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

<DIV align="center" style="font-size: 10pt;">
<B>As filed with the Securities and Exchange Commission on
September&nbsp;9, 2005</B>
</DIV>

<DIV align="right" style="font-size: 10pt;">
<B>Registration Statement No.
333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
</DIV>

<DIV align="center" style="font-size: 6pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 3pt;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 14pt;">
<B>SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>FORM&nbsp;S-1</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>REGISTRATION STATEMENT</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>UNDER</B>
</DIV>

<DIV align="center" style="font-size: 12pt;">
<B>THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Glycotex, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<I>(Exact name of Registrant as specified in its charter)</I>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B>Delaware</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>8731</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>30-0001753</B></TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <I>(State or other jurisdiction of<BR>
    incorporation or organization)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <I>(Primary Standard Industrial<BR>
    Classification Code Number)</I></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <I>(I.R.S. Employer<BR>
    Identification No.)</I></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 9pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Glycotex, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 9pt;">
<B>140 Wicks Road</B>
</DIV>

<DIV align="center" style="font-size: 9pt;">
<B>North Ryde NSW 2113</B>
</DIV>

<DIV align="center" style="font-size: 9pt;">
<B>Australia</B>
</DIV>

<DIV align="center" style="font-size: 9pt;">
<B>(011)&nbsp;61 2 8877-6177</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<I>(Address, including zip code, and telephone number,</I>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<I>including area code, of Registrant&#146;s principal executive
offices)</I>
</DIV>

<DIV align="center" style="font-size: 9pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The Corporation Trust Company</B>
</DIV>

<DIV align="center" style="font-size: 9pt;">
<B>The Corporation Trust Center</B>
</DIV>

<DIV align="center" style="font-size: 9pt;">
<B>1209 Orange Street</B>
</DIV>

<DIV align="center" style="font-size: 9pt;">
<B>Wilmington, Delaware 19801</B>
</DIV>

<DIV align="center" style="font-size: 9pt;">
<B>(302)&nbsp;658-7581</B>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<I>(Name, address, including zip code, and telephone number,</I>
</DIV>

<DIV align="center" style="font-size: 8pt;">
<I>including area code, of agent for service)</I>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 9pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B><I>Copies to:</I></B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 3pt; ">

<TR style="font-size: 1pt;">
    <TD width="33%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>

<TR>
    <TD align="center" valign="top">
    <B>David R. Seaton<BR>
    Chief Financial Officer<BR>
    Glycotex, Inc.<BR>
    140 Wicks Road<BR>
    North Ryde NSW 2113<BR>
    Australia<BR>
    (011) 61 2 8877-6177</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>Steven A. Navarro, Esq.<BR>
    Owen S. Littman, Esq.<BR>
    Morgan, Lewis &#38; Bockius LLP<BR>
    101 Park Avenue<BR>
    New York, New York 10178<BR>
    (212) 309-6000</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    <B>James A. Lebovitz, Esq.<BR>
    Stephen M. Leitzell, Esq.<BR>
    Dechert LLP<BR>
    4000 Bell Atlantic Tower<BR>
    1717 Arch Street<BR>
    Philadelphia, PA 19103-2793<BR>
    (215) 994-4000</B></TD>
</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;Approximate date of commencement of
proposed sale to the public:<B> As soon as practicable after the
effective date of this Registration Statement.</B>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to
Rule&nbsp;415 under the Securities Act, check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#120;
</FONT>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
If this Form is filed to register additional securities for an
offering pursuant to Rule&nbsp;462(b) 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;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
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;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
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;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
If delivery of the prospectus is expected to be made pursuant to
Rule&nbsp;434, please check the following
box.&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="wingdings">&#111;
</FONT>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CALCULATION OF REGISTRATION FEE</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 2pt; ">

<TR style="font-size: 1pt;">
    <TD width="56%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="16%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- Right VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Proposed Maximum</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Title of Each Class of</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Aggregate</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Amount of</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Securities to be Registered</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Offering Price(1)(2)</B></TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Registration Fee</B></TD>
</TR>


<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock units consisting of common stock and warrants</DIV>
    </TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $39,000,000</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $4,591</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock underlying units</DIV>
    </TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $&#151;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $&#151;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Warrants underlying units</DIV>
    </TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $&#151;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $&#151;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock underlying warrants</DIV>
    </TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $47,000,000</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $5,532</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Totals</DIV>
    </TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right:1.5pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom">
    $10,123</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 2pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 9pt;">

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

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Estimated solely for the purpose of computing the registration
    fee pursuant to Rule&nbsp;457(o) under the Securities Act.</TD>
</TR>

<TR>
    <TD style="font-size: 2pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>(2)&nbsp;</TD>
    <TD align="left">
    Includes shares to be sold upon exercise of the
    underwriter&#146;s over-allotment option. See
    &#147;Underwriting.&#148;</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;
<B>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 of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section&nbsp;8(a), may determine.</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 4pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 4pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

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

<TABLE width="100%" cellpadding="5" style="border: 3pt double #000000; margin-bottom: 6pt; font-size: 10pt"><TR><TD>
<FONT style="font-size: 8pt" 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. <BR>


</FONT>
</TD></TR></TABLE>

<DIV align="right" style="font-size: 8pt; margin-top: 1pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Filed Pursuant to Rule&nbsp;424(b)(4)
</DIV>

<DIV align="right" style="font-size: 8pt;">
Registration Statement No.&nbsp;333-109129
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SUBJECT TO COMPLETION,
DATED &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PROSPECTUS</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Glycotex, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 15pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&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;Common
Stock Units</B>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This is an
initial public offering by Glycotex, Inc. We are offering common
stock units. Each common stock unit consists of:
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 9pt;">

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

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

<TR>
    <TD style="font-size: 3pt">&nbsp;</TD>
</TR>

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

</TABLE>

<DIV align="left" style="font-size: 9pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
estimated initial public offering price for the common stock
units is between
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
unit.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are
applying to list our common stock and warrants on the Nasdaq
National Market under the symbols &#147;GLTX&#148; and
&#147;GLTXW,&#148; respectively.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon
completion of this offering, Novogen Limited, our parent
company, will beneficially own
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our outstanding common stock on a fully-diluted basis.
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There will
be no trading market for the common stock units. The shares of
common stock and warrants comprising the units will separate
immediately upon completion of this offering and prior to any
trading of the common stock and warrants.
</DIV>

<DIV align="left" style="font-size: 11pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Investing
in the common stock units involves a high degree of risk. See
&#147;Risk Factors&#148; beginning on page&nbsp;6.</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 9pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Per Common</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock Unit</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Initial public offering price</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Discounts and commissions to underwriter</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Offering proceeds to Glycotex, Inc., before expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 9pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have
granted the underwriter an option to purchase up to an
additional &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;common
stock units at the initial public offering price, solely to
cover over-allotments. The underwriter can exercise this right
at any time until 30&nbsp;days after the offering.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&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>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Janney Montgomery Scott
<FONT style="font-size: 14pt">LLC</FONT></B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
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;,
2005.
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>

<DIV align="left" style="font-size: 10pt;">

</DIV>

<DIV align="left" style="font-size: 10pt;">
<!-- TOC -->
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>TABLE OF CONTENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="90%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Page</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#101'>PROSPECTUS SUMMARY</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#102'>RISK FACTORS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#103'>SPECIAL NOTE&nbsp;REGARDING FORWARD-LOOKING
    STATEMENTS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>22</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#104'>USE OF PROCEEDS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#105'>DIVIDEND POLICY</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>23</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#106'>CAPITALIZATION</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>24</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#107'>DILUTION</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>25</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#108'>SELECTED HISTORICAL FINANCIAL DATA</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>26</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#109'>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>27</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#110'>BUSINESS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>31</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#111'>MANAGEMENT</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>47</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#112'>BENEFICIAL OWNERSHIP OF COMMON STOCK</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#113'>CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>51</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#114'>DESCRIPTION OF OUR SECURITIES</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>57</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#115'>SECURITIES ELIGIBLE FOR FUTURE SALE</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>61</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#116'>UNDERWRITING</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>63</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#117'>LEGAL MATTERS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#118'>EXPERTS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#119'>AVAILABLE INFORMATION</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>66</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    &nbsp;<A HREF='#120'>INDEX TO FINANCIAL STATEMENTS</A></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-1</TD>
    <TD>&nbsp;</TD>
</TR>

<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y12532exv10w1.txt">EX-10.1: AMENDED AND RESTATED TECHNOLOGY LICENSE AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y12532exv10w2.txt">EX-10.2: AMENDED AND RESTATED MANUFACTURING LICENSE AND SUPPPLY AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y12532exv10w3.txt">EX-10.3: AMENDED AND RESTATED SERVICES AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y12532exv10w4.txt">EX-10.4: AMENDED AND RESTATED AGENCY AGREEMENT</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="y12532exv23w1.htm">EX-23.1: CONSENT OF BDO</A></FONT></TD></TR>
</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt;">
<!-- /TOC -->
</DIV>

<P align="center" style="font-size: 10pt;">i

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

<DIV align="left" style="font-size: 10pt;">
<A name='101'></A>
</DIV>

<!-- link1 "PROSPECTUS SUMMARY" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PROSPECTUS SUMMARY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>This summary highlights key aspects of our business and our
offering of common stock units that are described more fully
elsewhere in this prospectus. This summary does not contain all
of the information that you should consider before making an
investment decision. You should read the entire prospectus
carefully, including the Risk Factors section beginning on
page&nbsp;6 and our financial statements and related notes
beginning on page F-1, before making an investment decision.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>References to &#147;we,&#148; &#147;us,&#148; or
&#147;our&#148; refer to Glycotex, Inc. References to
&#147;Novogen&#148; refer to Novogen Limited and its
consolidated subsidiaries, other than Glycotex, Inc. References
to values in &#147;dollars&#148; or &#147;$&#148; denote
U.S.&nbsp;dollars and values in &#147;$A&#148; indicate
Australian dollars.</I>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Company</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a clinical stage biopharmaceutical company focused on
discovering and developing a novel class of drugs for human
wound healing and tissue repair. Our proprietary technology is
based on the carbohydrate
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan.
This molecule binds to a specific class of receptors, known as
glucan receptors, that are expressed on the critical cells
involved in the innate healing cascade. After binding occurs,
cell signalling triggers the release of a variety of cytokines
and growth factors that initiate the healing process. We believe
our glucan technology can be employed to develop a family of
products that promote and accelerate human wound healing and
tissue repair across a broad range of medical and surgical
applications, including chronic wound care, acute wound care and
tissue inflammation. Our lead product candidate, MG3601, targets
the chronic wound care market, specifically the treatment of
skin ulcers, known as trophic ulcers. Since more than
4&nbsp;million Americans suffer from chronic, non-healing wounds
each year, we believe this market represents a large area of
unmet medical need. We completed a Phase&nbsp;II clinical trial
of MG3601 in March 2005. The results of that trial demonstrated
that MG3601 provided a statistically significant rate of
improved wound closure in comparison to placebo. We intend to
initiate a Phase&nbsp;III clinical trial for MG3601 in 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A key component of our proprietary technology is an
understanding of the structure-function relationship of the
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan
molecule. In particular, we have developed significant expertise
with respect to engineering the optimal forms of glucan
molecular structure to support commercial development of our
product candidates while maintaining clinical efficacy. We
believe our technology can more fully restore wound healing by
activating the critical cells involved in the healing process.
These critical cells include macrophages, which initiate the
healing cascade, fibroblasts, which initiate the necessary
collagen matrix formation, vascular endothelial cells, which
promote angiogenesis (blood vessel formation), epithelial cells,
which contribute to skin closure, and neutrophils (white blood
cells), which contribute to infection control. To date, we have
developed two active compounds known as Glucoprime and Glucocol.
Glucoprime has been engineered as the active ingredient for
therapeutic indications utilizing topical application. Glucocol
has been engineered for intra-body therapies including the
treatment of tendons, ligaments, joints and bones.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MG3601, containing Glucoprime as its active ingredient, is an
aseptic topical product for the treatment of trophic ulcers.
Trophic ulcers are associated with venous insufficiency,
arterial insufficiency, diabetes or pressure. These are often
deep or large wounds that are prone to serious infection and
further complications due to the extent of tissue damage or the
compromised state of the patient&#146;s health. These wounds are
often difficult, or in the worst cases, impossible to heal
quickly and successfully with conventional products. In severe
cases, sepsis can result, which may lead to amputation and in
some cases death. We have completed a Phase&nbsp;II clinical
study of MG3601 in patients with chronic trophic ulcers,
specifically deep venous stasis ulcers of the legs. The trial
was conducted in Australia and involved 60&nbsp;patients.
Patients were randomized either to a placebo arm or to low-dose
(0.1% Glucoprime) or high-dose (1.0% Glucoprime) arm. The trial
was double-blinded, which means that neither the patient nor the
person administering the treatment knew whether the placebo or a
Glucoprime product was being administered. MG3601 was assessed
for its effects on both the rate of wound closure and the degree
of healing. In July 2005, we released the results of this
Phase&nbsp;II clinical trial. Both active arms achieved a
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">1
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="left" style="font-size: 10pt;">
statistically significant rate of improved wound closure
compared to the placebo arm, with closure rates more than
2.8&nbsp;times that of the placebo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our second product candidate, JSD114, containing Glucocol as its
active ingredient, is being developed to accelerate healing of
surgical incisions that are at risk of dehiscence, or wound
breakdown. These wounds are typically associated with major
surgery where there is extensive tissue removal or the
occurrence of lymphedema following the removal of lymph nodes.
Closure of these wounds can present major difficulty and may
require extended hospitalization, which makes this an area of
significant unmet medical need in the field of surgical practice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We were incorporated in May 1999 as a wholly-owned subsidiary of
Novogen Limited, an Australian registered company, and commenced
operations in May 2003.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Strategy</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business plan is to continue to develop new product
candidates based on our proprietary glucan technology
specifically engineered for therapeutic applications in large
areas of unmet medical need. Our immediate priority is to submit
an investigational new drug application, or IND, to the FDA for
MG3601 and to conduct a Phase&nbsp;III clinical trial in the
United States using MG3601 for the treatment of venous stasis
ulcers. Additionally, we intend to continue pre-clinical
development of JSD114 and advance that product candidate into
human clinical trials. We also intend to use our glucan
technology to develop product candidates for intra-operative and
injection applications in tendon, ligament and bone surgeries
and injuries.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Relationship with Novogen</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
From its inception in 1994, Novogen has focused its research and
development efforts in the glucan and phenolic drugs areas.
Given the distinctiveness of the two technologies, plus the
increasing focus of Novogen on its phenolic drug technology
platform, Novogen has decided to segregate the two technologies
into separate businesses, and in so doing, provide greater
strategic focus on the development of the glucan technology
platform. Novogen currently owns approximately 84.3% of our
outstanding common stock, and, upon completion of this offering,
will own approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;% of our
common stock on a fully-diluted basis.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen has granted to us, pursuant to an amended and restated
technology license agreement, an exclusive, worldwide,
non-transferable license to use and exploit the glucan
technology, which includes glucan patent rights, know-how and
any developments in relation to the patent rights and know-how,
solely in the fields of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous stasis ulcers, diabetic ulcers and
    burns in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prevention and treatment of ultraviolet light induced skin
    damage in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    joint repair, particularly with artificial joints in
    humans;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of poorly healing surgically dissected or transected
    tissue in humans.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the amended and restated technology license
agreement, we have entered into an amended and restated
manufacturing license and supply agreement, an amended and
restated services agreement, and an amended and restated agency
agreement with Novogen.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">2
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Market Opportunity</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The markets for human wound healing and tissue repair products
are large and growing. Initially, we plan to address the market
for chronic wound care with our lead product candidate, MG3601,
for the treatment of trophic ulcers. Trophic ulcers, in
particular venous stasis ulcers, are characteristically
difficult and slow to heal, often requiring care over periods of
several months to as long as many years. In severe cases
amputation is the only surgical intervention available to treat
these ulcers, in particular, those stemming from arterial
insufficiency associated with diabetes. Trophic ulcers primarily
occur in patients that are past middle age and represent a
significant community health problem. For example, according to
the wound care trade publication, <I>Advances in Skin&nbsp;&#38;
Wound Care,</I> the estimated per-episode cost of care for
venous stasis ulcers can exceed $40,000. To further illustrate
the importance of this market, the Centers for Disease Control
and Prevention, or CDC, estimates that approximately 85% of
lower extremity amputations in diabetic patients in the United
States are preceded by a foot ulcer. We believe that there is a
large unmet medical need for human wound healing and tissue
repair products such as MG3601 that have the potential to
accelerate the wound healing process significantly.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Business Communications Company, Inc., an industry research
group, estimates that the global advanced wound care market
totaled $2.0&nbsp;billion in 2004 and is expected to reach
$2.8&nbsp;billion by 2008. Business Communications further
estimates that the chronic wound market segment accounts for the
largest portion of revenues in the advanced wound care market
with 42% of the market and estimated revenues of
$722&nbsp;million in 2003. According to the National Institutes
of Health Clinical Center, each year more than 4&nbsp;million
Americans suffer from chronic non-healing wounds. We believe a
number of significant market trends will continue to expand the
market including the aging of the general population, increasing
rates of obesity, heightened interest in advanced dressings,
increased pressure by hospitals and healthcare providers to
discharge patients earlier and growth in the incidence and
prevalence of diabetes.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks of Our Business</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have a limited operating history and since our inception we
have incurred losses, including net losses of $363,000 and
$141,000 for the years ended June&nbsp;30, 2005 and
June&nbsp;30, 2004, respectively. Since our inception through
June&nbsp;30, 2005, we have sustained cumulative net losses of
$510,000. We anticipate that we will incur operating losses and
negative cash flow for the foreseeable future. To date we have
not commercialized any products and cannot be sure that we will
ever be able to do so, or that we may ever become profitable. We
currently have only one product candidate in clinical trials and
if we are unable to successfully develop and commercialize that
product candidate or develop other viable product candidates
using our glucan technology, including JSD114, our ability to
sustain future operations will be diminished. We have not yet
submitted an IND for MG3601, and we do not know whether or when
an IND for this product candidate will become effective. We have
not received marketing approval to commercialize MG3601 or other
product candidates, and therefore we have not generated revenues
from the distribution and sale of any product candidates.
Clinical trials have a high risk of failure and any failure
could impair the commercial prospects for our product
candidates. Furthermore, because we currently depend on Novogen
for our personnel and our supply of glucan, any failure by
Novogen to meet our staffing needs or to supply sufficient
quantities of glucan may hinder our operations and prospects for
growth. Additionally, we may require assistance from Novogen to
protect the intellectual property rights related to our glucan
technology.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Address and Telephone Number</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our principal executive office is located at 140 Wicks Road,
North Ryde NSW 2113, Australia, and our telephone number is
(011)&nbsp;61&nbsp;2&nbsp;8877-6177.
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 26%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Glucoprime<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>
and
Glucocol<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant:SMALL-CAPS">tm</FONT></SUP>
are trademarks of Novogen and are exclusively licensed to us.
Other service marks, trademarks and trade names referred to in
this prospectus, such as Regranex and Vacuum-Assisted Closure
system, are the property of their respective owners.
</DIV>
</DIV>

<P align="center" style="font-size: 10pt;">3
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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>This Offering</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt;">

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

<TR>
    <TD valign="top">
    Securities Offered</TD>
    <TD></TD>
    <TD valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;common
    stock units, each unit consisting of one share of common stock
    and one warrant to purchase a share of our common stock</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Warrant Terms</TD>
    <TD></TD>
    <TD valign="top">
    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;&nbsp;per
    share. The warrants are immediately exercisable and
    expire &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;years from their date
    of issuance. The expiration date may not be extended without an
    amendment to the warrant agreement by us and the warrant agent.
    We do not have the right to call or otherwise redeem the
    warrants.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Over-allotment Option</TD>
    <TD></TD>
    <TD valign="top">
    We have granted Janney Montgomery Scott LLC an option to
    purchase additional common stock units representing up to 15% of
    the units sold in this offering to cover over-allotments, if any.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Common Stock to be Outstanding After this Offering</TD>
    <TD></TD>
    <TD valign="top">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    if the underwriter&#146;s over-allotment option is exercised in
    full) not including the shares
    (&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    if the over-allotment option is exercised in full) of common
    stock underlying the warrants offered hereby.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Use of Proceeds</TD>
    <TD></TD>
    <TD valign="top">
    We intend to use the net proceeds of this offering to conduct a
    Phase III clinical trial in the United States for MG3601, for
    salary and other staff costs, and to expand our research and
    product development program. The remainder of the net proceeds
    will be used for leasing office and manufacturing facilities and
    for general corporate purposes, including payments to Novogen
    under the terms of our agreements with them. See &#147;Use of
    Proceeds.&#148;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Proposed Nasdaq Symbol</TD>
    <TD></TD>
    <TD valign="top">
    GLTX&nbsp;&#151; common stock</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="top">
    GLTXW&nbsp;&#151; warrants</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top">
    Risk Factors</TD>
    <TD></TD>
    <TD valign="top">
    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 investing in our common stock units.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The number of shares of our common stock to be outstanding
immediately after this offering is based on the number of shares
outstanding as
of &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;,
2005. The number does not
include &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of common stock reserved for issuance upon exercise of options
that may be granted subsequent
to &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;,
2005 under our Equity Compensation Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Except as otherwise indicated, all information in this
prospectus assumes:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    no exercise of the underwriter&#146;s over-allotment option; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the sale
    of &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;common
    stock units 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 page of
    this prospectus.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt;">4

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<DIV style="width: 100%; border: 1px solid black; padding: 12px;">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Summary Historical Financial Data</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a development stage company. The following table sets
forth our summary historical financial data derived from our
audited financial statements for the years ended June&nbsp;30,
2005, June&nbsp;30, 2004, and June&nbsp;30, 2003 included in
this prospectus. The financial statements for the years ended
June&nbsp;30, 2005, June&nbsp;30, 2004, and June&nbsp;30, 2003
have been audited by BDO, independent Registered Public
Accounting Firm. 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 financial statements and the
notes thereto included elsewhere in this prospectus.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>May&nbsp;5, 1999</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Inception)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended June 30,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>June&nbsp;30,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(In thousands, except share and per share data)</B></TD><TD></TD>
</TR>

