
Amended and Restated Manufacturing License and
    Supply Agreement between Novogen Laboratories Pty Limited and
    Marshall Edwards Pty Limited.
10
.3
Amended and Restated License Option Deed between
    Novogen Research Pty Limited and Marshall Edwards Pty Limited.
10
.4
Amended and Restated Services Agreement among
    Novogen Limited, Marshall Edwards, Inc. and Marshall Edwards Pty
    Limited.
10
.5
Guarantee and Indemnity among Marshall Edwards,
    Inc., Novogen Laboratories Pty Limited, Novogen Research Pty
    Limited and Novogen Limited.
10
.6
Marshall Edwards, Inc. Share Option Plan.
10
.7
Form of outstanding Warrant issued to Non-US
    Persons May 2002.
10
.8
Form of outstanding Warrant issued to US Persons
    May 2002.
21
Subsidiaries of Marshall Edwards, Inc.
23
.1*
Consent of Morgan, Lewis & Bockius LLP
    (contained in Exhibit 5).
23
.2
Consent of Ernst & Young LLP.
24
Power of Attorney (included on signature page).
99
.1*
Form letter from Marshall Edwards, Inc. to
    eligible holders of its common stock, ordinary shares and
    American Depositary Shares of Novogen Limited describing the
    Directed Share Subscription Program.
99
.2*
Form of letter from Janney Montgomery Scott LLC
    to eligible holders.
99
.3*
Form of brokers letter.
99
.4*
Form of subscription agreement.
*
To be filed by amendment.