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

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss per common share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.17</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.07</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average number of shares used to calculate loss per
    share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,151,103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock outstanding at period end</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,377,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Year Ended</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>June&nbsp;30,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

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

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181</TD>
    <TD>&nbsp;</TD>
</TR>

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

<P align="center" style="font-size: 10pt;">5

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<DIV align="left" style="font-size: 10pt;">
<A name='102'></A>
</DIV>

<!-- link1 "RISK FACTORS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>RISK FACTORS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>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 and warrants
could decline and investors might lose all or part of their
investment.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks Related to Our Business</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 May
1999, we have only been in operation since May 2003. During May
2003, we raised $A500,000 (approximately $328,000) in a private
placement of shares of common stock and warrants, and in
November 2004 we received a further $A900,000 (approximately
$672,000) upon exercise of the warrants that were issued in
connection with the May 2003 private placement. In addition, in
April 2005 we raised an additional $4.0&nbsp;million in a
private placement of shares of our common stock. We have
incurred net losses since our inception, including net losses of
$363,000 and $141,000 for the years ended June&nbsp;30, 2005 and
June&nbsp;30, 2004, respectively. We anticipate that we will
incur operating losses and negative cash flows 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, expand our research and development program
significantly and invest in capital expenditures, which will
result in increasing losses, and we may continue to incur
substantial losses even if we begin to generate revenues from
the distribution and sale of products using our glucan
technology.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If we are unable to successfully develop and commercialize
    MG3601, JSD114 or other product candidates we develop using our
    glucan technology, our ability to sustain future operations will
    be significantly diminished.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have developed two active ingredients, Glucoprime and
Glucocol, using our glucan technology and are currently
developing MG3601, which contains Glucoprime as its active
ingredient, and JSD114, which contains Glucocol as its active
ingredient. We can provide no assurance that MG3601, JSD114 or
other product candidates we develop using our glucan technology
will be commercially successful. Although we have rights to
develop other related compounds discovered and developed by
Novogen under the terms of our technology license agreement with
Novogen, our rights under our technology license agreement with
Novogen are limited to the worldwide commercialization of
product candidates developed using our glucan technology solely
in the fields specified in the technology license agreement. If
we are unable to successfully develop and commercialize our
products using our glucan technology, we may be required to
cease or reduce our operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We will need to raise additional funds to commercialize
    MG3601, JSD114 and other product candidates we develop, and the
    actual amount of funds we will need will be determined by a
    number of factors, some of which are beyond our control.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Based on our current plans, we believe that the net proceeds of
this offering will provide sufficient funds to commence and
complete a Phase III pivotal clinical trial in the United States
relating to the use of MG3601 to treat venous stasis ulcers. We
will require additional funds, however, to pursue the
commercialization of MG3601, JSD114 and any product candidate we
develop using our glucan technology.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

</TABLE>

<P align="center" style="font-size: 10pt;">6

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the costs and timing of marketing approvals; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our ability to enter into strategic marketing alliances.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Because the MG3601 and JSD114 product candidates we are
    developing and other product candidates we intend to develop are
    based on new technologies, the market may not be
    receptive.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The commercial success of any product candidates we develop, if
approved for marketing, will depend upon their acceptance by the
medical community and private and government third-party payors
as clinically useful, cost-effective and safe. The product
candidates we are developing are based upon new
carbohydrate-based drug technologies. As a result, it may be
more difficult for us to achieve market and third-party payor
acceptance of our products, particularly the first products that
we introduce to the market. Our efforts to educate the medical
and third-party payor communities on these potentially unique
approaches may require greater resources than would be typically
required for products based on conventional technologies. The
safety, efficacy, convenience and cost-effectiveness of our
products as compared to competitive products will also affect
market acceptance.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We have not yet submitted an investigational new drug
    application (IND) with the FDA for MG3601 and until an IND
    becomes effective, we will not be able to perform human clinical
    trials in the United States using our MG3601 product
    candidate.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Although we have conducted Phase I and Phase II clinical trials
of MG3601 in Australia, we have not yet submitted an IND with
the FDA. Until an IND becomes effective, we will not be able to
perform human clinical trials of our MG3601 product candidate in
the United States and it may be more difficult for us to obtain
the marketing approval necessary to sell MG3601 in the United
States. With an IND, we will benefit from FDA review and comment
on the protocol, which may improve the quality and acceptability
of data included in the submission for marketing approval.
Approval to begin clinical testing in the United States requires
submission of adequate information on the safety and
manufacturing of MG3601 to assure the proper quality, purity,
and strength of the investigational product, the proposed
protocol for any planned clinical study, and a brief description
of the overall plan for investigating the product. Although we
are in the process of preparing an IND to be submitted to the
FDA, we do not know whether or when the IND will become
effective.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Any failure in our clinical trials could impair the
    commercial prospects for MG3601.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. While we have not had any material delays in
our clinical testing program, 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 MG3601 or other product
</DIV>

<P align="center" style="font-size: 10pt;">7

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<DIV align="left" style="font-size: 10pt;">
candidates we develop using our glucan technology may be
impaired and we may be required to cease or reduce our
operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If we do not receive marketing approval for product
    candidates we develop, or such approval is withdrawn, we will
    not be able to commercialize our products.</I></B></TD>
</TR>

</TABLE>

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We need marketing approval from the FDA to commercialize MG3601,
JSD114 or other product candidates we develop in the United
States. We will also need marketing approval from the regulatory
authorities in any other country in which we intend to
commercialize our glucan product candidates. It may be difficult
to obtain marketing approval for this novel technology, and we
may never receive marketing approval, or if we do receive
marketing approval, it will be limited to those wound healing
states and conditions for which our product candidates have been
proven to be safe and effective. Marketing approval, if granted,
can be withdrawn for failure to comply with regulatory
requirements or upon the occurrence of adverse events following
commercial introduction. If we cannot commercialize our product
candidates, we may be required to cease or reduce our
operations. We cannot assure you that we will not encounter
delays, difficulties or adverse events in the regulatory process
in the future.
</DIV>

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    <TD width="3%"></TD>
    <TD width="97%"></TD>
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    <TD></TD>
    <TD>
    <B><I>Our ability to achieve profitability is dependent on a
    number of factors, many of which are beyond our control.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our ability to achieve profitability is dependent on a number of
factors including:
</DIV>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    completing our clinical trial program and receiving marketing
    approval. Clinical testing is a prerequisite to the receipt of
    the marketing approval necessary to commercialize MG3601, JSD114
    or other product candidates we develop using our glucan
    technology. We must demonstrate the safety and effectiveness of
    our product candidates to the satisfaction of regulatory
    authorities to obtain marketing approval. We cannot control the
    outcome of our testing program or whether we receive marketing
    approval. We will not be able to generate sales revenues until
    we receive marketing approval.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    establishing strategic partnerships to market and sell the
    active ingredients, Glucoprime or Glucocol, or the finished
    formulated products. Our negotiating position with potential
    strategic partners will be affected by the success of our
    clinical program. If we are unable to attract partners and
    negotiate favorable terms, we may have difficulty generating
    revenues from commercialization of our glucan product candidates.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    maintaining a low cost operation and scalable supply of our
    product candidates in order to meet the demands of the
    commercial market. Although we plan to build our own
    manufacturing facility, until we are able to do so we will need
    to source our product requirements from Novogen.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our ability to commercialize new compounds based on our glucan
    technology. Under the terms of our technology license agreement
    with Novogen, we are entitled to commercialize and develop other
    product candidates using our glucan technology in the fields
    that have been licensed to us. If we decide to develop other
    product candidates based on our glucan technology, our success
    may depend on controlling the costs of developing such new
    compounds. The cost to develop these compounds is unpredictable,
    and dependent upon many factors, which are difficult to control.</TD>
</TR>

</TABLE>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Because our glucan technology may require development of
    novel manufacturing processes, we may not be able to demonstrate
    to the satisfaction of regulatory authorities that our
    manufacturing and quality controls are adequate for marketing
    approval.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To obtain marketing approval, we will be required to demonstrate
to the satisfaction of regulatory authorities that our
manufacturing and quality controls are adequate. Although we
intend to construct a pilot-scale manufacturing plant to produce
clinical trial quantities of our product candidates, until we
are able to do so we will depend on Novogen to satisfy the
regulatory authorities since we currently rely on Novogen to
manufacture our glucan product candidates. The product
candidates we are developing are
</DIV>

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based upon new technology, and may require novel manufacturing
processes. In addition to submitting information on the
physicochemical properties of the active ingredients we have
developed, we will be required to demonstrate the adequacy of
our physicochemical characterization studies, quality controls
for identity, purity and potency, stability studies, sterility
assays, and formulation. If this chemistry, manufacturing, and
controls information is not satisfactory, we will not receive
marketing approval for MG3601, JSD114 or other product
candidates we develop using our glucan technology.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

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    <TD></TD>
    <TD>
    <B><I>We currently have no control over the costs of
    manufacturing our glucan product candidates and increases in
    these costs would increase the costs of conducting clinical
    trials and could adversely affect future profitability if these
    costs increase significantly.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to use a portion of the net proceeds of this offering
for capital expenditures on laboratory equipment and a
pilot-scale manufacturing plant in order to produce clinical
trial quantities of our glucan product candidates and on
manufacturing equipment in order to produce commercial
quantities of our glucan product candidates. However, we
currently do not manufacture our glucan product candidates and
we will be relying on Novogen for supplies of our glucan product
candidates for clinical trials. Glucoprime, Glucocol and other
forms of glucan are supplied to us in their primary manufactured
form by Novogen under our manufacturing license and supply
agreement with Novogen. The cost of manufacturing the glucan is
charged to us on a cost-plus markup basis. Once we construct our
own pilot-scale manufacturing plant, we intend to exercise our
right under the manufacturing license and supply agreement to
terminate that agreement by paying Novogen a termination fee of
$250,000. In the event we elect to terminate the manufacturing
license and supply agreement, the royalty we pay to Novogen
under the technology license agreement will increase from 2% to
4%. See &#147;Certain Relationships on Related
Transactions&nbsp;&#151; The Amended and Restated Technology
License Agreement&nbsp;&#151; Fees, Charges and Costs&#148; for
more information. Until we terminate the agreement, we will have
no control over the costs of manufacturing these products. If
the costs of manufacturing these products increases or if the
cost of the materials used to make these products increases,
these costs will be passed on to us by Novogen, making the cost
of conducting clinical trials more expensive. Once we are able
to commercialize our glucan product candidates, increases in
manufacturing costs could adversely affect our future
profitability if we are unable to pass all of the increased
costs along to our customers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Novogen materially and persistently fails to supply us with
the quantities of the glucan product candidates ordered by us by
the required date, the manufacturing license and supply
agreement permits us to contract with third party manufacturers
for the production and supply of these glucan product
candidates. Any third party manufacturer would have to satisfy
the FDA&#146;s current Good Manufacturing Practices, or cGMP,
and would have to meet our quality assurance standards. Although
we have the right under the manufacturing license and supply
agreement to at any time give a third party the information and
assistance necessary for that third party to develop a
capability to manufacture and supply us with the quantity of our
glucan product candidates required by us that exceeds the
quantity Novogen is able to supply us, it may be difficult to
negotiate acceptable terms of production with any third party
manufacturer.
</DIV>

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</TR>

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    <TD></TD>
    <TD>
    <B><I>We intend to manufacture commercial quantities of MG3601,
    JSD114 or other product candidates we develop using our glucan
    technology. If we are unable to do so, it may be difficult to
    secure an alternative source.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The manufacturing process for MG3601, JSD114 or other product
candidates we develop using our glucan technology has not been
tested in the quantities needed for commercial sales. As a
result, we may not be able to manufacture the necessary
quantities in a timely manner. In addition, in order for us to
manufacture or have manufactured commercial quantities of our
product candidates using our glucan technology, we will need to
build a new manufacturing plant which would be a scaled-up
version of the current pilot plant used by Novogen and of the
pilot-scale plant that we intend to build using a portion of the
net proceeds of this offering. If the plant proves difficult to
scale up or requires significant redesign, our ability to
commercialize our product candidates using our glucan technology
could be delayed. Any larger
</DIV>

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manufacturing plant built by us will also have to comply with
the FDA&#146;s cGMP. Also, we will require significant capital
to build the plant. Even though we intend to use a portion of
the net proceeds of this offering for capital expenditures on
manufacturing equipment, we may require further capital to
complete a new plant capable of producing commercial quantities
of our product candidates. If required, such additional capital
may not be available to us on favorable terms, if at all.
</DIV>

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</TR>

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    <TD></TD>
    <TD>
    <B><I>Our commercial opportunity will be reduced or eliminated
    if competitors develop and market products that are more
    effective or are less expensive than our products.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The human wound healing and tissue repair industry is
competitive. A number of other companies have products, medical
devices or drug candidates in various stages of pre-clinical or
clinical development that are intended for the same therapeutic
indications for which MG3601 and JSD114 are being developed.
Some of these competing therapeutic treatments have already been
commercialized. Other potential competing drugs and treatments
are further advanced in development than MG3601 and JSD114 and
may be commercialized sooner. Even if we are successful in
developing an effective product, neither MG3601 nor JSD114 may
compete successfully with products produced by our competitors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our competitors include pharmaceutical companies and
biotechnology companies, as well as universities and public and
private research institutions. Competitive products include
devices, such as methods of increasing blood flow and oxygen
tension, drugs, and biologicals, such as growth factors. We have
not conducted comparative tests to evaluate the relative
efficacy and safety of these methods versus our product
candidates. Products such as Regranex from Johnson &#38; Johnson
and Kinetic Concepts&#146; Vacuum-Assisted Closure system are
two examples of competing products that are being actively
promoted in the wound healing market for topical application.
While we believe, based on current clinical practice, that a
substantial need remains in medical and surgical practices for
products that have the ability to promote tissue repair in an
effective and safe manner, we are unable to assess the potential
of competitive product that we are aware of being developed to
meet this need to be either ahead of or better than our
glucan-based product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
Novogen, our services provider, to recruit qualified personnel,
and with us to recruit qualified personnel and to attract
partners for joint ventures and to 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 product candidates obsolete or
non-competitive.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>We may not be able to engage investigators and research
    institutions capable of conducting our clinical trials.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We rely on investigators and research institutions, of which
there are many, to conduct our clinical trials. While we have
not previously experienced problems with third parties upon whom
we rely for research or clinical trials, our reliance upon
research institutions, including hospitals and health care
clinics, provides us with less control over the timing and cost
of clinical trials and the ability to recruit patients than if
we had conducted the trials on our own. Furthermore, there is a
greater likelihood that disputes may arise with these research
institutions over the ownership of intellectual property
discovered during the clinical trials. If we are unable to reach
agreement with investigators and research institutions capable
of conducting our clinical trials on acceptable terms, or if any
resulting agreement is terminated and we are unable to quickly
replace the applicable investigator or investigational site with
another qualified investigator or site on acceptable terms, the
research could be delayed and we may be unable to complete
development, or commercialize MG3601, JSD114 or other product
candidates we develop using our glucan technology, which will
adversely affect our ability to generate operating revenues.
</DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We may not be able to establish the strategic partnerships
    necessary to market and distribute our glucan product
    candidates.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 our glucan
product candidates. We have not yet established any strategic
partnerships. Potential partners may not wish to enter into
agreements with us due to Novogen&#146;s current equity position
as our majority stockholder or our agreements with Novogen,
which agreements may include terms and provisions that these
partners are unwilling to accept. Similarly, potential partners
may be discouraged by our limited operating history.
Additionally, our relative attractiveness to potential partners
and consequently, our ability to negotiate acceptable terms in
any partnership agreement will be affected by the results of our
clinical program. For example, if MG3601 is shown to have high
efficacy in repairing a broad range of ulcers, we may generate
greater interest from potential partners than if MG3601 is
demonstrated to be less effective or applicable to a narrower
range of uses. There is no assurance that we will be able to
negotiate commercially acceptable licensing or other agreements
for the future exploitation of MG3601, JSD114 or other product
candidates we develop using our glucan technology, including the
continued clinical development, manufacture or marketing of our
glucan product candidates. 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 our glucan product candidates,
which will adversely affect our ability to generate operating
revenues.
</DIV>

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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We face a risk of product liability claims that could
    result in significant costs and may not be able to obtain
    adequate insurance.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business exposes us to the risk of product liability claims.
This risk is inherent in the manufacturing, testing and
marketing of human therapeutic products, including the risk that:
</DIV>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our proposed product candidates cause some undesirable side
    effects or injury during clinical trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our products cause undesirable side effects or injury when
    marketed; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    third parties that we have agreed to indemnify incur a related
    liability.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have product liability insurance coverage of up to
approximately $14&nbsp;million. Although we believe that this
amount of insurance coverage is appropriate for our business at
this time, it is subject to deductibles and coverage
limitations, and the market for such insurance is becoming more
restrictive. We may not be able to obtain or maintain adequate
protection against potential liabilities. If we are unable to
sufficiently insure against potential product liability claims,
we will be exposed to significant liabilities, which may
materially and adversely affect our business development and
commercialization efforts.
</DIV>

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</TR>

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Once we build our own manufacturing facilities, we may be
    liable for contamination or other harm caused by materials that
    we handle, and changes in environmental regulations could cause
    us to incur additional expense.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to use some of the proceeds of this offering to build
our own manufacturing plant to produce our glucan product
candidates. Once we do so, our research and development
processes will involve the handling of potentially harmful
biological materials as well as hazardous materials. Once our
manufacturing facilities are built, we will be subject to
federal, state and local laws and regulations governing the use,
handling, storage and disposal of hazardous and biological
materials and we will incur expenses relating to compliance with
these laws and regulations. If violations of environmental,
health and safety laws occur, we could be held liable for
damages, penalties and costs related to remedial actions. These
expenses could have a significant negative impact on our
financial condition. In addition, there is always the
possibility we may violate environmental, health and safety laws
in the future as a result of human error, equipment failure or
other causes. Environmental laws could also become more
stringent over time, imposing greater compliance costs and
increasing risks and penalties associated with violations.
Changes to or restrictions on permitting requirements or
processes, hazardous or biological material storage
</DIV>

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or handling might require an unplanned capital investment or
relocation. Our ultimate failure to comply with laws or
regulations could harm our business, financial condition and
results of operations.
</DIV>

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</TR>

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    <TD></TD>
    <TD>
    <B><I>The enforcement of civil liabilities against some of our
    officers and directors may be difficult.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Some 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 these officers and directors or to enforce judgments
obtained against these officers and directors or us in United
States courts.
</DIV>

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</TR>

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    <TD></TD>
    <TD>
    <B><I>Novogen is in the process of strengthening its internal
    control over financial reporting.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the terms of our services agreement with Novogen, Novogen
will perform our accounting and financial reporting functions.
Novogen performs this function for some of its other
subsidiaries. Novogen determined in 2004 that the personnel and
management of Novogen who perform these functions were not
sufficiently expert in U.S. GAAP and the requirements of the
Securities and Exchange Commission and the Public Company
Accounting Oversight Board, and that this lack of expertise
represented a material weakness in the operation of its internal
control over financial reporting. In addition, Novogen also
determined that its system of financial reporting was not
designed to prepare financial statements in accordance with U.S.
GAAP. Novogen&#146;s system of internal control, in particular
its processes to review and analyze elements of the financial
statement close process and to prepare financial statements in
accordance with U.S. GAAP, had not reduced to a relatively low
level the risk that errors in amounts that would be material in
relation to those financial statements might occur and might not
be detected within a timely period by management in the normal
course of business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While Novogen has undertaken a re-evaluation of its internal
controls and procedures and has implemented enhancements to
improve them, additional measures may be required in the future
to further enhance their internal controls and procedures.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We are exposed to certain potential risks from recent
    legislation requiring companies to evaluate their internal
    control over financial reporting under Section&nbsp;404 of the
    Sarbanes-Oxley Act of 2002.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will be required under Section&nbsp;404 of the Sarbanes-Oxley
Act of 2002 to evaluate our internal controls systems in order
to allow management to report on the effectiveness of our
internal control over financial reporting and our registered
independent public accounting firm to attest to this report. We
intend to perform the system and process evaluation and testing,
and implement any necessary remediation required in an effort to
comply with the management reporting and public accounting firm
attestation requirements and expect to incur significant
expenses and devote significant management time towards
completing actions required for management&#146;s evaluation.
The evaluation and attestation processes required by
Section&nbsp;404 are relatively new and public companies and
public accounting firms are still developing experience in
testing and complying with these requirements. While we intend
to develop and implement plans to fully implement the
requirements relating to internal controls and all other aspects
of Section&nbsp;404 as required by applicable law, we cannot be
certain as to the timing of completion of our evaluation,
testing and remediation actions or the impact of the same on our
operations since, like other public companies, we will undergo
the process for the first time in a regulatory environment where
the standards to assess adequacy of compliance are under
development. We cannot assure you that there may not be
significant deficiencies or material weaknesses that would be
required to be reported as a result of this process.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A portion of our expenditures and potential revenue will be
spent or derived outside of the United States. As a result,
fluctuations between the U.S. 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
</DIV>

<P align="center" style="font-size: 10pt;">12
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<DIV align="left" style="font-size: 10pt;">
transactions to protect against uncertainty in future exchange
rates between particular foreign currencies and the U.S. dollar.
</DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our certificate of incorporation, our bylaws, Delaware law
    and our agreements with Novogen contain provisions that could
    discourage another company from acquiring us and may prevent
    attempts by our stockholders to replace or remove our current
    management.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Provisions of Delaware law, our certificate of incorporation and
our bylaws may discourage, delay or prevent a merger or
acquisition that stockholders may consider favorable, including
transactions in which you would receive a premium for your
shares. In addition, these provisions may frustrate or prevent
any attempts by our stockholders to replace or remove our
current management by making it more difficult for stockholders
to replace or remove our board of directors. These provisions
include authorizing the issuance of &#147;blank check&#148;
preferred stock with rights potentially senior to those of our
common stock without any vote or action by the holders of our
common stock and providing for a classified board of directors
with staggered terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each of our agreements with Novogen may be terminated
immediately by Novogen in the event that we undergo a change in
control without the consent of Novogen. A &#147;change in
control&#148; means the acquisition by a person or group other
than Novogen of more than 50% of the combined voting power of
the then outstanding securities entitled to vote generally in
the election of our directors or any merger, consolidation,
reorganization, capitalization, tender or exchange offer or any
other transaction with or effecting us as a result of which a
person or group other than our stockholders immediately before
the transaction owns after the transaction more than 50% of the
combined voting power of the then outstanding securities
entitled to vote generally in election of our directors. A
change in control does not include any acquisition as a result
of, or transaction involving, an initial public offering of our
common stock. Each of these agreements may also be terminated if
we become the subject of certain bankruptcy proceedings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These provisions would make it difficult for a third party to
acquire us, even if such transaction would be beneficial to our
stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks Related to Our Relationship with Novogen</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our glucan technology is fundamental to our business and
    is subject to the terms and conditions of agreements we have
    entered into with Novogen. Under these agreements our rights may
    be terminated under certain circumstances, some of which may be
    beyond our control. The loss of these rights will likely cause
    us to cease operations.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have licensed our glucan technology from Novogen. Novogen has
granted us an exclusive, worldwide, non-transferable license to
use and exploit the glucan technology, which includes glucan
patent rights, know-how and any developments in relation to the
patent rights and know-how, solely in the fields of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prevention and treatment of ultraviolet light induced skin
    damage in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    joint repair, particularly with artificial joints in humans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of poorly healing surgically dissected or transected
    tissue in humans.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">13

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The rights granted to us under the technology license agreement
and the manufacturing license and supply agreement with Novogen
are fundamental to our business. If we fail to meet our
obligations under our technology license agreement, agency
agreement, manufacturing license and supply agreement or
services agreement with Novogen, any or all of these agreements
may be terminated by Novogen and we could lose our rights to
develop glucan product candidates. Any loss of the rights under
any of these agreements will likely cause us to cease
operations. See &#147;Certain Relationships and Related
Transactions&#148; for a description of our principal
obligations under our agreements with Novogen. As of the date of
this prospectus, we have no reason to believe that we will be
unable to satisfy our obligations under these agreements.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>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 or our other stockholders&#146;
    interests.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon completion of this offering, Novogen will beneficially own
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of our outstanding shares of common stock on a fully-diluted
basis. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Our success depends in part on recruiting and retaining
    personnel and we are currently dependent on key personnel whose
    services are provided to us by Novogen under our services
    agreement. If we are not able to procure these services in the
    future, the strategic direction of the clinical development
    program would be disrupted, causing a delay in our
    commercialization program.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our success depends on our continued ability to attract, retain
and motivate highly qualified management, clinical and
scientific personnel. We currently have no employees and we rely
on Novogen to provide or procure staff and perform other
financial and administrative services under our services
agreement with Novogen. Two of these employees, Professor Graham
Kelly, one of our executive directors, and Mr.&nbsp;Christopher
Naughton, our Chairman, provide us with the strategic direction
for the clinical development of our glucan product candidates.
Although Novogen has entered into employment agreements for each
of these persons, we do not maintain any key man life insurance
policies for them. If we lose the services of our key Novogen
personnel and if we are unable to secure new personnel, our
ability to develop glucan product candidates could be materially
impaired. In particular, because Professor&nbsp;Kelly developed
the glucan technology that we have licensed from Novogen, the
loss of his services would significantly affect our ability to
direct the research and development efforts for our product
candidates. While we intend to hire our own management personnel
to oversee the expansion of our operations to the United States,
we cannot assure you that we will successfully locate, hire,
assimilate and retain qualified key management personnel to
supplement or take the place of Novogen personnel who provide
services to us under the services agreement. If we are unable to
secure the ongoing services of key personnel, the
commercialization program for MG3601, JSD114 and other product
candidates we develop using our glucan technology will be
disrupted and will cause delays in obtaining marketing approval.
</DIV>

<P align="center" style="font-size: 10pt;">14

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>The ongoing criminal investigation involving Professor
    Kelly, our President and Chief Executive Officer, could have a
    material adverse effect on our business or cause our stock price
    to decline.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Professor Kelly is one of a number of individuals who, and whose
associated entities and advisors, have been the subject of
investigations by certain Australian authorities relative to
their alleged involvement in the evasion of Australian tax,
fraud and money laundering. Professor Kelly has informed us that
he does not believe that he has committed any wrongdoing and
denies that he has been involved in any wrongdoing.
Nevertheless, Professor Kelly may need to allocate time and
resources to deal with the investigation. Additionally, if the
Australian authorities were to decide to prosecute Professor
Kelly upon concluding their investigation and if such
prosecution were to result in a conviction, Professor Kelly may
be barred from acting as an officer or director and may become
unavailable to us. Any publicity related to this investigation
or the potential prosecution or conviction of Professor Kelly
could have a material adverse effect on our business or cause
our stock price to decline.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>All of our directors are officers and/or directors of
    Novogen and other Novogen subsidiaries, which may create a
    conflict of interest as well as prevent them from devoting their
    full attention to us.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of our board members, including our Chairman, currently
serve as board members or officers of Novogen. Simultaneous
service as a Novogen director or officer can create, or appear
to create, a conflict of interest when such directors are
presented with decisions that could have different implications
for us and Novogen. In addition, Professor Kelly is the chairman
and a director of Marshall Edwards, Inc., a U.S. public company
and a subsidiary of Novogen, Mr.&nbsp;Naughton is the president,
chief executive officer and a director of Marshall Edwards and
Mr.&nbsp;Seaton is the chief financial officer and secretary of
Marshall Edwards. Their responsibilities to Novogen and Marshall
Edwards prevent them from devoting their full attention to us,
which could be harmful to the development of our business.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have no contract, arrangement or understanding with Novogen
to preclude it from using technology, other than our glucan
technology, to develop a product for human wound healing and
tissue repair that may be competitive with product candidates we
develop. In addition, Novogen has reserved the intellectual
property rights and know-how rights relating to glucan in fields
other than those specifically licensed to us under the
technology license agreement. 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 MG3601, JSD114 or other product
candidates we develop using our glucan technology that we seek
to exploit. If Novogen seeks to develop a product for human
wound healing and tissue repair using technology other than our
glucan technology, our business will be harmed.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks Related to Regulatory Matters</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If the data from our pre-clinical trials and clinical
    studies does not demonstrate the safety and effectiveness of
    MG3601, JSD114 or other product candidates we develop to the
    FDA&#146;s satisfaction, we will not receive approval to market
    our product candidates in the United States.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To obtain FDA approval for marketing, our pre-clinical and
clinical studies must demonstrate that MG3601, JSD114 or other
product candidates we develop using our glucan technology, is
safe and effective for each indication for which approval is
sought. The FDA&#146;s grant of permission to proceed with
clinical trials does not constitute a binding commitment that
the FDA will consider the trial design adequate to support
approval, or that the data generated during pivotal trials will
meet the safety and effectiveness endpoints, or otherwise
produce results that will lead the FDA to grant marketing
approval. If the FDA concludes that the data from our clinical
trials have failed to demonstrate the safety and effectiveness
of our investigational products, we will not receive FDA
approval to market our product candidates in the United States.
We will also need to satisfy the safety and effectiveness
requirements of the government regulations in any other country
where we intend to sell our products.
</DIV>

<P align="center" style="font-size: 10pt;">15

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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We may not complete our pivotal Phase III clinical trial
    on schedule, or at all, or it may be conducted improperly, which
    may delay or preclude FDA marketing approval or the approval of
    another regulatory authority.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to use a portion of the net proceeds of this offering
to conduct a pivotal Phase III trial in the United States for
MG3601. The completion of our pivotal trial may be delayed or
terminated for many reasons, including, but not limited to, if:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the FDA does not grant permission to proceed and places the
    trial on clinical hold;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    subjects do not enroll in our pivotal trial at the rate we
    currently expect;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    subjects experience an unacceptable rate or severity of adverse
    side effects;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    third party clinical investigators do not perform our pivotal
    trial on our anticipated schedule or consistent with the
    clinical trial protocol, Good Clinical Practice and regulatory
    requirements, or other third parties do not perform data
    collection and analysis in a timely or accurate manner;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    inspections of our clinical trial sites by the FDA or
    Institutional Review Boards, or IRBs, find regulatory violations
    that require us to undertake corrective action, suspend or
    terminate one or more sites, or prohibit us from using some or
    all of the data in support of our marketing applications;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    one or more IRB suspends or terminates the trial at an
    investigational site, precludes enrollment of additional
    subjects, or withdraws its approval of the trial;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    one or more of our clinical investigators withdraws from our
    trials or deviates from our approved protocol; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the trial reveals that MG3601 is ineffective, inferior to
    existing approved drugs, unacceptably toxic or has other
    unacceptable side effects.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our development costs will increase if we have material delays
in our pivotal trial, or if we are required to modify, suspend,
terminate or repeat the pivotal trial.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Final approval by the FDA or another regulatory authority
    of MG3601, JSD114 or other product candidates we develop using
    our glucan technology for commercial use may be delayed, limited
    or prevented, any of which would adversely affect our ability to
    generate operating revenues.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Any of the following factors may serve to delay, limit or
prevent the final approval by the FDA or another regulatory
authority of MG3601, JSD114 or other product candidates we
develop using our glucan technology for commercial use:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    MG3601 is in clinical development and JSD114 is in pre-clinical
    development and we will need to have an effective IND and
    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 MG3601 or JSD114 for marketing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the commercialization of MG3601 and JSD114 may be delayed if the
    FDA or another regulatory authority requires us to expand the
    size and/or scope of the clinical trials or requires us to
    perform additional clinical trials.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">16

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While we have not encountered any material delays or adverse
events from the factors described above to date, we cannot
assure you that such delays or adverse events will not be
encountered in the future.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>If we fail to obtain an adequate level of reimbursement
    for our products by third-party payors, there may be no
    commercially viable markets for our products.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our ability or the ability of any of our collaborators to
commercialize our products, if any, may depend in part on the
extent to which government health administration authorities,
private health insurers, and other organizations will reimburse
consumers for the cost of treatment. These third-party payors
continually attempt to contain or reduce the costs of healthcare
by challenging both the need, and the prices charged for medical
products and services. In certain foreign countries,
particularly the countries of the European Union, the pricing of
prescription pharmaceuticals is subject to governmental control.
Significant uncertainty exists as to the reimbursement status of
newly approved therapeutics. We may not be able to sell our
products profitably if reimbursement is unavailable or limited
in scope or amount. In both the United States and certain
foreign jurisdictions, there have been a number of legislative
and regulatory changes to the healthcare system for coverage and
reimbursement. Further proposals are likely. These changes
affect or will affect our ability to market our products and the
coverage and scope of reimbursement for them.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks Related to Our Intellectual Property</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. Novogen has not been involved
in any opposition, re-examination, trade secret dispute,
infringement litigation or any other litigation or legal
proceedings pertaining to the licensed patent rights.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 glucan product
candidates. We have licensed both issued patents and pending
patent applications from Novogen. Novogen has issued patents in
the United States, Australia and the United Kingdom that,
depending on the jurisdiction, cover the use of glucan
generally, or glucan made by a specific process, in the
treatment of trophic ulcers, including venous stasis and
decubitus ulcers, bone fracture, and tendon injury.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 our ability to obtain and maintain
effective patent protection for the glucan technology, and to
successfully defend patent rights in that technology 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 lags 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
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
</DIV>

<P align="center" style="font-size: 10pt;">17

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<DIV align="left" style="font-size: 10pt;">
competitors, will not successfully challenge our patents or
circumvent our patent position in the United States or abroad.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We may not be able to prevent others, including potential
    competitors, from using the forms of glucan other than those for
    which Novogen currently has, or may later be issued, patent
    claims for the treatment of trophic ulcers and surgical
    incisions.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The production of various glucan product candidates and the use
of such product candidates to promote human wound healing and
tissue repair are in the public domain and therefore cannot now
be patented by us or by Novogen. Consequently, we are able to
pursue patent protection only for new and non-obvious glucan
compositions, such as the form present in Glucoprime and
Glucocol, the process we use to manufacture Glucoprime, for the
use of these compositions in human skin ulcer healing and tissue
repair and, we believe, for the use of a variety of glucan
compositions, including Glucocol, to promote healing of surgical
incisions, treatment of skin ulceration, treatment of injured
connective tissue including tendons and ligaments, and treatment
of bone fracture/enhancement of orthopedic procedures. As a
result, we may not be able to prevent other companies using
different glucan compositions and different manufacturing
processes from developing active glucan product candidates that
directly compete with our forms of glucan.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The pharmaceutical industry is highly competitive and patents
have been applied for by, and issued to, other parties relating
to glucan products, methods of preparing glucan products and
relating to methods and compositions that are not based on
glucan but which are competitive with our product candidates in
treatment of wound healing. Therefore, MG3601, JSD114 and other
product candidates we develop using our glucan technology 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<P align="center" style="font-size: 10pt;">18

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Risks Related to this Offering</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>An active trading market for shares of our common stock or
    our warrants may not develop following their listing on the
    Nasdaq National Market.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to this offering, there has not been a public trading
market for our common stock or our warrants. An active, liquid
trading market for our common stock or warrants may not develop
or be maintained following this offering. As a result, you may
not be able to sell your shares or warrants 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, which may not be
indicative of prices that will prevail in the U.S. trading
market for the common stock. The market price of our common
stock and warrants on the Nasdaq National Market may decline
below the initial offering price, and you may not be able to
resell your shares of our common stock or your warrants at or
above the initial offering price for the common stock units.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The trading price of our common stock and warrants could be
highly volatile in response to various factors, many of which
are beyond our control, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    developments concerning MG3601, JSD114 or other product
    candidates we develop using our glucan technology;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. Furthermore,
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
and warrants, 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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Future sales of our common stock may depress our stock
    price.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The market price of our common stock could decline as a result
of sales of substantial amounts of our common stock in the
public market after this offering, or the perception that these
sales could occur. In addition, these factors could make it more
difficult for us to raise funds through future equity offerings.
</DIV>

<P align="center" style="font-size: 10pt;">19

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<DIV align="left" style="font-size: 10pt;">
There will
be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock outstanding immediately after this offering,
not including the &nbsp;shares of common stock underlying the
warrants offered hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of the shares of our common stock sold in this offering will
be freely transferable by persons other than our affiliates
without restriction or further registration under the Securities
Act. The remaining &nbsp;shares of common stock outstanding will
be &#147;restricted securities&#148; as defined in Rule&nbsp;144
of the Securities Act. These shares may be sold in the future
without registration under the Securities Act to the extent
permitted by Rule&nbsp;144 or other exemptions under the
Securities Act. See &#147;Securities Eligible for Future
Sale.&#148;
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect the initial public offering price of our common stock
units to be substantially higher than the net tangible book
value per share of the outstanding common stock. Accordingly,
investors purchasing units in this offering will pay a price per
unit that substantially exceeds the value of our assets after
subtracting our liabilities. As a result, you will incur
immediate and substantial dilution of
$&nbsp;&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 at June&nbsp;30, 2005 after giving
effect to this offering and the initial public offering price.
In addition, purchasers of our common stock units 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 common
stock, but will own only
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the shares outstanding after this offering based on the
number of shares of our common stock outstanding as of
June&nbsp;30, 2005. We may also acquire other companies or
technologies or finance strategic alliances by issuing equity,
which may result in additional dilution to our stockholders.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>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.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    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</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>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.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The warrants will entitle the holders to purchase one share of
our common stock at an exercise price equal
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the initial public offering price anytime after issuance
until the warrants expire on
the &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We will have broad discretion over the use of the net
    proceeds to us from this offering.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We will have broad discretion to use the net proceeds to us from
this offering, and you will be relying on the judgment of our
board of directors and management regarding the application of
these proceeds. Although we expect to use a substantial portion
of the net proceeds from this offering for general corporate
</DIV>

<P align="center" style="font-size: 10pt;">20

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<DIV align="left" style="font-size: 10pt;">
purposes, including leasing office and manufacturing facilities,
we have not allocated these net proceeds for specific purposes.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>We do not intend to pay dividends in the foreseeable
    future.</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not currently pay any cash dividends on our common stock
and do not anticipate paying any cash dividend in the
foreseeable future. We intend to retain future earnings to fund
our growth. Accordingly, you will receive a return on your
investment in our common stock only if our common stock
appreciates in value. You may therefore not realize a return on
your investment even if you sell your shares.
</DIV>

<P align="center" style="font-size: 10pt;">21

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<DIV align="left" style="font-size: 10pt;">
<A name='103'></A>
</DIV>

<!-- link1 "SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the failure to locate, hire, assimilate and retain qualified
    personnel;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the inability to construct a pilot-scale manufacturing facility
    to supply us with glucan product candidates for our clinical
    trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the inability to obtain manufacturing equipment and build a
    manufacturing facility capable of producing commercial
    quantities of our glucan product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our inability to obtain any additional required financing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our failure to successfully commercialize our product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    costs and delays in the development and/or receipt of FDA or
    other required governmental approvals, or the failure to obtain
    such approvals, for our product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    uncertainties in clinical trial results;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our inability to maintain or enter into, and the risks resulting
    from our dependence upon, collaboration or contractual
    arrangements necessary for the development, manufacture,
    commercialization, marketing, sales and distribution of any
    products;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our inability to protect our patents or proprietary rights and
    obtain necessary rights to third party patents and intellectual
    property to operate our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our inability to operate our business without infringing the
    patents and proprietary rights of others; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the failure of any product candidate to gain market acceptance.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<P align="center" style="font-size: 10pt;">22

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<DIV align="left" style="font-size: 10pt;">
<A name='104'></A>
</DIV>

<!-- link1 "USE OF PROCEEDS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>USE OF PROCEEDS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 over-allotment option is exercised in full), after deducting
underwriting discounts and commissions, and estimated offering
expenses.
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    We intend to use approximately $4.3&nbsp;million to conduct a
    Phase&nbsp;III pivotal clinical trial in the United States using
    MG3601 for the treatment of venous stasis ulcers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    We intend to use approximately $2.8&nbsp;million for salary and
    other staff costs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    We intend to use approximately $9.5&nbsp;million for capital
    expenditures on laboratory equipment, a pilot-scale
    manufacturing plant and equipment for the testing and production
    of commercial quantities of glucan;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    We intend to use approximately $5.0&nbsp;million for the
    expansion of the research and product development program to
    identify other forms of glucan for the formulation of new
    product candidates, including JSD114; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    We intend to use the remainder for leasing office and
    manufacturing facilities and for general corporate purposes,
    including payments to Novogen under the terms of our agreements
    with Novogen.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See &#147;Certain Relationships and Related Transactions&#148;
for a description of our agreements with Novogen.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The foregoing represents our best estimate of the allocation of
the net proceeds of this offering based upon the current status
of our business. Our estimates regarding the use of proceeds are
based on certain assumptions, including the development of our
business in the way we anticipate. If any of our assumptions
prove incorrect, we may find it necessary to reallocate a
portion of the proceeds within the above-described categories or
use portions of the proceeds for other purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The timing and amount of our actual expenditures will depend on
numerous factors, including the progress of our research,
clinical trials and other development activities, the number and
breadth of our product development programs, our ability to
establish and maintain collaborations and other arrangements as
well as the amount of cash, if any, generated by our operations.
We will retain broad discretion in the allocation and use of the
net proceeds of this offering. We currently intend to invest the
funds in short-term, investment grade, interest-bearing
securities.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='105'></A>
</DIV>

<!-- link1 "DIVIDEND POLICY" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DIVIDEND POLICY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<P align="center" style="font-size: 10pt;">23

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<DIV align="left" style="font-size: 10pt;">
<A name='106'></A>
</DIV>

<!-- link1 "CAPITALIZATION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CAPITALIZATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth our capitalization as of
June&nbsp;30, 2005:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    as adjusted to reflect the effect of the sale of a total
    of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;common
    stock units in this offering, after deducting underwriting
    discounts and commissions and estimated offering expenses. See
    &#147;Use of Proceeds&#148; for more information regarding the
    determination of the expected net proceeds of this offering.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 financial
statements and the notes thereto included elsewhere in this
prospectus.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="69%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>As at June&nbsp;30, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Actual</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>As Adjusted</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

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

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock, $0.00000025 par value, 4,000,000 shares
    authorized, 2,377,778 shares issued and outstanding actual and
    shares issued and outstanding as adjusted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional paid-in capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deficit accumulated during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total capitalization</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
This table
excludes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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.
</DIV>

<P align="center" style="font-size: 10pt;">24

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

<DIV align="left" style="font-size: 10pt;">
<A name='107'></A>
</DIV>

<!-- link1 "DILUTION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DILUTION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our net tangible book value at June&nbsp;30, 2005, before
adjustment for this offering, was approximately $4,492,000, or
approximately $1.89 per share. After giving effect to the sale
of &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;common
stock units in this offering, and after deducting underwriting
discounts and commissions and the estimated offering expenses,
our as adjusted net tangible book value at June&nbsp;30, 2005
would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share. This represents an increase in net tangible book value of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to our existing stockholders and an immediate dilution
(i.e., the difference between the initial 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, 2005 of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share to purchasers of the common stock units offered hereby.
The following table illustrates this per share dilution:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="65%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Assumed initial public offering price per unit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net tangible book value per share at June&nbsp;30, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

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

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

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

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

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

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Assuming the over-allotment option is exercised in full, the net
tangible book value at June&nbsp;30, 2005 would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
or
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, the immediate increase in net tangible book value of
shares owned by existing stockholders would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share, and the immediate dilution to purchasers of the common
stock units in this offering would have been
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table summarizes at June&nbsp;30, 2005, after
giving effect to the sale
of &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;common
stock units, the number of common stock units purchased from us,
the total consideration paid to us for those units, and the
consideration given by the existing stockholders and by the new
investors assuming
approximately &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;shares
of our common stock are outstanding:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="41%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Units Purchased</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Total Consideration</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Average</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Price</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Amount</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Percent</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Per Share</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Existing stockholders</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    New investors</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">25

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

<DIV align="left" style="font-size: 10pt;">
<A name='108'></A>
</DIV>

<!-- link1 "SELECTED HISTORICAL FINANCIAL DATA" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SELECTED HISTORICAL FINANCIAL DATA</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table shows selected historical financial data for
the years ended June&nbsp;30, 2005, June&nbsp;30, 2004 and
June&nbsp;30, 2003, and for the period from May&nbsp;5, 1999
(inception)&nbsp;through June&nbsp;30, 2005. The information has
been derived from our audited financial statements for the years
ended June&nbsp;30, 2005, June 30, 2004, and June&nbsp;30, 2003,
included in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 financial statements and the notes thereto
included elsewhere in this prospectus.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="46%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>May&nbsp;5, 1999</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Inception)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended June 30,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>June&nbsp;30,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(In thousands, except share and per share data)</B></TD><TD></TD>
</TR>

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

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss per common share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.17</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.07</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average number of shares used to calculate loss per
    share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,151,103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock outstanding at period end</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,377,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Year Ended</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>June&nbsp;30,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

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

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">26
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='109'></A>
</DIV>

<!-- link1 "MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following discussion and analysis should be read in
conjunction with our financial statements and the notes thereto
appearing elsewhere in this prospectus. Our fiscal year ends
June 30. We commenced business operations in May 2003, and as a
result our financial results for the fiscal year ended
June&nbsp;30, 2004 represent our first full year of operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Results of Operations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a clinical stage biopharmaceutical company focused on
discovering and developing a novel class of drugs for human
wound healing and tissue repair. Our proprietary technology is
based on the carbohydrate
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan.
This molecule activates the innate healing cascade by binding to
a specific class of receptors, known as glucan receptors, that
are expressed on the critical cells involved in the healing
process. Our lead product candidate, MG3601, targets the chronic
wound care market, specifically the treatment of skin ulcers,
known as trophic ulcers, which we believe represent a large area
of unmet medical need. Our second product candidate, JSD114, is
being developed to accelerate healing of surgical incisions that
are at risk of dehiscence, or wound breakdown. We also intend to
use our glucan technology to develop product candidates for
intra-operative and injection applications in tendon, ligament
and bone surgeries and injuries. We are presently engaged in the
clinical development of MG3601 for the treatment of venous
stasis ulcers and the pre-clinical development of JSD114. The
technology rights relating to MG3601 and JSD114 are licensed to
us by Novogen. Our main focus during fiscal 2005 was to
undertake human clinical testing of MG3601. We do not currently
employ any staff directly but obtain our services from Novogen
under a services agreement and an agency agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have not generated any revenues from operations since our
inception. In addition, we had no operations in fiscal year 2003
except for the sale in a private placement of 50,000 shares of
our common stock to Australian and international investors and
institutions. See &#147;&nbsp;&#151; Liquidity and Capital
Resources&#148; for a description of this private placement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Operating expenses were $363,000 for fiscal year 2005 and
$141,000 for fiscal year 2004. Operating expenses in fiscal 2005
included $252,000 of costs associated with conducting the
clinical trials of MG3601 and $62,700 of costs incurred under
the technology license agreement, the services agreement and the
agency agreement with Novogen. See &#147;Certain Relationships
and Related Transactions&#148; for a description of our
agreements with Novogen. To date, there have been no costs
charged by Novogen for the supply of glucan active material
under the terms of the manufacturing license and supply
agreement as the clinical trial material used in the recent
Phase&nbsp;II trial was drawn from excess supplies manufactured
for earlier clinical trials. Glucan that is provided to us for
clinical trials will be charged to us under the terms of the
manufacturing license and supply agreement. We expect that the
cost of conducting clinical trials will increase in the future
as we undertake our planned Phase III clinical trial for MG3601.
Also, other research and development costs are expected to
increase as we expand our research and development program for
the development of new glucan product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Of the $363,000 of operating expenses incurred in fiscal year
2005, $349,000 is included under research and development
expenses, including the $252,000 of clinical trial expenses, and
$14,000 is included under selling, general and administrative
expenses in our fiscal year 2005 financial statements. Our
operating expenses increased by $222,000 in fiscal year 2005
versus fiscal year 2004 primarily as a result of increased
expenditures on our clinical trial program, which increased by
$175,000 from $77,000 to $252,000 in fiscal year 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Research and Development Expenses</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Research and development expenses consist mainly of our clinical
trial expenditures and our payments to Novogen for research
support services under the terms of the services agreement.
Research and development expenses were $349,000 in the aggregate
for the fiscal year ended June&nbsp;30, 2005, and
</DIV>

<P align="center" style="font-size: 10pt;">27
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
$138,000 for the fiscal year ended June&nbsp;30, 2004. Research
and development costs incurred since inception through the
fiscal year ended June&nbsp;30, 2005 were $493,000 in the
aggregate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expense our research and development costs as they are
incurred and we expect our research and development costs to
increase in the future as we progress MG3601&#146;s clinical
development program for the venous stasis ulcer indication,
continue the development program for other product candidates,
including JSD114, which are active in the healing cascade,
formulate new product candidates using active glucan compounds
and identify therapeutic applications for new product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All of our research and development costs to date have been
incurred in the clinical development program of MG3601.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We expect that a large percentage of our research and
development expenses in the future will be incurred in support
of our current and future clinical development programs and in
the development of new product applications using our glucan
technology. These expenditures are subject to a number of
uncertainties in timing and cost to completion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The duration and cost of clinical trials may vary significantly
over the life of a project as a result of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the number of sites included in the trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the length of time required to enroll suitable patients;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the number of patients that participate in the trials; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the efficacy and safety profile of the product.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our strategy also includes the option of entering into
collaborative arrangements with third parties to participate in
the development and commercialization of glucan product
candidates. In the event third parties have control over the
clinical development process, the completion date would largely
be under the control of that third party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As a result of these uncertainties, we are unable to determine
the duration of or completion costs for our research and
development projects or when and to what extent we will receive
cash inflows from the commercialization and sale of MG3601 or
other product candidates we may develop using our glucan
technology.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Selling, General and Administrative Expenses</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Selling general and administrative expenses consist mainly of
expenses associated with accounting and auditing, professional
fees, public relations and administration fees paid to Novogen
under the terms of the services agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Liquidity and Capital Resources</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At the end of the fiscal year ended June&nbsp;30, 2005, we had
cash resources of $4,606,000. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During May 2003, we raised $A500,000 (approximately $328,000) in
a private placement of 50,000 shares of our common stock from
Australian and international investors and institutions. The
shares were issued at $A10.00 (approximately $6.56) each with
attaching warrants to purchase an additional two shares of
common stock at an exercise price of $A10.00 (approximately
$6.56) per share. The attaching warrants were exercisable prior
to November&nbsp;5, 2004. Novogen also issued to these investors
a convertible security enabling investors to convert their
investment in us into Novogen shares at an equivalent Novogen
share price of $A5.00 (approximately $3.28) per share.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During November 2004, we received a total of $A900,000
(approximately $672,000) following the exercise of 90,000 of the
warrants that were issued as part of our May 2003 private
placement at an
</DIV>

<P align="center" style="font-size: 10pt;">28

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<DIV align="left" style="font-size: 10pt;">
exercise price of $A10.00 (approximately $7.47) per share. Also,
in November 2004, Novogen issued 10,000 of its shares following
the conversion of 5,000 shares of our common stock under the
terms of the Novogen convertible security.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2005, we issued a further 237,778 shares of common
stock in a private placement to a single investor in the United
States for a purchase price of $16.83 per share. The proceeds of
this private placement totaled approximately $4.0&nbsp;million.
After giving effect to the above transactions, Novogen owns
approximately 84.3% of our issued and outstanding capital stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that upon completion of this offering our cash
resources will be sufficient for us to implement our business
plan for at least the next two years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Contractual Obligations</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At June&nbsp;30, 2005, we had contracted to conduct research and
development expenditures of approximately $43,200. Of the
expenditure commitments, clinical trial amounts are based on the
assumption that all patients enrolled in clinical trials will
complete the maximum number of allowed treatment cycles. The
amounts expected to be incurred assuming all treatment cycles
are completed, are as follows.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap><B>Payment due by period</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>less than 1</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>More than</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Contractual Obligations</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>1 -3 Years</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>3-5 Years</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>5 Years</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap><B>(In thousands)</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase Obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have no off-balance sheet arrangements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Capital Expenditure</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of the date of this prospectus we have no commitments for any
capital expenditures. In order to supply pilot and commercial
quantities of our glucan product candidates in the future, we
will need to purchase certain capital equipment as part of
developing a manufacturing plant. See &#147;Use of
Proceeds&#148; for more information relating to our planned
capital expenditure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Critical Accounting Estimates</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of our 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Clinical trial expenses of $252,000 have been included in our
financial statements for the year ended June&nbsp;30, 2005, and
no amounts have been accrued at June&nbsp;30, 2005. Clinical
research contracts may vary depending on the clinical trial
design and protocol. Generally the costs, and therefore our
estimates, associated with clinical trial contracts are based on
the number of patients, patient treatment cycles, the type of
treatment and the outcome being measured. The length of time
before actual amounts can be determined will vary depending on
length of the patient cycles and the timing of the invoices by
the clinical trial partners.
</DIV>

<P align="center" style="font-size: 10pt;">29
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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Recent Accounting Announcements</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Share-Based Payments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, the FASB Issued Statement of Financial
Accounting Standards No.&nbsp;123R (Statement&nbsp;123R),
&#147;Share-Based Payments,&#148; the provisions of which become
effective for us in fiscal year 2006. This Statement eliminates
the alternative to use APB&nbsp;No.&nbsp;25&#146;s intrinsic
value method of accounting that was provided in
Statement&nbsp;123 as originally issued. Statement&nbsp;123R
requires companies to recognize the cost of employee services
received in exchange for awards of equity instruments based on
the grant-date fair value of those awards, while the
fair-value-based method prescribed by Statement&nbsp;123R is
similar to the fair-value-based method disclosed under the
provisions of Statement&nbsp;123 in most respects, there are
some differences. Our equity compensation plan provides for the
grant of equity awards to our directors, employees, employees of
our affiliates and certain of our contractors and consultants.
To date no equity awards have been issued under the plan.
Statement&nbsp;123R is effective for us in fiscal year 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Accounting Changes and Error
Corrections</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2005, the FASB issued Statement of Financial Accounting
Standards No.&nbsp;154 (SFAS&nbsp;154), &#147;Accounting Changes
and Error Corrections,&#148; which provides guidance on the
accounting for and reporting of accounting changes and
correction of errors. This statement changes the requirements
for the accounting for and reporting of a change in accounting
principle and applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. This statement
is effective for accounting changes and corrections of errors
made in fiscal years beginning after December&nbsp;15, 2005. We
do not anticipate a material effect upon the adoption of this
statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Market Risk and Risk Management Practices</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We currently rely on Novogen to maintain controls that safeguard
our interests and ensure integrity in the reporting to
stockholders. It is our intention to establish our own controls
for these purposes. We intend to adopt practices to minimize
risks that arise through our activities. These will include
practices that:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

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

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    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.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Impact of Inflation</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Inflation is 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
trials 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.
</DIV>

<P align="center" style="font-size: 10pt;">30

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<DIV align="left" style="font-size: 10pt;">
<A name='110'></A>
</DIV>

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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>BUSINESS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are a clinical stage biopharmaceutical company focused on
discovering and developing a novel class of drugs for human
wound healing and tissue repair. Our proprietary technology is
based on the carbohydrate
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan.
This molecule binds to a specific class of receptors known as
glucan receptors, that are expressed on the critical cells
involved in the innate healing cascade. After binding occurs,
cell signalling triggers the release of a variety of cytokines
and growth factors that initiate the healing process. We believe
our glucan technology can be employed to develop a family of
products that promote and accelerate human wound healing and
tissue repair across a broad range of medical and surgical
applications, including chronic wound care, acute wound care and
tissue inflammation. Our lead product candidate, MG3601, targets
the chronic wound care market, specifically the treatment of
skin ulcers, known as trophic ulcers. We completed a
Phase&nbsp;II clinical trial of MG3601 in March 2005. The
results of that trial demonstrated that MG3601 provided a
statistically significant rate of improved wound closure in
comparison to placebo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A key component of our proprietary technology is an
understanding of the structure-function relationship of the
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan
molecule that our glucan technology utilizes. In particular, we
have developed significant expertise with respect to engineering
optimal forms of the glucan molecular structure to support
commercial development of our product candidates while
maintaining the clinical efficacy of the molecule. We believe
our technology can more fully restore wound healing by
activating the critical cells involved in the healing process.
These critical cells include macrophages, which initiate the
healing cascade, fibroblasts, which initiate the necessary
collagen matrix formation, vascular endothelial cells, which
promote angiogenesis (blood vessel formation), epithelial cells,
which contribute to skin closure, and neutrophils (white blood
cells), which contribute to infection control. To date, we have
developed two active compounds known as Glucoprime and Glucocol.
Glucoprime has been engineered as the active ingredient for
therapeutic indications utilizing topical application. Glucocol
has been engineered for intra-body therapies including the
treatment of tendons, ligaments, joints and bones.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
MG3601, containing Glucoprime as its active ingredient, is an
aseptic topical product for the treatment of trophic ulcers.
Trophic ulcers are skin ulcers associated with venous
insufficiency, arterial insufficiency, diabetes or pressure and
are often deep, large, slow-to-heal wounds that are prone to
serious infection and further complications. These wounds, which
develop due to a patient&#146;s impaired vascular and tissue
repair capabilities, are often difficult, or in the worst cases,
impossible, to treat quickly and successfully with conventional
products. Trophic ulcers often involve physiologic and metabolic
complications such as reduced blood supply, a compromised
lymphatic system or immune deficiencies. Trophic ulcers, due to
their nature, frequently result in sepsis, which can lead to
amputation, and, in some cases, death. Given the high cost and
infection risk of treating trophic ulcer patients in health care
facilities, the ability to accelerate their healing and reduce
infection levels is particularly important.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have completed a Phase&nbsp;II clinical study of MG3601 in
patients with chronic trophic ulcers, specifically deep venous
stasis ulcers of the legs. The trial was conducted in Australia
over a 12-week period and involved 60&nbsp;patients. Patients
were randomized either to a placebo arm or to low-dose (0.1%
Glucoprime) or high-dose (1.0% Glucoprime) arm. The trial was
double-blinded, which means that neither the patient nor the
person administering the treatment knew whether the placebo or a
Glucoprime product was being administered. MG3601 in both
formulations was assessed for its effects on both the rate of
wound closure and the degree of healing. In July 2005, we
released the results of this Phase&nbsp;II clinical trial. Both
active arms achieved a statistically significant rate of
improved wound closure compared to the placebo arm. The rate of
wound closure was 20.4&nbsp;square millimeters per week for the
low-dose arm and 15.4&nbsp;square millimeters per week for the
high-dose arm, compared to a rate of wound closure of
5.4&nbsp;square millimeters per week for the placebo arm.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our second product candidate, JSD114, containing Glucocol as its
active ingredient, is being developed to accelerate healing of
surgical incisions that are at risk of dehiscence, or wound
breakdown. These wounds are typically associated with major
surgery where there is extensive tissue removal or the
occurrence of lymphedema following the removal of lymph nodes.
Closure of these wounds can present major difficulty and may
require extended hospitalization, which makes this an area of
significant unmet medical need in the field of surgical practice.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our immediate priority is to submit an IND to the FDA for MG3601
and to conduct a pivotal Phase&nbsp;III clinical trial in the
United States using MG3601 for the treatment of venous stasis
ulcers. Additionally, we intend to continue pre-clinical
development of JSD114 for the treatment of surgical incisions at
risk of dehiscence and advance JSD114 into human clinical trials.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We also intend to use our glucan technology to develop product
candidates for intra-operative and injection applications in
tendon, ligament and bone surgeries and injuries.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Human Wound Healing and Tissue Repair</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Human wound healing and tissue repair is a highly integrated and
coordinated process, comprising a range of different steps, the
main ones being angiogenesis, which refers to the growth of
blood vessels, fibrogenesis, which refers to the growth of
fibroblasts and the formation of collagen, epithelialization,
which refers to the in-growth of epithelium, and final
remodeling. Effective repair requires an orderly sequence of
these events, with one step meshing with the next step.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The initiation and coordination of this healing cascade are
primarily under the control of macrophages. Macrophages are
scavenger cells that migrate through tissues, detecting and
responding to injured tissue. Their response to injury is to
release a variety of chemical cytokines and growth factors that
initiate the different steps of the healing cascade.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The repair process can be disrupted by a variety of local,
regional and systemic factors, with impairment of any one
component of the healing cascade having the potential to lead to
failure of repair, such as trophic ulcers, chronic repair, such
as tendonitis, or excessive repair, such as keloids. The
ulcerative process is a consequence of impaired circulation,
with the resulting ischaemia and/or tissue edema impeding some
or all of the various components of the healing cascade. A high
proportion of venous stasis ulcers also are septic and we
believe that this serves to impair the healing response further.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While some medical devices and growth factors have been marketed
to treat chronic wounds, we believe that, to date, the current
standard best-practice management of an impaired healing process
has been limited to attempts to improve environmental conditions
surrounding the wound. Treatment of venous stasis ulcers
includes use of compression bandages, hydrocolloid dressings,
regular change of dressings, physiotherapy, hypostatic drainage,
local antibiotic therapy and debridement. We believe that a
significant portion of these ulcers do not completely heal or
recur even with best-practice wound management. We also believe
that low compliance rates with best-practice wound management
stem largely from the slow healing rate of these ulcers, which
typically takes several months to heal under ideal conditions
and the high reliance in most health care systems on
self-management of wounds.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Unless the underlying problem disrupting the healing process is
reversed completely, the cellular process within the wound that
is driving and integrating the repair process will continue to
be dysfunctional. In addition, we believe that because in most
cases it is not possible to achieve complete or even
near-complete restoration of a normal local environment, it is
important to be able to stimulate dormant or tardy cellular
events within the wound.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Solution</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our glucan technology is based on the ability of the
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan
molecule to activate the innate healing cascade by binding to a
specific class of receptors, known as glucan receptors, that are
expressed on the critical cells that are involved in the healing
process. These critical cells, which include macrophages and
other cells such as neutrophils and fibroblasts, when attached
to the wound space and
</DIV>

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<DIV align="left" style="font-size: 10pt;">
activated, produce the range of cytokines and growth factors
vital to the healing process. As a result, we believe the entire
healing cascade is accelerated in a substantial way, but without
disturbance to the normal integration of the different
components of the cascade. In contrast to previous
pharmaceutical strategies based on the addition of individual
growth factors to the wounded tissue, our approach is based on
restoration of the normal cellular events involved in the
healing process, thereby helping to ensure that the full
complement of cytokines and growth factors responsible for
healing is produced.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that the primary clinical benefits from the use of
our MG3601 product candidate to treat trophic ulcers will be:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a higher proportion of ulcers showing complete healing both in
    patients with best-practice wound management and in patients
    with sub-optimal wound management;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    faster times to complete healing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a decreased incidence of wound sepsis;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    a higher compliance rate with best-practice wound management as
    a result of better early wound healing.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We believe that similar clinical benefits will be possible with
our JSD114 product candidate that we are developing for the
treatment of surgical incisions at high risk of dehiscence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Market Opportunity</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The markets for human wound healing and tissue repair products
are large and growing. Business Communications estimates that
the global advanced wound care market totaled $2.0&nbsp;billion
in 2004 and is expected to reach $2.8&nbsp;billion by 2008.
Business Communications further estimates that the chronic wound
care market segment accounts for the largest portion of revenues
in the advanced wound care market with 42% of the market and
estimated revenues of approximately $722&nbsp;million in 2003.
We believe a number of significant market trends will continue
to expand the market including the aging of the general
population, increasing rates of obesity, heightened interest in
advanced dressings, increased pressure by hospitals and
healthcare providers to discharge patients earlier and growth in
the incidence and prevalence of diabetes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have identified three markets that will be targeted for
product development based on our glucan technology.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Chronic Wound Care: Trophic Ulcers.</I> We plan to address
the market for chronic wound care with our lead product
candidate MG3601 for the treatment of trophic ulcers. Trophic
ulcers are skin ulcers that are generally associated with
impaired circulation. These ulcers include venous stasis ulcers,
which occur due to venous insufficiency and typically appear on
the legs of patients, diabetic ulcers, which occur due to
arterial insufficiency and typically appear on the feet of
patients and decubitis ulcers, known as pressure ulcers, which
occur due to pressure ischemia from patients that are bedridden.
Pressure ulcers can appear almost anywhere on the body of the
patient where the patient has been confined to laying or sitting
in one position for extended periods of time. Trophic ulcers, in
particular venous stasis ulcers, are characteristically
difficult and slow to heal, often requiring care over periods
for several months to as long as many years. According to the
National Institutes of Health Clinical Center, each year more
than 4&nbsp;million Americans suffer from chronic non-healing
wounds. In severe cases, amputation is the only surgical
intervention available to treat these ulcers, in particular,
those stemming from arterial insufficiency associated with
diabetes. Trophic ulcers primarily occur in patients that are
past middle age. These ulcers can have a debilitating impact on
patients&#146; lives and represent a significant community
health problem. For example, according to the wound care trade
publication, <I>Advances in Skin&nbsp;&#38; Wound Care,</I> the
estimated per-episode cost of care for venous stasis ulcers can
exceed $40,000. To further illustrate the importance of this
market, the CDC estimates that approximately 85% of lower
extremity amputations in diabetic patients in the United States
are preceded by a foot ulcer.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Trophic ulceration is essentially a disease of neglect. With
best-practice wound care that focuses on keeping the wound clean
(debridement)&nbsp;and free of infection, and working to improve
circulation, it can
</DIV>

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<DIV align="left" style="font-size: 10pt;">
be possible to achieve total or substantial healing. However, we
believe it is general clinical experience that the intensive and
expensive natures of such wound management, along with the
typical slow response rate, combine to produce poor patient
compliance, resulting typically in chronic, debilitating
ulceration. Also, the difficulty in correcting the underlying
circulatory dysfunction can impede the healing process or lead
to repeat wound breakdown.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Acute Wound Care: Surgical Incisions.</I> The second market
we are targeting to apply our glucan technology is the promotion
of repair of surgical incisions, in particular surgical
incisions at high risk of dehiscence, or wound breakdown.
Dehiscence of surgical wounds typically is associated with
extensive wounds such as wide excisions following tumor removal.
Surgical trauma, poor lymphatic drainage, and tensile pressure
often contribute to the extended healing times of such wounds.
We believe there is a need for a therapy that increases the
speed of healing in such wounds because of the potential
benefits of reduced hospitalization times and rates of wound
infection.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We plan to address the market for acute wound care with our
JSD114 product candidate for the treatment of large surgical
incisions that are at risk of dehiscience. According to the CDC,
the incidence of wounds attributable to surgical procedures
resulting in open wounds in the United States was approximately
7.7&nbsp;million in 2002.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Tissue Inflammation: Tissue Repair.</I> The third targeted
market is the general group of medical situations where the
tissue repair process typically is slow as a matter of course,
and where promotion of the repair process could be expected to
lead to earlier and improved rates of healing. Healing in
response to injuries or surgical repairs of tendons, ligaments,
joints, bones and the implantation of orthopedic devices are the
primary examples of this market.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to address this market by developing additional
product candidates based on the active ingredient, Glucocol.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Glucan Technology</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our technology platform is based on the carbohydrate
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan
and its ability to activate the innate healing cascade by
binding to glucan receptors that are expressed on the critical
cells involved in the healing process. Glucans are polymers of
glucose. There are many thousands of different forms within the
broad glucan family, with one of those family members,
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan,
providing the cell wall structure of fungal and yeast cells.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The technology that now forms the basis of our product
development program commenced in 1989 as a research project at
the Department of Surgery, The University of Sydney, under the
direction of Professor Graham Kelly, a member of our board of
directors and an executive officer of Novogen. That university
project was an investigation into the feasibility of stimulating
healing within the surgical wounds of organ transplant
recipients where normal tissue healing is impaired by the use of
immunosuppressive therapy through antagonism of local, or
intra-wound, immune suppression without compromising systemic
immune suppression.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A review of the scientific literature indicated that glucan has
the ability to accelerate wound healing. Professor Kelly&#146;s
research team was able to confirm this effect in animals using
micro-particulate glucan prepared by a method described in the
scientific literature by Professor David Williams of Tulane
University. It was shown that this effect could be achieved
without acceleration of the tissue rejection process.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At that time, a number of solubilized forms of glucan were being
tested clinically by other groups. The rationale behind the
development of these soluble forms was in part an attempt to
reduce the substantial heterogeneity (in terms of molecular
weight) of micro-particulate glucan, and in part to produce a
solubilized product that could be administered intravenously.
One of these product candidates was a glucan sulfate, which was
the subject of a patent granted to Professor Williams of Tulane
University, and another was a glucan phosphate, which was the
subject of a patent granted to Alpha Beta Technologies, Inc.,
which has since been renamed RegeneRx Biopharmaceuticals, Inc.,
a U.S. biotechnology company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Both of these product candidates were incorporated into
Professor Kelly&#146;s research project and compared to
micro-particulate glucan. Micro-particulate glucan was found to
be superior to both soluble forms of glucan in terms of
promotion of wound healing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The university studies relating to glucan commenced in 1989, at
which time Novogen&#146;s predecessor, which was at that time a
private company, assumed responsibility for continuing with the
project. Subsequent structure-function studies were conducted by
Novogen&#146;s predecessor, showing that while a large molecular
weight certainly was important, the prime determinant of
efficacy was the degree of (1<FONT face="symbol">&#174;</FONT>6)
side-branching. Glucan is comprised of a linear backbone of
glucose units with (1<FONT face="symbol">&#174;</FONT>3)
linkages and side-branches of
(1<FONT face="symbol">&#174;</FONT>6) linkages. Our studies
indicate that while the glucan receptor is able to be activated
by (1<FONT face="symbol">&#174;</FONT>3) glucan, the presence of
a high degree of side-branching appears to augment considerably
the stimulatory effect. Solubilization of glucan is associated
with loss of these side-branches, rendering the glucan much less
effective in terms of promotion of wound healing. Further
studies went on to identify the optimal
(1<FONT face="symbol">&#174;</FONT>6):(1<FONT face="symbol">&#174;</FONT>3)
ratio range.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The next step in Novogen&#146;s predecessor&#146;s research of
glucan was to determine whether the identified optimal form of
glucan was able to promote healing in wounds where the healing
process was delayed. While glucan was recognized as being able
to promote healing in wounds with normal healing capacity, its
ability to promote a dysfunctional healing process was unknown.
Pre-clinical animal studies showed that micro-particulate glucan
was able to restore healing rates to normal in wounds which had
been treated with immunosuppressive drug therapy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen&#146;s research embraced structure-function studies on
different glucans, methods of formulation, the establishment of
quality assurance/quality control procedures, and the
construction of a pilot glucan manufacturing plant for glucan
product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Our Product Candidates</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have developed two active ingredients:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><U>Glucoprime</U> </B>is a high molecular weight,
micro-particulate glucan with a high degree of side branching.
This compound is intended for trophic ulcer repair. Glucoprime
is the active ingredient in our lead product candidate, MG3601,
for the treatment of venous stasis ulcers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B><U>Glucocol</U> </B>is a low molecular weight, colloidal
glucan with a lower degree of side-branching consistent with its
higher solubility. This compound is intended to be used to
accelerate healing of surgical incisions that are at risk of
dehiscence, or wound breakdown. Glucocol is the active
ingredient in our second product candidate, JSD114.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A Phase&nbsp;I safety and efficacy study of a high molecular
weight glucan (Glucoprime) was conducted in 1997 in a
randomized, double-blind, placebo-controlled trial in patients
with chronic venous stasis ulcers that had become refractory to
standard wound management therapies. The high molecular weight
glucan was compared to another form of glucan that had a lower
molecular weight and a lower proportion of side-branching. The
two forms of glucan were suspended in a cream base and preserved
with paraben. Patients were randomly assigned to the three
treatment groups with six patients per group. Treatment was three
</DIV>

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<DIV align="left" style="font-size: 10pt;">
times weekly for four weeks. Efficacy was assessed by
planimetry, measuring the reduction in the surface area of the
wound.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The degree of healing over eight weeks was as follows:
</DIV>

<CENTER>
<TABLE width="95%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Percent Reduction in</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Group</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Wound Surface Area</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1 (placebo)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4.4</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2 (high molecular weight glucan)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>36.7</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    3 (low molecular weight glucan)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(28.9</TD>
    <TD align="left" valign="bottom" nowrap>)%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
No intolerances or toxicities were observed or reported in
association with the use of the high molecular weight glucan,
low molecular weight glucan or the placebo.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We concluded from this study that:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the high molecular weight glucan with a high
    (1<FONT face="symbol">&#174;</FONT>6):(1<FONT face="symbol">&#174;</FONT>3)
    linkage ratio was effective and that a similar micro-particulate
    glucan with a lower
    (1<FONT face="symbol">&#174;</FONT>6):(1<FONT face="symbol">&#174;</FONT>3)
    ratio was not effective, confirming our pre-clinical
    experience;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the high molecular weight glucan was more effective than a
    placebo product.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></TD>
    <TD>
    <B><I>MG3601</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
With this Phase&nbsp;I study confirming the ability of the high
molecular weight glucan to stimulate healing within chronic
trophic ulcers, we commenced a Phase&nbsp;II study with the aim
of identifying an appropriate formulation that would form the
basis of a pivotal trial for marketing approval.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A change in formulation for purposes of conducting the
Phase&nbsp;II study was driven by a strategic decision to avoid
preservatives such as paraben, which was used in the
Phase&nbsp;I clinical study, which had the potential to inhibit
macrophages. As a result of formulation studies that were
conducted, we decided to use a gel base preserved with 12%
methanol, which we refer to as MG3601. The second formulation
issue was to determine the appropriate dose of active Glucoprime
in MG3601, and whether there would be a dose-response effect. We
decided to test preparations containing 0.1% and 1.0% active
Glucoprime.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sixty patients with chronic venous stasis ulcers that had become
refractory to standard wound management therapies were
randomized to three treatment arms:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    placebo (our MG3601 product candidate base without Glucoprime);</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Our MG3601 product candidate containing 0.1% Glucoprime;&nbsp;and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Our MG3601 product candidate containing 1.0% Glucoprime.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As part of the study, ulcers were cleaned, debrided, the test
product applied, and the wounds dressed with pressure bandages
three times weekly for up to 12&nbsp;weeks. The wound edges were
traced weekly, and both the rate of healing and the degree of
healing determined.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The data from this study was released in July 2005. No
toxicities or adverse events were reported in this study. The
data showed that our MG3601 product promoted the rate at which
wounds healed, with MG3601-treated ulcers healing at a
statistically significant rate of improvement compared to
placebo-treated ulcers. The rate of wound closure was as follows:
</DIV>

<CENTER>
<TABLE width="95%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="52%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Observed Significance</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Group</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Rate of Wound Closure</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Level (P Value)</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1 (placebo)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5.4 mm<SUP style="font-size: 85%; vertical-align: text-top">2</SUP>/week</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2 (MG3601&nbsp;&#151; 0.1% Glucoprime)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>20.4 mm<SUP style="font-size: 85%; vertical-align: text-top">2</SUP>/week</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>.01</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    3 (MG3601&nbsp;&#151; 1.0% Glucoprime)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>15.4 mm<SUP style="font-size: 85%; vertical-align: text-top">2</SUP>/week</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>.04</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">36
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The overall mean level of healing over the 12&nbsp;weeks,
measured by the reduction in the surface area of the ulcer, was
as follows:
</DIV>

<CENTER>
<TABLE width="95%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="72%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="11%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Percent Reduction in</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Group</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Wound Surface Area</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    1 (placebo)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    2 (MG3601&nbsp;&#151; 0.1% Glucoprime)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    3 (MG3601&nbsp;&#151; 1.0% Glucoprime)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>55</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These results were observed even though there was a large
discrepancy in the size of the ulcers, with the two MG3601
treatment groups having substantially larger average ulcer size
than the placebo group, despite the patients being randomized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Specific Objectives/Strategy</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our business plan is to continue to develop new product
candidates based on our proprietary glucan technology
specifically engineered for therapeutic applications in large
areas of unmet medical need. Our current objectives are to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    submit an IND to the FDA for MG3601 so that human clinical
    testing can commence in the United States; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    commence a Phase III pivotal clinical trial in the United States
    using MG3601 for the treatment of venous stasis ulcers.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our other objectives over the next two years are to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    construct a pilot-scale manufacturing plant and laboratory
    facility for production of glucan product candidates to be used
    in clinical trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    establish manufacturing facilities for the supply of commercial
    quantities of our product candidates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    continue pre-clinical development of JSD114 for the treatment of
    surgical incisions at risk of dehiscence;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtain an IND for JSD114 and commence a clinical trial program
    in the appropriate patient group; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    use our glucan technology to develop product candidates for
    intra-operative and injection applications in tendon, ligament
    and bone surgeries and injuries.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We anticipate that with the net proceeds of this offering we
will have sufficient funds for these activities. We cannot
assure you, however, that we will achieve these objectives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our long-term commercial objective is to seek to develop
relationships with strategic partners for the development,
marketing and distribution of products for which marketing
approval is obtained.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Competition</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The clinical development and commercialization of new wound
healing treatments is highly competitive. As a development stage
biopharmaceutical company, we compete with pharmaceutical and
biotechnology companies, academic and scientific institutions,
governmental agencies and public and private research
organizations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Many pharmaceutical and biotechnology companies have products,
therapies or drug candidates in various stages of pre-clinical
or clinical development which focus on human wound healing and
tissue repair. Some of these potentially competitive products,
therapies and drugs are further advanced in development and may
receive FDA or other regulatory approval and may be
commercialized earlier than MG3601 or JSD114. Some of these
products, therapies and drugs may be directly competitive with
MG3601 and JSD114 to the extent that they would obviate the need
for our product candidates. In other
</DIV>

<P align="center" style="font-size: 10pt;">37
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
cases, however, these products, therapies or drugs may not be
competitive to the extent that they are not mutually exclusive
and could be used in conjunction with our product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Competitive products include devices, such as methods of
increasing blood flow and oxygen tension, drugs, and biologics,
such as growth factors. We have not conducted comparative tests
to evaluate the relative efficacy and safety of these methods
versus our product candidates. The most direct competition for
our glucan-based products are biologics such as growth factors
(platelet-derived growth factor, or PDGF, fibroblast-derived
growth factor, angiogenic growth factors), which have the
objective of stimulating particular components of the wound
healing cascade, in the same way that our glucan product
candidates are intended to work. However, we believe the
essential difference between such competitive products and our
glucan technology remains that these competitive biologicals are
limited in the scope of their action, and we are unaware of any
competitive product either commercialized or under development
that has the broad stimulatory effect on all key aspects of the
wound process that our glucan technology is able to provide.
While we believe, based on current clinical practice, that a
substantial need remains in medical and surgical practices for
products that have the ability to promote tissue repair in an
effective and safe manner, we are unable to assess the potential
of competitive products that we are aware of being developed to
meet this need to be either ahead of or better than our
glucan-based product candidates. Also, we have not conducted
comparative tests to evaluate the relative efficacy and safety
of any competitive products.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our competitors may develop and commercialize products,
therapies or drugs that are safer, less costly and more
efficacious in the treatment of chronic venous stasis ulcers and
other wounds. In addition, we and Novogen, our services
provider, 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. Johnson &#38;
Johnson, which is one of the companies involved in developing
growth factors, such as recombinant human PDGF (rhPDGF-BB), and
in marketing Regranex, and Kinetic Concepts, which has been
marketing a Vacuum Assisted Closure system, are two such
companies with potentially competitive wound healing therapies.
In this respect, Johnson &#38; Johnson, Kinetic Concepts and
others may be able to more easily develop technologies and
products that would render our technologies or products obsolete
or non-competitive.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Intellectual Property</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen has been granted patents and has additional patents
pending in a number of countries which relate to a family of
chemically related compounds and their use in human therapeutic
treatment. We have licensed from Novogen the rights to the
Novogen patents and applications as they relate to glucan in
human therapeutic treatment. Novogen has granted to us an
exclusive, worldwide, non-transferable license to use and
exploit the glucan technology, which includes glucan patent
rights, know-how and any developments in relation to the patent
rights and know-how, solely in the fields of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prevention and treatment of ultraviolet light induced skin
    damage in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    joint repair, particularly with artificial joints in humans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of poorly healing surgically dissected or transected
    tissue in humans.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
See &#147;Certain Relationships and Related Transactions&#148;
for more information regarding our agreements with Novogen.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The exclusive, worldwide, non-transferable license granted to us
also includes processes for the production of
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan.
The Novogen patents and applications which we have licensed are
as follows:
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Granted Patents</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    European Patent No.&nbsp;0815144, covering Austria, France,
    Germany, Italy, The Netherlands, Spain, Sweden, Switzerland and
    the United Kingdom;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    United States Patent No.&nbsp;6,242,594;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    United Kingdom Patent No.&nbsp;2314850;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    United Kingdom Patent No.&nbsp;2331014; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Australian Patent No.&nbsp;716181.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Pending Applications</I></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    United States Patent Application No.&nbsp;10/421,659;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Canadian Application No.&nbsp;2214899; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Japanese Application No.&nbsp;08-527114.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These patents and patent applications derive from International
Patent Application No.&nbsp;PCT/ AU96/00138 (published under
No.&nbsp;WO96/28476, and claiming priority from Australian
Patent Application PN1661 filed 13 March 1995). The patents will
be in force until March&nbsp;13, 2016 on the basis of a 20-year
patent term.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have also licensed from Novogen the trade marks GLUCOPRIME
and GLUCOCOL which respectively relate to pharmaceutical
preparations containing glucan and wound healing agents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As patent applications in the United States are sometimes
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 the Novogen patents and applications as they relate
to glucan technology for the uses referred to above. Moreover,
pursuant to the terms of the Uruguay Round Agreements Act,
patents filed on or after June&nbsp;8, 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
glucan product candidates 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
submission of an IND and the filing of the corresponding New
Drug Application (NDA)&nbsp;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.
</DIV>

<P align="center" style="font-size: 10pt;">39
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In order to protect the confidentiality of our glucan
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. Under the technology
license agreement we are required to assign these developments
to Novogen and these developments are then automatically
licensed back to 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The pharmaceutical industry is highly competitive and patents
have been applied for by, and issued to, other parties relating
to products competitive with ours. Therefore, MG3601, JSD114 and
other product candidates we develop using our glucan technology
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Relationship with Novogen</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen has been granted patents and has additional patent
applications pending in a number of countries pertaining to its
glucan technology and its use in human wound healing and tissue
repair. 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;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the technology license agreement, Novogen granted us an
exclusive, worldwide, non-transferable license to use and
exploit the glucan technology, which includes glucan patent
rights, know-how and any developments in relation to the patent
rights and know-how, solely in the fields of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prevention and treatment of ultraviolet light induced skin
    damage in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    joint repair, particularly with artificial joints in humans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of poorly healing surgically dissected or transected
    tissue in humans.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the manufacturing license and supply agreement, Novogen
assumes responsibility for the supply of glucan in its primary
manufactured form for both the research and development program
and the ultimate commercial use of product candidates we develop
using our glucan technology. Novogen has a pilot manufacturing
plant which we believe has sufficient capacity to meet the
projected amount of glucan required to complete the proposed
clinical program. We intend to use a portion of the net proceeds
of this offering on laboratory equipment and a pilot-scale
manufacturing plant in order to produce clinical trial
quantities of our glucan product candidates. Once we are able to
do so, we intend to exercise our right under the manufacturing
license and supply agreement to terminate that agreement by
paying Novogen a termination fee of $250,000. In the event we
elect to terminate the manufacturing license and supply
</DIV>

<P align="center" style="font-size: 10pt;">40

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<DIV align="left" style="font-size: 10pt;">
agreement, the royalty we pay to Novogen under the technology
license agreement will increase from 2% to 4%. See &#147;Certain
Relationships and Related Transactions&nbsp;&#151; The Amended
and Restated Technology License Agreement&nbsp;&#151; Fees,
Charges and Costs&#148; for more information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the agency agreement, Novogen acts as our agent to
negotiate and enter into agreements for the conduct of clinical
trials for the glucan product candidates so Novogen can arrange
and negotiate clinical trial agreements in our stead and perform
the obligations on our behalf. We do not expect to incur
significant fees under this agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to the services agreement, Novogen provides services
reasonably required by us relating to the development and
commercialization of glucan product candidates.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Commercialization</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 indications for which the clinical data supports
efficacy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may choose to seek marketing 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 MG3601 or other glucan product candidates we develop in
certain territories, in which case that partner may take
responsibility for application for marketing approval.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 MG3601 or other product
candidates we develop using our glucan technology are to be
marketed. Our decision to establish a strategic partnership will
depend on the success of MG3601 or other product candidates we
develop using our glucan technology during the clinical program
and whether we can negotiate favorable terms with potential
partners.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Decisions on both the appropriate territories in which marketing
approval will be sought and the nature of commercialization in
those territories will be made by our board of directors at the
appropriate time and with due regard to maximizing the
commercial benefit to us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The most significant market for our glucan product candidates 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 drug to have an effective IND.
See &#147;&nbsp;&#151; Regulation&nbsp;&#151; U.S. Regulatory
Approval.&#148; MG3601 has not achieved this status and
therefore we have not commenced human clinical trials in the
United States.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Research and Development</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The objective of our research and development program is the
generation of data sufficient to achieve marketing approval of
our glucan product candidates in major markets such as the
United States, and/or to allow us to enter into a commercial
relationship with another party.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The key aspects of this program are to:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    develop new forms of glucan compounds which are active in the
    healing cascade;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    formulate new product candidates using active glucan compounds;
    and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    identify the therapeutic applications of new product candidates.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">41

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Regulation</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>U.S. Regulatory Approval</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    preclinical laboratory and animal tests performed under the
    FDA&#146;s Good Laboratory Practices regulations to assess
    potential safety and effectiveness;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    submission and approval of an IND which must become effective
    before clinical trials may begin in the United States;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    obtaining approval of Institutional Review Boards to protect the
    welfare and rights of human subjects in clinical trials;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    adequate and well-controlled human clinical trials to establish
    the safety and efficacy of the product in the product&#146;s
    intended use;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    development of manufacturing processes which conform to
    FDA-mandated current Good Manufacturing Practices, or cGMPs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    laboratory evaluation of the product&#146;s formulation and
    stability; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    FDA review and approval of either a Biologics License
    Application, or BLA, or a New Drug Application, or NDA, prior to
    any commercial sale or shipment of a product.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
medical 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.
Preclinical 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Human clinical trials are typically conducted in three
sequential phases that may overlap:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Phase I:</I> The drug or biologic 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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Phase II:</I> The drug or biologic is studied in controlled,
    exploratory therapeutic trials in a limited number of subjects
    with the disease or medical condition for which the new drug or
    biologic is intended to be used in order to identify possible
    adverse effects and safety risks, to determine the</TD>
</TR>

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    <TD width="3%"></TD>
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    <TD width="96%"></TD>
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    <TD>&nbsp;</TD>
    <TD></TD>
    <TD align="left">
    preliminary or potential efficacy of the product for specific
    targeted diseases or medical conditions, and to determine dosage
    tolerance and the optimal effective dose.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    <I>Phase III:</I> When Phase II studies demonstrate that a
    specific dosage range of the drug or biologic is likely to be
    effective and the drug or biologic 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.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We cannot be certain that we will successfully complete Phase I,
Phase II, or Phase III testing of our product candidates 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Results of preclinical studies and clinical 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 a BLA or 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. BLAs are used for products that
are regulated as biologics, and NDAs are used for products that
are regulated as drugs. Before approving a BLA or 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 BLA or 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 a BLA or NDA
is approved, the FDA may impose additional obligations or
restrictions (such as labeling changes), or even suspend or
withdraw 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 BLA
or 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
restriction on indicated uses could have a material adverse
impact on our business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each BLA or 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, 2004 for the fiscal year
2005, the user fee for an application requiring clinical data,
such as a BLA or NDA, is $672,000. The FDA adjusts the PDUFA
user fees on an annual basis. PDUFA also imposes an annual
product fee for prescription drugs and biologics ($41,710), and
an annual establishment fee ($262,200) on facilities used to
manufacture prescription drugs and biologics. We are not at the
stage of development with our product candidates 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 FDA.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 preclinical or early stage
clinical trials does not assure success in later stage clinical
trials. Data obtained from preclinical and clinical activities
are not always conclusive and may be susceptible to varying
interpretations that could delay, limit, or prevent 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The FDCA includes provisions designed to facilitate and expedite
the development and review of drugs and biological products
intended for treatment of serious or life-threatening conditions
that demonstrate the potential to address unmet medical needs
for such conditions. These provisions set forth a procedure for
designation of a drug as a &#147;fast track product.&#148; The
fast track designation applies to the
</DIV>

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<DIV align="left" style="font-size: 10pt;">
combination of the product candidate and specific indication for
which it is being studied. A product candidate designated as
fast track is ordinarily eligible for additional programs for
expediting development and review, but product candidates that
are not fast track drug development programs may also be able to
take advantage of these programs. These programs include
priority review of BLAs and NDAs, and accelerated approval. Drug
approval under the accelerated approval regulations may be based
on evidence of clinical effect on a surrogate endpoint that is
reasonably likely to predict clinical benefit. A postmarketing
clinical study will be required to verify clinical benefit, and
other restrictions to assure safe use may be imposed. We cannot
provide you with any assurance as to whether our product
candidates will qualify for fast track status.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 manufacturing processes or facilities,
product labeling, or other areas require FDA review and
approval. Failure to comply with FDA regulatory requirements may
result in enforcement action by the FDA, including 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
FDA&#146;s policies may change, and additional government
regulations may be enacted that could delay, limit, or prevent
marketing approval of our product candidates 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 product candidates could diminish any
revenues we may be able to generate. Our ability to
commercialize future product candidates will depend in part on
the extent to which coverage and reimbursement for the product
candidates 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The labeling, advertising, promotion, marketing and distribution
of a drug or biologic product also must be in compliance with
FDA requirements, which include, among others, standards and
regulations for direct-to-consumer advertising, off-label
promotion, industry sponsored scientific and educational
activities, and promotional activities involving the internet.
The FDA has very broad enforcement authority, and failure to
abide by these regulations can result in penalties, including
the issuance of a Warning Letter directing the company to
correct deviations from regulatory standards and enforcement
actions that can include seizures, injunctions and criminal
prosecution.
</DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>European Union Regulatory Requirements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 Agency (EMEA)&nbsp;leads 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 product candidates 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 member 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 Medicinal Products for Human Use (CHMP)&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 CHMP, 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
New European Legislation was introduced in 2001 designed to
harmonize the regulation of clinical trials across the EU. This
legislation has now been implemented in all EU countries. In
addition, the entire EU regulatory regime has recently undergone
a significant revision and new laws have been introduced that
amend the current EU Medicines Directive. These amendments are
due to come into effect by October&nbsp;30, 2005 and are
currently being implemented on a country by country basis.
Accordingly, there is a marked degree of change and uncertainty
both in the regulation of clinical trials and in respect of
marketing authorizations which face us in seeking approval for
our products in Europe.
</DIV>

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    <TD width="3%"></TD>
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    <TD></TD>
    <TD>
    <B><I>Australian Regulatory Requirements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, manufactured in or exported from Australia be
included in the Australian Register of Therapeutic Goods, or
ARTG, unless specifically exempted under the Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 (usually based on the European
Union requirements) to support the quality, safety and efficacy
of the drug and payment of a fee. Application details are
available on the TGA website http://www.tga.gov.au.
</DIV>

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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 guidelines. The TGA must decide within
40 working days whether it will accept the application for
evaluation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Once an application is accepted for evaluation, aspects of the
data provided are allocated to evaluators, who prepare
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. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 independent 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 five working days after the ADEC meeting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Employees</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not have any employees. Novogen provides us with staff and
other financial and administrative services under our services
agreement with Novogen. We intend to employ our own general
manager and administrative and other staff sufficient to
implement our research and development program, manufacture our
glucan product candidates and to perform our financial and
administrative functions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Facilities</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We do not own or lease any facility. Novogen provides us with
space for our corporate headquarters. We intend to use a portion
of the net proceeds of this offering to lease office, laboratory
and manufacturing facilities in the United States.
</DIV>

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<B>Legal Proceedings</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are not currently a party to any legal proceedings.
</DIV>

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<A name='111'></A>
</DIV>

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<B>MANAGEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Directors and Executive Officers</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following sets forth information for each of our directors
and executive officers.
</DIV>

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    <TD></TD>
    <TD>
    <B><I>Christopher Naughton, age 52, Chairman and Director</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Naughton has been one of our directors since 1999 and
our Chairman since September 2005. Mr.&nbsp;Naughton previously
served as our President from May 1999 to September 2005.
Mr.&nbsp;Naughton has been a director and president and chief
executive officer of Marshall Edwards, Inc., a public company
that is owned 86% by Novogen, since 2000. He also has been the
managing director of Novogen since March 1997. Mr.&nbsp;Naughton
received degrees in Economics from the Australian National
University and in Law from the University of New South Wales. He
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 past 20&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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Professor Graham E. Kelly BSc(Vet), BVSc, PhD, age 60,
    President, CEO and, Director</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Professor Kelly was appointed as our President and CEO in
September 2005. Professor Kelly previously served as our
Chairman from May 1999 to September 2005. Professor Kelly has
been Chairman of Marshall Edwards since 2000. Professor Kelly is
the founder and the first managing director of Novogen Limited.
Professor Kelly was chairman of the Novogen Group from March
1997 until December&nbsp;31, 2000. Professor Kelly was an
executive director of Novogen from 1994 to September 2005 and is
currently the Phenoxodiol Research Director of Novogen, a
position he has held since 2000. He has spent nearly
30&nbsp;years in medical research involving drug development,
immunology, surgery and cancer. Professor Kelly was Senior
Research Fellow in Experimental Surgery in the Faculty of
Medicine at the University of Sydney and was appointed an
Adjunct Professor of the University in May 2004. He developed
the
(1<FONT face="symbol">&#174;</FONT>3)(1<FONT face="symbol">&#174;</FONT>6)-<FONT face="symbol">&#98;</FONT>-glucan
and isoflavone intellectual property now owned by the Novogen
Group. Professor Kelly&#146;s term as one of our directors
expires in 2005.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Philip A. Johnston, age 58, Director</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Johnston has been one of our directors since September
2005. Mr.&nbsp;Johnston has more than 25&nbsp;years of
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.&nbsp;Johnston spent
nine years as an executive director of Wellcome Australia
Limited from June 1988 to September 1997. He is a director of
Marshall Edwards. 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 New
South Wales and the London Business School. Mr.&nbsp;Johnston is
also a director of Lipa Pharmaceuticals Limited.
Mr.&nbsp;Johnston&#146;s term as one of our directors expires in
2007.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>David R. Seaton, age 50, Chief Financial Officer,
    Secretary and Director</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Mr.&nbsp;Seaton has been our Chief Financial Officer, Secretary
and one of our directors since September 2005. Mr.&nbsp;Seaton
has been the chief financial officer of Novogen since September
1999 and has been the chief financial officer and secretary of
Marshall Edwards 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, Duke University
and at the London Business School. He has 20&nbsp;years of
experience in the pharmaceutical industry. Prior to
</DIV>

<P align="center" style="font-size: 10pt;">47
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<DIV align="left" style="font-size: 10pt;">
joining Novogen in 1999. Mr.&nbsp;Seaton was the finance
director of GlaxoWellcome Australia Limited from 1995 to 1999.
Mr.&nbsp;Seaton&#146;s term as one of our directors expires in
2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Corporate Governance</B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Board of Directors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our board of directors has responsibility for our overall
corporate governance and meets regularly throughout the year.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Two of our four 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Audit Committee</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Audit Committee is responsible for overseeing our financial
and accounting activities, including external audits and
accounting functions. The Audit Committee meets at least four
times each year. The Audit 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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(chairman), &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
all of whom are independent as defined by applicable Nasdaq and
SEC
rules. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;is
an audit committee financial expert as defined by SEC rules.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Remuneration Committee</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Chairman), &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Director and Executive Compensation</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Directors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our directors receive directors fees of
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
annum from us.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Executive Officers</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our executive officers, Christopher Naughton, Graham Kelly and
David Seaton, are also executive officers of Novogen and to date
have not received 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Equity Compensation Plan</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Prior to the completion of this offering we will adopt an equity
compensation plan, which we refer to as the Plan, and submit the
equity compensation plan to our stockholders for approval. The
Plan generally is to be administered by the remuneration
committee of our board of directors, except that the full board
may act at any time to administer the plan, and authority to
administer any aspect of the Plan may be delegated to an
executive officer or any other person. The Plan allows the plan
administrator to grant awards of shares of our common stock or
the right to receive or purchase shares of our common stock
</DIV>

<P align="center" style="font-size: 10pt;">48

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
(including options to purchase common stock, restricted stock
and stock units, bonus stock, performance stock, and stock
appreciation rights) to our employees, directors, individuals
who are employees of any entity controlled by, or in control of,
us or other persons or entities providing significant services
to us or any entity controlled by, or in control of, us and
further provides the plan administrator the authority to reprice
outstanding stock options or other awards. The actual terms of
an award, including the number of shares of common stock
relating to the award, any exercise or purchase price, any
vesting, forfeiture or transfer restrictions, the time or times
of exercisability for, or delivery of, shares of common stock,
are to be determined by the plan administrator and set forth in
a written award agreement with the participant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The aggregate number of shares of our common stock for which
awards may be granted under the Plan cannot
exceed &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the number of shares of our common stock issued and
outstanding at the time any award is granted. Awards made under
the Plan that have been forfeited (including our repurchase of
shares of common stock subject to an award for the price, if
any, paid to us for such shares of common stock, or for their
par value), cancelled or have expired, will not be treated as
having been granted for purposes of the preceding sentence.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Plan permits the plan administrator to make an equitable
adjustment to the number, kind and exercise price per share of
awards in the event of our recapitalization, reorganization,
merger, spin-off, share exchange, dividend of common stock,
liquidation, dissolution or other similar transaction or events.
In addition, the plan administrator may make adjustments in the
terms and conditions of any awards in recognition of any unusual
or nonrecurring events. Our board of directors may, at any time,
alter, amend, suspend or discontinue the Plan. The Plan will
automatically terminate ten years after it has been approved by
our stockholders.
</DIV>

<P align="center" style="font-size: 10pt;">49
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='112'></A>
</DIV>

<!-- link1 "BENEFICIAL OWNERSHIP OF COMMON STOCK" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>BENEFICIAL OWNERSHIP OF COMMON STOCK</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
None of our directors or executive officers owns any shares of
our capital stock. The following table sets forth information
known to us with respect to the beneficial ownership of our
common stock by each stockholder known by us to own beneficially
more than five percent of our common stock as of August&nbsp;31,
2005, and as adjusted to reflect the sale of common stock
offered hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Beneficial ownership is determined in accordance with the rules
of the Securities and Exchange Commission. In computing the
number of shares beneficially owned by a person and the
percentage ownership of that person, shares of common stock
subject to options or warrants held by that person that are
currently exercisable or exercisable within 60&nbsp;days of
August&nbsp;31, 2005 are deemed outstanding, but are not deemed
outstanding for computing the percentage ownership of any other
person. To our knowledge, except as set forth in the footnotes
to this table, each person named in the table has sole voting
and investment power with respect to the shares set forth
opposite such person&#146;s name.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="37%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="8%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Percentage of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Number Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Shares Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Percentage of Shares</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="left" nowrap><B>Name and Address of</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Owned Before and</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Owned Before this</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Beneficially Owned</B></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>After this Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>Offering</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap><B>After this Offering</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    Novogen Limited</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,005,000</TD>
    <TD align="left" valign="bottom" nowrap>(1)</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>84.3</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    140 Wicks Road</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    North Ryde 2113</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

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

<TR>
    <TD colspan="13">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    El Coronado Holdings, LLC</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>10.0</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD align="left" valign="bottom" nowrap>%</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    12626 E. Turkey Creek Road</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Pearce, Arizona 85625</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 30%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>(1)&nbsp;</TD>
    <TD align="left">
    Includes 2,000,000 shares held by Novogen, Inc., a wholly-owned
    subsidiary of Novogen Limited.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">50
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<DIV align="left" style="font-size: 10pt;">
<A name='113'></A>
</DIV>

<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our agreements with Novogen 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The Amended and Restated Technology License Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen Research Pty Limited has granted us an exclusive,
worldwide, non-transferable license to use and exploit the
glucan technology, which includes glucan patent rights, know-how
and any developments in relation to the patent rights and
know-how, solely in the fields of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prevention and treatment of ultraviolet light induced skin
    damage in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    joint repair, particularly with artificial joints in humans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of poorly healing surgically dissected or transected
    tissue in humans.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The license is exclusive until the expiration or lapsing of the
last relevant Novogen patents or patent applications in the
world, which we expect will be no earlier than March&nbsp;13,
2016. The license grants us the right to: (i)&nbsp;make, use,
reproduce, market, distribute, sell, hire or otherwise dispose
of the licensed glucan product candidates and inventions,
(ii)&nbsp;modify, enhance, create derivative works based on and
further develop the glucan patents, (iii)&nbsp;keep, use,
reproduce and make adaptations of the glucan material provided
to us by Novogen and (iv)&nbsp;use any methods or processes
forming part of the glucan technology to do any of the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each party must immediately disclose to the other party
developments, improvements, enhancements or new know-how which
are made or acquired by either party in relation to the glucan
product candidates. Under the agreement, we assign to Novogen
our entire right, title and interest in all intellectual
property rights associated with any developments and further
know-how relating to the glucan technology. These developments
are automatically licensed back to us under the technology
license agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may not sub-license without the prior written consent of
Novogen. In addition, any proposed sub-contractors and agents
must first agree in writing to comply with certain
confidentiality obligations and to assign to us all intellectual
property rights in the fields specified in the technology
license agreement created or acquired by them in the course of
their engagement. Under the technology license agreement we are
required to assign these developments to Novogen and these
developments are then automatically licensed back to us.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Marketing and Exploitation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may use, market and exploit the glucan product candidates in
the fields specified in the technology license agreement. We are
required to use diligent efforts to identify major markets for
commercial exploitation of the licensed product candidates,
further develop the licensed product candidates towards
commercialization, pursue opportunities in major markets,
promote, market and exploit the licensed product candidates in
major markets and otherwise maximize commercialization income.
Under the technology license agreement, diligent efforts means
the level of efforts required to carry out the obligations in a
sustained manner consistent with the efforts a reasonable person
in the same position as us
</DIV>

<P align="center" style="font-size: 10pt;">51

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<DIV align="left" style="font-size: 10pt;">
devotes to a product of high market potential, profit potential
or strategic value based on conditions then prevailing. Diligent
efforts require that we:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    promptly assign responsibility for obligations to specific
    employees who are held accountable for progress and monitor such
    progress on an on-going basis;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    set and consistently seek to achieve specific and meaningful
    objectives for carrying out such obligations; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    consistently make and implement decisions and allocate resources
    designed to advance progress in order to fulfill such
    obligations.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
We must conduct any marketing and commercialization activities
on a commercially reasonable basis in compliance with applicable
laws and regulations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Fees, Charges and Costs</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the technology license agreement, we are required to pay
Novogen royalties in the amount of 2% of any gross income
received in connection with the sale, distribution, production,
licensing, marketing or other commercialization of the licensed
products remaining after the deduction of all costs and expenses
incurred by us in marketing and commercialization, research and
development, and business expenses. In addition, if our
manufacturing license and supply agreement is terminated by us
without cause, under the technology license agreement the
royalty rate is increased to 4% of any gross income received in
connection with the sale, distribution, production, licensing,
marketing or other commercialization of the licensed products
remaining after the deduction of all costs and expenses incurred
by us in marketing and commercialization, research and
development, and business expenses. We are also required to pay
all of the expense relating to the filing, prosecution and
maintenance of our licensed patent rights. In fiscal year 2005,
we were only required to pay 50% of these costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the fiscal year ended June&nbsp;30, 2005 we have included an
aggregate of $36,000, representing the cost of patent renewals,
as an expense in the statements of operations. No costs were
incurred under the technology license agreement in the fiscal
year ended June&nbsp;30, 2004.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Confidentiality</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are required to keep and maintain all confidential
information strictly confidential and can use the confidential
information only for the purposes for which it is disclosed to
us. We may not disclose any confidential information, unless
required by law, other than to our employees, authorized
sub-contractors, legal advisers, auditors or other consultants
requiring the information for the purposes of the technology
license agreement upon those persons undertaking to us to keep
that information strictly confidential.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Termination</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen may terminate the agreement if we commit a breach of any
term of the agreement which is not remedied within 21&nbsp;days
of written notice from Novogen requiring the breach to be
remedied. Novogen may also terminate the agreement if we become
the subject of certain bankruptcy proceedings or if a change in
control occurs without the consent of Novogen. A &#147;change in
control&#148; means the acquisition by a person or group other
than Novogen of more than 50% of the combined voting power of
the then outstanding securities entitled to vote generally in
the election of our directors or any merger, consolidation,
reorganization, capitalization, tender or exchange offer or any
other transaction with or effecting us as a result of which a
person or group other than our stockholders immediately before
the transaction owns after the transaction more than 50% of the
combined voting power of the then outstanding securities
entitled to vote generally in election of our directors. A
change in control does not include any acquisition as a result
of, or transaction involving, an initial public offering of our
common stock.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The Amended and Restated Manufacturing License and Supply
Agreement</B>
</DIV>

<DIV align="left" style="font-size: 9pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT style="font-size: 10pt">We have granted to Novogen
Laboratories Pty Limited an exclusive, non-transferable
sub-license of the intellectual property rights granted to us
under the technology license agreement and any intellectual
property rights in manufacturing developments and manufacturing
improvements to make and keep
(1<FONT face="wingdings 3">&#103;</FONT>3)(1<FONT face="wingdings 3">&#103;</FONT>6)-</FONT>&#223;<FONT style="font-size: 10pt">-glucan
in its primary manufactured form, supply us with glucan product
and keep, use, reproduce, apply, develop, modify and enhance the
glucan know how, manufacturing improvements and manufacturing
developments for the purposes of making and supplying glucan
product candidates to us. 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>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to use a portion of the net proceeds of this offering
on laboratory equipment and a pilot-scale manufacturing plan in
order to produce clinical trial quantities of our glucan product
candidates. Once we are able to do so, we intend to exercise our
right under the manufacturing license and supply agreement to
terminate the agreement by paying Novogen a termination fee of
$250,000. In the event we elect to terminate the manufacturing
license and supply agreement, the royalty we pay to Novogen
under the technology license agreement will increase from 2% to
4%.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Supply of Glucan Product Candidates</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We provide to Novogen rolling quarterly forecasts of our
estimated supply requirements for the glucan product candidates,
and issue purchase orders to Novogen at least eight weeks prior
to any proposed supply date confirming the volume of glucan
product candidates required. Novogen must, within five business
days of receiving the purchase order, confirm the quantity it is
able to supply to fulfill the purchase order. Novogen must then
supply the volume of glucan product candidates it agreed to
supply on the proposed supply date, and must otherwise use all
reasonable endeavors to fulfill the purchase order. Novogen must
manufacture and deliver the glucan product candidate to us at a
port nominated by us. Title to the glucan product candidate does
not pass to us until we have received the product candidates
ordered in the purchase order and retention of title
arrangements apply. We are not obligated to purchase any minimum
amount of glucan product candidates from Novogen.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We must also notify Novogen in writing promptly upon filing any
application to the FDA or equivalent government agency in
another country for marketing approval of any glucan product
candidate and keep Novogen reasonably informed of the progress
of all such applications.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If Novogen materially and persistently fails to supply the
amount of glucan product candidates 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 the glucan product candidate until Novogen
demonstrates that it is able to consistently supply the glucan
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 of Novogen necessary to
enable that manufacture to occur. In addition, at any time we
have the right to give a third party the information and
assistance necessary for that third party to develop a
capability to manufacture and supply us with the quantity of our
glucan product candidates required by us that exceeds the
quantity Novogen is able to supply us, but we must notify
Novogen if we intend to do so.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Fees and Charges</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The purchase price for glucan product candidates supplied is the
total costs to Novogen, including raw materials, labor,
manufacturing and overhead, equipment, and any other incidental
costs, plus a mark-up of 50% of that total. The purchase price
may be adjusted quarterly by Novogen by reference to the actual
costs for the preceding quarter. If at any time we do not pay
any amount due to Novogen, Novogen may suspend the supply of
glucan product candidates to us until payment is made. Interest
accrues daily on the outstanding balance of all overdue amounts
payable to Novogen under the manufacturing license and supply
agreement.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To date, there have been no costs charged by Novogen for the
supply of glucan active material under the terms of the
manufacturing license and supply agreement as the clinical trial
material used in the recent Phase II trial was drawn from excess
supplies manufactured for earlier clinical trials.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Manufacturing Developments and Improvements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each party must disclose to the other any new developments,
improvements and new know-how relating to the manufacture of the
glucan product candidates 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 disclose
to Novogen all developments, improvements, enhancements,
adaptations and new know-how made or acquired by us during the
term of the agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Each party to the agreement 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 glucan product candidates licensed under
the agreement.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Confidentiality</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen is required to keep and maintain all confidential
information strictly confidential and can use the confidential
information only for the purposes for which it is disclosed to
Novogen. Novogen may not disclose any confidential information,
unless required by law, other than to its employees, authorized
sub-contractors, legal advisers, auditors or other consultants
requiring the information for the purposes of the manufacturing
license and supply agreement upon those persons undertaking to
Novogen to keep that information strictly confidential.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Termination</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
terminate the agreement immediately if the technology license
agreement expires or is terminated. We may also terminate the
agreement without cause upon 90&nbsp;days written notice
provided that we pay Novogen an amount equal to $250,000. In the
event we elect to terminate the manufacturing license and supply
agreement, the royalty we pay to Novogen under the technology
license agreement will increase from 2% to 4%. Novogen may also
terminate the agreement immediately if a change in control
occurs without the consent of Novogen. A change in control in
the manufacturing license and supply agreement has the same
meaning as in the technology license agreement
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Limitation of Liability</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen is not liable, in contract or tort, to compensate us for
any increased costs, economic loss, or special damages. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The Amended and Restated Services Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen has agreed to provide a range of services to us as an
independent contractor, or procure that its subsidiaries provide
those services. These services include providing general
assistance and advice on research and development and
commercializing the human therapeutic or pharmaceutical
compounds in which we may acquire intellectual property rights
in the future.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We intend to employ our own general manager and administrative
and other staff sufficient to implement our research and
development program, manufacture our glucan product candidates
and perform our financial and administrative functions.
</DIV>

<P align="center" style="font-size: 10pt;">54

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen&#146;s obligations under the services agreement 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
for us with the glucan product candidates and with other
compounds in which we have intellectual property rights. In
addition, Novogen provides us with scientific and technical
advice on management of pre-clinical and clinical research
programs undertaken by us and manages such research programs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen may not sub-contract the provision of any part of the
services without our prior written consent.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Fees for Services</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We pay services fees to Novogen on a monthly basis 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the fiscal years ended June&nbsp;30, 2005 and June&nbsp;30,
2004, we have included an aggregate of $21,000 and $21,000,
respectively, as an expense for services provided by Novogen in
the statements of operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Intellectual Property and Confidentiality</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All intellectual property rights created or developed by or on
behalf of Novogen and its subsidiaries in the performance of
services vest exclusively in us immediately upon their creation.
We are required to assign to Novogen any developments to the
intellectual property licensed to us under the technology
license agreement. Such developments are then licensed back to
us. Each party also has obligations to the other party to honor
the other&#146;s confidential information.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Termination</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, or breaches its obligations and
does not cure such breach within 21&nbsp;days notice. Novogen
may terminate the agreement by written notice if a change in
control occurs without Novogen&#146;s written consent. A change
in control in the services agreement has the same meaning as in
the technology license agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>The Amended and Restated Agency Agreement</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have appointed Novogen Laboratories Pty Limited as our agent
to negotiate and enter into agreements for the conduct of
clinical trials for the glucan product candidates, so Novogen
can arrange and negotiate clinical trial agreements in our stead
and perform the obligations on our behalf.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Fees and Charges</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In exchange for their services, we must pay Novogen all amounts
paid on our behalf under any clinical trial agreements and
reasonable out of pocket expenses, plus an agency fee of 2% of
these total amounts.
</DIV>

<P align="center" style="font-size: 10pt;">55

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the fiscal years ended June&nbsp;30, 2005 and June&nbsp;30,
2004, we have included an aggregate of $6,000 and $2,000,
respectively, representing the net amount of agency fees, as an
expense in the statements of operations.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Intellectual Property</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All intellectual property rights created or developed by or on
behalf of Novogen and its subsidiaries in the performance of
services under the agency agreement vest exclusively in us
immediately upon their creation. We are required to assign to
Novogen any developments to the intellectual property licensed
to us under the technology license agreement. Such developments
are then licensed back to us.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Confidentiality</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen is required to keep and maintain all confidential
information strictly confidential and can use the confidential
information only for the purposes for which it is disclosed to
Novogen. Novogen may not disclose any confidential information,
unless required by law, other than to its employees, authorized
sub-contractors, legal advisers, auditors or other consultants
requiring the information for the purposes of the manufacturing
license and supply agreement upon those persons undertaking to
Novogen to keep that information strictly confidential.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Limitation of Liability and Indemnity</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen is not liable, in contract or tort, to compensate us for
any increased costs, economic loss, or special damages. We also
have indemnified Novogen and its employees for any breach of a
clinical trial agreement, for any personal injury or death of a
person arising out of or relating to a clinical trial or the
administration of a glucan product, for the sale, distribution
or other commercialization or exploitation of glucan product
candidates or any packaging, marketing, advertisement or
promotion of glucan product candidates.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Termination</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We may terminate our rights and obligations under the agency
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, or breaches its obligations and
does not cure such breach within 21&nbsp;days notice. Novogen
may also terminate the agreement if a change in control occurs
without Novogen&#146;s written consent. A change in control in
the agency agreement has the same meaning as in the technology
license agreement.
</DIV>

<P align="center" style="font-size: 10pt;">56

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<DIV align="left" style="font-size: 10pt;">
<A name='114'></A>
</DIV>

<!-- link1 "DESCRIPTION OF OUR SECURITIES" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>DESCRIPTION OF OUR SECURITIES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The 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.
There will be no trading market for the common stock units. The
common stock and warrants comprising the units will separate
immediately upon completion of this offering and prior to any
trading of the common stock and warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Description of our Capital Stock</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon the closing of this offering, our authorized capital stock,
after giving effect to the amendment and restatement of our
certificate of incorporation, will consist
of &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
shares of common
stock, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;par
value,
and &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;million
shares of preferred
stock, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;par
value. The following description summarizes the most important
terms of our capital stock. Because it is only a summary, it
does not contain all the information that may be important to
you. For a complete description you should refer to our
certificate of incorporation and bylaws, effective upon
completion of this offering, copies of which have been filed as
exhibits to the registration statement of which the prospectus
forms a part.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Common Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
As of August&nbsp;31, 2005, there were 2,377,778 shares of
common stock outstanding held by approximately 16 stockholders
of record. Novogen and its other subsidiaries own approximately
84.3% of our current outstanding capital stock. After this
offering, there will
be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock outstanding,
or &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
if the underwriter exercises its over-allotment option in full.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Preferred Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 stockholders. Therefore, the board without the
approval of the stockholders 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 common stock 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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Registration Rights</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We and one of the holders of our common stock, El Coronado
Holdings, LLC, have entered into a registration rights
agreement, dated April&nbsp;11, 2005 under which we have agreed
to provide this holder with certain customary piggyback
registration rights with respect to the shares of common stock
it holds. Registration of these shares under the Securities Act
would result in these shares, unless the holder is deemed an
affiliate of ours, becoming freely tradable without restriction
under the Securities Act. The holder has waived its registration
rights in connection with this offering.
</DIV>

<P align="center" style="font-size: 10pt;">57
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<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Transfer Agent</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our transfer agent
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Description of our Warrants</B>
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Warrants included in the common stock units</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;%
of the initial public offering price set forth on the cover of
this prospectus. The warrants are immediately exercisable and
will
expire &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;years
after the date they are issued. The expiration date may not be
extended without an amendment to the warrant agreement by us and
the warrant agent. 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 do not have any right
to call or otherwise redeem the warrants.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have authorized and reserved for issuance all shares of
common stock issuable upon exercise of each warrant.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 stockholders. 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.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Warrant Agent</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our warrant agent
is &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Summary of our Amended and Restated Bylaws and Amended and
Restated Certificate of Incorporation and certain Provisions of
the Delaware General Corporation Law&nbsp;(DGCL)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following is a summary of the terms and provisions of our
certificate of incorporation and bylaws that will be in effect
upon completion of this offering. Reference should be made to
our certificate of incorporation and our bylaws, effective upon
completion of this offering, and to applicable law for the
complete description.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Meetings of Stockholders and Voting</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our bylaws 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 bylaws 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
</DIV>

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<DIV align="left" style="font-size: 10pt;">
dissent to each corporate action in writing without a meeting
may authorize another person or persons to act for him or her by
proxy.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Appointment and Removal of Directors</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our certificate of incorporation and bylaws provide that the
number of directors will be set by resolution of the board, but
shall be between two and nine. We currently have four directors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under our certificate of incorporation and bylaws, 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 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. This
classified board provision could discourage a third party from
making a tender offer for our shares or attempting to obtain
control of our company. It could also delay stockholders who do
not agree with the policies of the board of directors from
removing a majority of the board of directors for two years.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 appointed shall
serve for the remainder of the full term of the class of
directors in which the vacancy occurred.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Blank Check Preferred Stock</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our certificate of incorporation provides our board of directors
with the authority, without any further vote or action by our
stockholders, to issue shares of preferred stock with terms and
preferences determined by our board. Our board of directors may
issue shares of preferred stock on terms calculated to
discourage, delay or prevent a change of control of our company
or the removal of our management.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Amendments of the Bylaws</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our bylaws provide that the power to amend the bylaws will vest
in the directors, subject to the reserved power of the
stockholders to amend or repeal any bylaws adopted by the board.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Amendments of the Certificate of Incorporation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 submitted 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.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indemnification of Directors and Officers</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<P align="center" style="font-size: 10pt;">59

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To supplement the general indemnification right contained in our
certificate of incorporation, the bylaws provide for the
specific indemnification rights permitted by Section&nbsp;145
(as described above). The bylaws also permit us to purchase
directors and officers insurance, but no director or officer has
a right to require this.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the indemnification rights described above, our
certificate of incorporation eliminates any monetary liability
of directors to us or our stockholders 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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Indemnification of Novogen</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Transactions and Corporate Opportunities</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under our certificate of incorporation, we are subject to
certain provisions that serve to define and delineate the
respective rights and duties of us, Novogen and some of our
directors and officers in situations where:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Novogen invests or engages in business activities that are the
    same as, or similar to, our business activities,</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    directors, officers and/or employees of Novogen serve as our
    directors and/or officers, and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    Novogen has interest in a potential transaction or matter in
    which we have a similar interest in exploiting as a matter of
    corporate opportunity.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Pursuant to our 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    serves as a director, officer or employee of Novogen while
    holding the position of a director but not officer of our
    company; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    serves as an officer or employee of Novogen and serves as one of
    our officers.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
opportunities were offered to that officer in his or her
official capacity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
By becoming one of our stockholders, you will be deemed to have
notice of and consented to these provisions of our 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.
</DIV>

<P align="center" style="font-size: 10pt;">60

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<DIV align="left" style="font-size: 10pt;">
<A name='115'></A>
</DIV>

<!-- link1 "SECURITIES ELIGIBLE FOR FUTURE SALE" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SECURITIES ELIGIBLE FOR FUTURE SALE</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon completion of this offering, there will
be &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
(&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
if the over-allotment option is exercised in full) of our common
stock outstanding. Of the shares which will be outstanding after
the offering:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    will be &#147;restricted securities&#148; held by non-affiliates;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    will be &#147;restricted securities&#148; held by affiliates; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    will be held by Novogen.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Restricted securities&#148; are securities that were
originally sold in offerings that were not registered under the
Securities Act. These restricted shares may only be sold through
registration under the Securities Act or under an available
exemption from registration, such as provided through
Rule&nbsp;144.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen and El Coronado Holdings, LLC have entered into lock-up
agreements pursuant to which they have agreed, subject to
limited exceptions, not to offer or sell any shares of common
stock or securities convertible into or exchangeable or
exercisable for shares of common stock for a period of
180&nbsp;days from the effective date of the registration
statement of which this prospectus forms a part without the
prior written consent of Janney Montgomery Scott LLC. See
&#147;Underwriting.&#148; After the 180-day lock-up period,
these shares may be sold, subject to applicable securities laws.
Notwithstanding the foregoing, if the expiration of the lock-up
period occurs within 17&nbsp;days following an earnings release
by us or the occurrence of material news or a material event
related to us, or if we intend to issue an earnings release
within 16&nbsp;days following the expiration of the lock-up
period, the lock-up period will be extended to the 18th day
following such earnings release or the occurrence of the
material news or material even unless such extension is waived
by the underwriter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
After this offering, the holders of
approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
of our common stock will be entitled to registration rights. For
more information on these registration rights, see
&#147;Description of Capital Stock&nbsp;&#151; Registration
Rights.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In general, under Rule&nbsp;144, as currently in effect, a
person (or persons whose shares are aggregated), including an
affiliate, who has beneficially owned shares of our common stock
for one year or more, may sell in the open market within any
three-month period a number of shares that does not exceed the
greater of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    one percent of the then outstanding shares of our common stock
    (approximately &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    immediately after this offering); or;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the average weekly trading volume in the common stock on the
    Nasdaq National Market during the four calendar weeks preceding
    the sale.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Sales under Rule&nbsp;144 are also subject to certain
limitations on the manner of sale, notice requirements and the
availability of current public information concerning us and may
not commence until 90&nbsp;days after completion of this
offering. A person (or persons whose shares are aggregated) who
is deemed not to have been our affiliate at any time during the
90&nbsp;days preceding a sale by him or her and who has
beneficially owned his or her shares for at least two years, may
sell the shares in the public market under Rule&nbsp;144(k)
without regard to the volume limitations, manner of sale
provisions, notice requirements or the availability of current
public information we refer to above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Subject to the lock-up agreements, the shares of our common
stock that will become eligible for sale pursuant to
Rule&nbsp;144 or Rule&nbsp;701 under the Securities Act are as
follows:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    will be immediately eligible for sale in the public market
    without registration pursuant to Rule&nbsp;144(k); and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;shares
    will be eligible for sale in the public market under
    Rule&nbsp;144 or Rule&nbsp;701 beginning 90&nbsp;days after
    completion of this offering, subject to volume, manner of sale,
    and other limitations under those rules.</TD>
</TR>

</TABLE>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Upon completion of this offering, we intend to file a
registration statement on Form&nbsp;S-8 under the Securities Act
to register shares of common stock reserved for issuance under
our Equity Compensation Plan. Persons who are not affiliates,
and who receive shares that are registered under this
registration statement, will be able to resell those shares in
the public market without restriction under the Securities Act.
This registration statement will become effective immediately
upon filing.
</DIV>

<P align="center" style="font-size: 10pt;">62

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<DIV align="left" style="font-size: 10pt;">
<A name='116'></A>
</DIV>

<!-- link1 "UNDERWRITING" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>UNDERWRITING</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We are offering the common stock units described in this
prospectus by means of an underwritten public offering. We have
entered into a firm commitment underwriting agreement with
Janney Montgomery Scott LLC as underwriter. Subject to the terms
and conditions of the underwriting agreement, we have agreed to
sell to the underwriter, and the underwriter has agreed to
purchase, &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;common
stock units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriting agreement is subject to a number of terms and
conditions and provides that the underwriter must buy all of the
common stock units if it buys any of them. The underwriter will
sell the units to the public when and if the underwriter buys
the units from us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriter initially will offer the common stock units to
the public at the price specified on the cover page of this
prospectus. The underwriter may allow a concession of not more
than
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;per
unit to selected dealers. If all the common stock units are not
sold at the public offering price, the underwriter may change
the public offering price and the other selling terms. The
common stock units are offered subject to a number of
conditions, including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    receipt and acceptance of the common stock and warrants by the
    underwriter; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the underwriter&#146;s right to reject orders in whole or in
    part.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Over-Allotment Option. </I>We have granted the underwriter an
over-allotment option to buy up
to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;additional
common stock units at the same price per unit as they are paying
for the common stock units described above. These additional
common stock units would cover sales of common stock units by
the underwriter that exceed the total number of common stock
units described above. The underwriter may exercise this option
at any time within 30&nbsp;days after the date of this
prospectus. If purchased, the additional common stock units will
be sold by the underwriter on the same terms as those on which
the other common stock units are sold. We will pay the expenses
associated with the exercise of this option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Discount and Commissions. </I>The following table shows the
per share and total underwriting discounts and commissions to be
paid to the underwriter by us. These amounts are shown assuming
no exercise and full exercise of the underwriters&#146; option
to purchase additional common stock units.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="63%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>Paid by Us</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>No Exercise</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Full Exercise</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Per unit</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

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

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We estimate that the expenses of the offering to be paid by us,
not including underwriting discounts and commissions, will be
approximately
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Listing. </I>We are applying to have our common stock and
warrants approved for quotation on the Nasdaq National Market
under the symbols &#147;GLTX&#148; and &#147;GLTXW,&#148;
respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Stabilization. </I>In connection with this offering, the
underwriter may engage in activities that stabilize, maintain or
otherwise affect the price of our common stock or warrants,
including:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    stabilizing transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    short sales;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    syndicate covering transactions; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    purchases to cover positions created by short sales.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Stabilizing transactions consist of bids or purchases made for
the purpose of preventing or retarding a decline in the market
price of our common stock or warrants while this offering is in
progress. Stabilizing transactions may include making short
sales of our common stock or warrants, which involves the sale by
</DIV>

<P align="center" style="font-size: 10pt;">63

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<DIV align="left" style="font-size: 10pt;">
the underwriter of a greater number of shares of common stock or
warrants than they are required to purchase in this offering,
and purchasing shares of common stock or warrants from us or on
the open market to cover positions created by short sales. Short
sales may be &#147;covered&#148; shorts, which are short
positions in an amount not greater than the underwriter&#146;s
over-allotment option referred to above, or may be
&#147;naked&#148; shorts, which are short positions in excess of
that amount. Syndicate covering transactions involve purchases
of our common stock or warrants in the open market after the
distribution has been completed in order to cover syndicate
short positions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The underwriter may close out any covered short position either
by exercising its over-allotment option, in whole or in part, or
by purchasing shares of common stock or warrants in the open
market. In making this determination, the underwriter will
consider, among other things, the price of shares of common
stock or warrants available for purchase in the open market
compared to the price at which the underwriter may purchase
common stock units through the over-allotment option.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A naked short position is more likely to be created if the
underwriter is concerned that there may be downward pressure on
the price of the common stock or warrants in the open market
that could adversely affect investors who purchased common stock
units in this offering. To the extent that the underwriter
creates a naked short position, it will purchase shares of
common stock or warrants in the open market to cover the
position.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
These activities may have the effect of raising or maintaining
the market price of our common stock or warrants or preventing
or retarding a decline in the market price of our common stock
or warrants. As a result of these activities, the price of our
common stock or warrants may be higher than the price that
otherwise might exist in the open market. If the underwriter
commences the activities, it may discontinue them at any time.
The underwriter may carry out these transactions on the Nasdaq
National Market, in the over-the-counter market or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In connection with this offering, the underwriter and any
selling group members who are qualified market makers on the
Nasdaq National Market may engage in passive market making
transactions in our common stock or warrants on the Nasdaq
National Market. Passive market making is allowed during the
period when the SEC&#146;s rules would otherwise prohibit market
activity by the underwriter and dealers who are participating in
this offering. Passive market making may occur during the
business day before the pricing of this offering, before the
commencement of offers or sales of the common stock units. A
passive market maker must comply with applicable volume and
price limitations and must be identified as a passive market
maker. In general, a passive market maker must display its bid
at a price not in excess of the highest independent bid for our
common stock or warrants; but if all independent bids are
lowered below the passive market maker&#146;s bid, the passive
market maker must also lower its bid once it exceeds specified
purchase limits. Net purchases by a passive market maker on each
day are limited to a specified percentage of the passive market
maker&#146;s average daily trading volume in our common stock or
warrants during the specified period and must be discontinued
when that limit is reached. Passive market making may cause the
price of our common stock or warrants to be higher than the
price that otherwise would exist in the open market in the
absence of those transactions. The underwriter and dealers are
not required to engage in passive market making and may end
passive market making activities at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>IPO Pricing. </I>Prior to this offering, there has been no
public market for our common stock or warrants. The initial
public offering price will be negotiated between us and the
underwriter. Among the factors to be considered in these
negotiations are:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the history of, and prospects for, our company and the industry
    in which we compete;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    our past and present financial performance;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    an assessment of our management;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the present state of our development;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the prospects for our future earnings;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">64

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<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    the prevailing conditions of the applicable United States
    securities market at the time of this offering;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    market valuations of publicly traded companies that we and the
    underwriter believe to be comparable to us; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    other factors deemed relevant.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The estimated initial public offering price range set forth on
the cover of this preliminary prospectus is subject to change as
a result of market conditions and other factors.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Lock-up Agreements. </I>We, Novogen and El Coronado Holdings,
LLC have entered into lock-up agreements with the underwriter.
Under these agreements, subject to exceptions, we may not issue
any new shares of common stock other than the shares of common
stock or options to acquire common stock issued under our Equity
Compensation plan or shares of common stock issuable upon
exercise of the warrants that are included in the Common Stock
Units, and those holders of stock may not, directly or
indirectly, offer, sell, contract to sell, pledge or otherwise
dispose of or hedge any common stock or securities convertible
into or exchangeable for shares of common stock, or publicly
announce the intention to do any of the foregoing, without the
prior written consent of Janney Montgomery Scott LLC for a
period of 180&nbsp;days from the effective date of the
registration statement of which the prospectus forms a part.
This consent may be given at any time without public notice. In
addition, during this 180-day period, we have also agreed not to
file any registration statement for, and each of our officers
and stockholders has agreed not to make any demand for, or
exercise any right of, the registration of, any shares of common
stock or any securities convertible into or exercisable or
exchangeable for common stock without the prior written consent
of Janney Montgomery Scott LLC. Notwithstanding the foregoing,
if the expiration of the lock-up period occurs within
17&nbsp;days following an earnings release by us or the
occurrence of material news or a material event related to us,
or if we intend to issue an earnings release within 16&nbsp;days
following the expiration of the lock-up period, the lock-up
period will be extended to the 18th day following such earnings
release or the occurrence of the material news or material even
unless such extension is waived by the underwriter.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Indemnification. </I>We will indemnify the underwriter
against some liabilities, including liabilities under the
Securities Act. If we are unable to provide this
indemnification, we will contribute to payments the underwriter
may be required to make in respect of those liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<I>Conflicts/ Affiliates. </I>The underwriter and its affiliates
may in the future provide various investment banking, commercial
banking and other financial services for us and our affiliates
for which services they have received, and may in the future
receive, customary fees.
</DIV>

<P align="center" style="font-size: 10pt;">65

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<DIV align="left" style="font-size: 10pt;">
<A name='117'></A>
</DIV>

<!-- link1 "LEGAL MATTERS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>LEGAL MATTERS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The validity of the securities offered hereby will be passed
upon for us by Morgan, Lewis &#38; Bockius LLP, New York, New
York. Certain legal matters will be passed upon for the
underwriter by Dechert LLP, Philadelphia, Pennsylvania.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='118'></A>
</DIV>

<!-- link1 "EXPERTS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>EXPERTS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The financial statements of Glycotex, Inc. (a development stage
company) at June&nbsp;30, 2005 and June&nbsp;30, 2004, and for
the years ended June&nbsp;30, 2005, June&nbsp;30, 2004 and
June&nbsp;30, 2003 and for the period from May&nbsp;5, 1999
(inception)&nbsp;through June&nbsp;30, 2005, appearing in this
prospectus and registration statement have been audited by BDO,
independent Registered Public Accounting Firm, as set forth in
their report thereon appearing elsewhere herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Such financial statements are included in reliance upon such
reports given on the authority of such firm as experts in
accounting and auditing.
</DIV>

<DIV align="left" style="font-size: 10pt;">
<A name='119'></A>
</DIV>

<!-- link1 "AVAILABLE INFORMATION" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>AVAILABLE INFORMATION</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. We do
not intend to use any forms of prospectus other than printed
prospectuses. 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 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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. We intend to furnish our stockholders with
annual reports containing financial statements audited by our
independent registered public accounting firm.
</DIV>

<P align="center" style="font-size: 10pt;">66
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt;">
<A name='120'></A>
</DIV>

<!-- link1 "INDEX TO FINANCIAL STATEMENTS" -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INDEX TO FINANCIAL STATEMENTS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="93%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Report of Independent Registered Public Accounting Firm</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-2</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance Sheets at June&nbsp;30, 2005 and 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Statements of Operations for the years ended June&nbsp;30, 2005,
    2004 and 2003, and the period from May&nbsp;5, 1999
    (inception)&nbsp;through June&nbsp;30, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-4</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Statement of Stockholders&#146; Equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-5</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Statements of Cash Flows for the years ended June&nbsp;30, 2005,
    2004 and 2003, and the period from May&nbsp;5, 1999 (inception)
    through June&nbsp;30, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Notes to Financial Statements</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>F-7</TD>
    <TD>&nbsp;</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">F-1
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Report of Independent Registered Public Accounting Firm</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
The Board of Directors
</DIV>

<DIV align="left" style="font-size: 10pt;">
Glycotex, Inc.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We have audited the accompanying balance sheets of Glycotex,
Inc. (a development stage company) as of June&nbsp;30, 2004 and
2005, and the related statements of operations,
stockholders&#146; equity, and cash flows for each of the three
years in the period ended June&nbsp;30, 2005 and for the period
from May&nbsp;5, 1999 (inception)&nbsp;through June&nbsp;30,
2005. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company&#146;s internal control over
financial reporting. Accordingly, we express no such opinion. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Glycotex, Inc. at June&nbsp;30, 2004 and 2005, and the
results of its operations and its cash flows for each of the
three years in the period ended June&nbsp;30, 2005 and the
period from May&nbsp;5, 1999 (inception)&nbsp;through
June&nbsp;30, 2005<B>, </B>in conformity with accounting
principles generally accepted in the United States of America.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
/s/ <FONT style="font-variant:SMALL-CAPS">BDO
</FONT>
</DIV>

<DIV align="left" style="font-size: 10pt;">
BDO
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
Sydney, NSW, Australia
</DIV>

<DIV align="left" style="font-size: 10pt;">
September&nbsp;8, 2005
</DIV>

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

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>BALANCE SHEETS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="73%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>June 30,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="11" align="center" valign="top">
    <B>ASSETS</B></TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&nbsp;&nbsp; &nbsp;240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="11" align="center" valign="top">
    <B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Current liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amount due to related company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total current liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>59</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Stockholders&#146; equity:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Preferred stock, $0.01 par value, authorized 100,000 shares,
    none outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock, $0.00000025 par value, 4,000,000 authorized
    shares; shares issued and outstanding: 2,377,778 at
    June&nbsp;30, 2005 and 2,050,000 at June&nbsp;30, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Additional paid-in capital</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deficit accumulated during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(147</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total stockholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,492</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total liabilities and shareholders&#146; equity</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-3
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>STATEMENTS OF OPERATIONS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>May 5, 1999</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended June&nbsp;30,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Inception)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>June 30, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(In thousands, excepts share and per share data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Operating expenses:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Research and development</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(349</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(138</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(493</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Selling, general and administrative</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(14</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(3</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(17</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total operating expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss from operations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Income tax expense</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss per common share:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Basic and diluted</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(0.17</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(0.07</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Weighted average common shares outstanding</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,151,103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,073</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-4

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

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>STATEMENT OF STOCKHOLDERS&#146; EQUITY</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="44%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Deficit</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Accumulated</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Additional</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>During</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Common</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Paid-in</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Development</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stock</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Capital</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Stage</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center"><B>(Shares)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at June&nbsp;30, 1999</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance June&nbsp;30, 2000</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance June&nbsp;30, 2001</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at June&nbsp;30, 2002</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock issued May&nbsp;5, 2003 (including 100,000 warrants)</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at June&nbsp;30, 2003</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(6</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>322</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at June&nbsp;30, 2004</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(147</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>181</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock issued upon conversion of warrants</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>90,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>672</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>672</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Common stock issued April&nbsp;11, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>237,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,002</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Balance at June&nbsp;30, 2005</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,377,778</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>5,002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,492</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
On March&nbsp;18, 2003, we effected a common stock split whereby
the 50&nbsp;outstanding shares of common stock were reclassified
and converted into 2,000,000&nbsp;shares of common stock.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-5
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>STATEMENTS OF CASH FLOWS</B>
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 12pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="28%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Period from</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>May&nbsp;5, 1999</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended June 30,</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(Inception)</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>through</B></TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>June 30, 2005</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="14" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Operating activities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(510</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjustments to reconcile net loss to net cash (used in) provided
    by operating activities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Changes in operating assets and liabilities:</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounts payable</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>14</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Amounts due to related company</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>41</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>53</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash used in operating activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(308</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(396</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(396</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
</TR>

<TR>
    <TD colspan="3" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Financing activities</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net proceeds from issuance of common stock</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,002</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net cash provided by financing activities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,674</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>5,002</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net increase (decrease)&nbsp;in cash and cash equivalents</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,366</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(88</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents at beginning of period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Cash and cash equivalents at end of period</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="center" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
See accompanying notes.
</DIV>

<P align="center" style="font-size: 10pt;">F-6
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTES TO FINANCIAL STATEMENTS</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>June&nbsp;30, 2005</B>
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>1.</B></TD>
    <TD>
    <B>Organization and Basis of Preparation of Financial
    Statements</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Glycotex, Inc. (the &#147;Company&#148;), a subsidiary of
Novogen Limited (&#147;Novogen&#148;), is a development stage
company incorporated in May 1999 that commenced operations in
May 2003 coinciding with an initial private placement of 50,000
shares of the Company&#146;s common stock to Australian and
international investors and institutions. The shares were issued
at $A10.00 (approximately $6.56) each with attaching warrants to
purchase a further two shares at an exercise price of $A10.00
(approximately $7.47) per share. The attaching options were
exercisable prior to November&nbsp;5, 2004. Novogen also issued
to these investors a convertible security enabling investors to
convert their investment in Glycotex, Inc. to Novogen shares at
an equivalent Novogen share price of $A5.00 (approximately
$3.28) per share. Proceeds of this placement were $A500,000
(approximately $328,000) in the aggregate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
During November 2004, the Company received a total of $A900,000
(approximately $672,000) following the exercise of 90,000
warrants at an exercise price of $A10.00 (approximately $7.47)
per share. The warrants were issued as part of the initial
private placement. Also, in November 2004, Novogen issued 10,000
of its shares following the conversion of 5,000 of the
Company&#146;s shares under the terms of the Novogen convertible
security.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In April 2005 the Company issued a further 237,778 shares of
common stock in a private placement to a U.S. investor. The
shares were issued at $16.83 per share. The proceeds of the
placement were $4,001,804 in the aggregate. After giving effect
to the above transactions, Novogen owns approximately 84.3% of
the Company&#146;s issued and outstanding capital stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen&#146;s subsidiary, Novogen Research Pty Limited, has
granted the Company an exclusive, worldwide, non-transferable
license to use and exploit the glucan technology, which includes
glucan patent rights, know-how and any developments in relation
to the patent rights and know-how, solely in the fields of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prevention and treatment of ultraviolet light induced skin
    damage in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    joint repair, particularly with artificial joints in humans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of poorly healing surgically dissected or transected
    tissue in humans.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The license is exclusive until the expiration or lapsing of the
last relevant Novogen patents or patent applications in the
world, which the Company expects will be no earlier than
March&nbsp;13, 2016. The license grants the Company the right
to:&nbsp;(i)&nbsp;make, use, reproduce, market, distribute,
sell, hire or otherwise dispose of the licensed glucan product
candidates and inventions, (ii)&nbsp;modify, enhance, create
derivative works based on and further develop the glucan
patents, (iii)&nbsp;keep, use, reproduce and make adaptations of
the glucan material provided to the Company by Novogen and
(iv)&nbsp;use any methods or processes forming part of the
glucan technology to do any of the foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s initial business focus is to continue the
clinical program currently underway for the development and
commercialization of MG3601 for the treatment of chronic venous
ulcers.
</DIV>

<P align="center" style="font-size: 10pt;">F-7
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTES TO FINANCIAL STATEMENTS&nbsp;&#151; (Continued)</B>
</DIV>

<DIV style="margin-top: 21pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>2.</B></TD>
    <TD>
    <B>Accounting Policies</B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Estimates</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The preparation of the 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.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Cash Equivalents</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash
equivalents.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Income Taxes</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Fair Value of Financial Instruments</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The carrying amounts of the Company&#146;s financial
instruments, including cash and cash equivalents, and accounts
payable approximate fair value.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Research and Development Expenses</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Research and development expenses relate primarily to the cost
of conducting human clinical trials of glucan product
candidates. Research and development costs are charged to
expense as incurred. Research and development expenses consist
mainly of clinical trial expenditures, payments to Novogen for
research and support services under the terms of the services
agreement and the cost of glucan product candidates used in the
clinical trials supplied by Novogen under the terms of the
manufacturing license and supply agreement.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>License Fees</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Costs incurred related to the acquisition or licensing of
products that have not yet received regulatory approval to be
marketed, or that are not commercially viable and ready for use
or have no alternative future use, are charged to earnings in
the period incurred.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Equity Compensation</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s equity compensation plan provides for the
grant of equity based awards to the Company&#146;s employees,
directors, individuals who are employees of any entity
controlled by, or in control of, the Company or other persons or
entities providing significant services to the Company or any
entity controlled by, or in control of, the Company. To date no
awards have been granted under the plan.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Basic and Diluted Loss Per Share</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
</DIV>

<P align="center" style="font-size: 10pt;">F-8

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

<DIV align="center" style="font-size: 10pt;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTES TO FINANCIAL STATEMENTS&nbsp;&#151; (Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
options and warrants are excluded, whereas for diluted earnings
per share they are included unless the effect is anti-dilutive.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Comprehensive Loss</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Comprehensive loss is comprised of net loss and other
comprehensive loss. Other comprehensive loss includes certain
changes in stockholders&#146; equity that are excluded from net
loss. Comprehensive loss for all periods presented has been
reflected in the statement of stockholders&#146; equity.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD></TD>
    <TD>
    <B><I>Recent Accounting Announcements</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Share-Based Payments</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In December 2004, the FASB Issued Statement of Financial
Accounting Standards No.&nbsp;123R (Statement&nbsp;123R),
&#147;Share-Based Payments,&#148; the provisions of which become
effective for the Company in fiscal year&nbsp;2006. This
Statement eliminates the alternative to use
APB&nbsp;No.&nbsp;25&#146;s intrinsic value method of accounting
that was provided in Statement&nbsp;123 as originally issued.
Statement&nbsp;123R requires companies to recognize the cost of
employee services received in exchange for awards of equity
instruments based on the grant-date fair value of those awards,
while the fair-value-based method prescribed by
Statement&nbsp;123R is similar to the fair-value-based method
disclosed under the provisions of Statement&nbsp;123 in most
respects, there are some differences. The Company&#146;s equity
compensation plan provides for the grant of equity awards to the
Company&#146;s directors, employees, employees of the
Company&#146;s affiliates and certain of the Company&#146;s
contractors and consultants. To date no equity awards have been
issued under the plan. Statement&nbsp;123R is effective for the
Company in fiscal year 2006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Accounting Changes and Error Corrections</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In May 2005, the FASB issued Statement of Financial Accounting
Standards No.&nbsp;154 (SFAS&nbsp;154), &#147;Accounting Changes
and Error Corrections,&#148; which provides guidance on the
accounting for and reporting of accounting changes and
correction of errors. This statement changes the requirements
for the accounting for and reporting of a change in accounting
principle and applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. This statement
is effective for accounting changes and corrections of errors
made in fiscal years beginning after December&nbsp;15, 2005. The
Company does not anticipate a material effect upon the adoption
of this statement.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>3.</B></TD>
    <TD>
    <B>Income Taxes</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Loss from operations consists of the following:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="76%">&nbsp;</TD>

    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

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


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>Year ended June 30,</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>(In thousands)</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Domestic</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;&#151;&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">F-9
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTES TO FINANCIAL STATEMENTS&nbsp;&#151; (Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The reconciliation of income tax computed at the U.S. federal
statutory rate to income tax expense attributable to loss
arising during development stage is as follows:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="34%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>

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


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="22" align="center" nowrap><B>Year ended June 30,</B></TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="6" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>(In thousands)</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>%</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax at US statutory rates</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(127</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(49</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Change in valuation allowance</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>127</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>35</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Deferred tax assets are comprised of the following:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="73%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

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


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>Year ended June 30,</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="11" align="center" nowrap><B>(In thousands)</B></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Deferred tax assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Tax carried forward losses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total deferred tax assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>176</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>49</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Valuation allowance for deferred tax assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(176</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>(49</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net deferred tax assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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, 2005 and 2004. 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
There was no benefit from income taxes recorded for the period
from May&nbsp;5, 1999 (inception)&nbsp;to June&nbsp;30, 2005 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 $504,000 and $141,000 at June 30,
2005 and 2004, respectively. The federal net operating losses
will begin to expire in 2022.
</DIV>

<DIV style="margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>4.</B></TD>
    <TD>
    <B>Loss Per Share</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the components for the
computation of basic and diluted net loss per common share:
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="59%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>Year Ended June 30,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>(In thousands, except share data)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Numerator</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of dilutive securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Numerator for diluted earnings per share</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Denominator</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Denominator for basic earnings per share &#151; weighted-average
    shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,151,103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,073</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Effect of dilutive securities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Adjusted weighted-average shares</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,151,103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,050,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>2,000,073</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">F-10
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTES TO FINANCIAL STATEMENTS&nbsp;&#151; (Continued)</B>
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>5.</B></TD>
    <TD>
    <B>Financial Instruments</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The fair value of financial assets and liabilities approximates
their carrying value in the Balance Sheets because they are
short term and at market rates of interest.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>6.</B></TD>
    <TD>
    <B>Commitments and Contingencies</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
At June&nbsp;30, 2005, the Company had contracted to conduct
research and development expenditures of approximately $43,000.
Of the expenditure commitments, clinical trial amounts are based
on the assumption that all patients enrolled in clinical trials
will complete the maximum number of allowed treatment cycles.
The amounts expected to be incurred assuming all treatment
cycles are completed, are as follows.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="34%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap><B>Payment due by period</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>less than 1</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="7">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>More than</B></TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD align="center" nowrap><B>Contractual Obligations</B></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Year</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>1-3 Years</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>3-5 Years</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>5 Years</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="15" align="center" nowrap><B>(In thousands)</B></TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Purchase Obligations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Total</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>43</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company is not currently a party to any material legal
proceedings.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>7.</B></TD>
    <TD>
    <B>Segment Information</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company&#146;s focus is to continue the clinical program for
its glucan product candidates. Clinical trials to date have been
conducted in Australia.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 8pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="17%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>


<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="34" align="center" nowrap><B>Year Ended June 30,</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="34" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>2005</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>2004</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap><B>2003</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="10" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>

<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>USA</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Australia</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>USA</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Australia</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>USA</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Australia</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap><B>Total</B></TD><TD></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
</TR>


<TR style="font-size: 7pt;">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="34" align="center" nowrap><B>(in thousands)</B></TD><TD></TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Statement of Operations</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Loss from operations</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Net loss arising during development stage</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(363</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>(141</TD>
    <TD align="left" valign="bottom" nowrap>)</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    <B>Balance Sheet</B></DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment assets</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>4,606</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>240</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>328</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

<TR>
    <TD align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Segment liabilities</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>114</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>59</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>&#151;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>6</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD><B>8.</B></TD>
    <TD>
    <B>Related Party Transactions</B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The Amended and Restated
Technology License Agreement</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Novogen&#146;s subsidiary, Novogen Research Pty Limited, has
granted the Company an exclusive, worldwide, non-transferable
license under its patents and patent applications and in its
licensed know-how to use and exploit its glucan technology
solely in the fields of:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">F-11
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV align="center" style="font-size: 10pt;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTES TO FINANCIAL STATEMENTS&nbsp;&#151; (Continued)</B>
</DIV>

<DIV style="margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    prevention and treatment of ultraviolet light induced skin
    damage in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    joint repair, particularly with artificial joints in humans; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>&#149;&nbsp;</TD>
    <TD align="left">
    treatment of poorly healing surgically dissected or transected
    tissue in humans.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The license is exclusive until the expiration or lapsing of the
last relevant Novogen patents or patent applications in the
world, which the Company expects will be no earlier than
March&nbsp;13, 2016, and thereafter is non-exclusive for the
remainder of the term of the agreement. The license grants the
Company the right to:&nbsp;(i)&nbsp;make, use, reproduce,
market, distribute, sell, hire or otherwise dispose of the
licensed glucan product candidates and inventions,
(ii)&nbsp;modify, enhance, create derivative works based on and
further develop the glucan patents (iii)&nbsp;keep, use,
reproduce and make adaptations of the glucan material provided
to the Company by Novogen and (iv)&nbsp;use any methods or
processes forming part of the glucan technology to do any of the
foregoing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the Technology License Agreement, the Company is required
to pay Novogen royalties in the amount of 2% of any gross income
received in connection with the sale, distribution, production,
licensing, marketing or other commercialization of the licensed
products remaining after the deduction of all costs and expenses
incurred by the Company in marketing and commercialization,
research and development, and business expenses. In addition, if
the Company&#146;s Manufacturing License and Supply Agreement is
terminated by the Company without cause, under the Technology
License Agreement the royalty rate is increased to 4% of any
gross income received in connection with the sale, distribution,
production, licensing, marketing or other commercialization of
the licensed products remaining after the deduction of all costs
and expenses incurred by the Company in marketing and
commercialization, research and development, and business
expenses. The Company is also required to pay all of the expense
relating to the filing, prosecution and maintenance of the
Company&#146;s licensed patent rights. In fiscal year 2005, the
Company was only required to pay 50% of these costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the fiscal year ended June&nbsp;30, 2005, the Company has
included an aggregate of $36,000, representing the cost of
patent renewals, as an expense in the statements of operations.
No costs were incurred under the Technology License Agreement in
the fiscal year ended June&nbsp;30, 2004.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The Amended and Restated
Manufacturing License and Supply Agreement</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Under the terms of the Manufacturing License and Supply
Agreement, Novogen will supply glucan in its primary
manufactured form for the clinical trial development program and
glucan&#146;s ultimate commercial use. Novogen will supply
glucan at cost plus a 50% markup. The Company or Novogen may
terminate the agreement under certain circumstances. No amounts
have been charged by Novogen under the terms of the
Manufacturing License and Supply Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Once the Company is able to construct its own pilot-scale
manufacturing plant, it intends to exercise its right under the
Manufacturing License and Supply Agreement to terminate the
agreement by paying Novogen a termination fee of $250,000. In
the event the Company elects to terminate the Manufacturing
License and Supply Agreement, the royalty the Company pays to
Novogen under the Technology License Agreement will increase
from 2% to 4%.
</DIV>

<P align="center" style="font-size: 10pt;">F-12

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<DIV align="center" style="font-size: 10pt;">
<B>GLYCOTEX, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt;">
<B>(A Development Stage Company)</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>NOTES TO FINANCIAL STATEMENTS&nbsp;&#151; (Continued)</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The Amended and Restated
Services Agreement</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company currently does not directly employ any staff and
Novogen will provide or procure services reasonably required by
the Company relating to the development and commercialization of
the Company&#146;s glucan product candidates 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. The Company intends
to employ its own general manager and administrative and other
staff sufficient to implement its research and development
program, manufacture its glucan product candidates and perform
its financial and administrative functions.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the fiscal years ended June&nbsp;30, 2005 and June&nbsp;30,
2004, the Company incurred an aggregate of $21,000 and $21,000
of expenses, respectively, for services provided by Novogen
under the terms of the Services Agreement. No costs were
incurred in the fiscal year ended June&nbsp;30, 2003.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The Amended and Restated
Agency Agreement</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Company has appointed Novogen Laboratories Pty Limited as
its agent to negotiate and enter into agreements for the conduct
of clinical trials for the glucan product candidates, so Novogen
can arrange and negotiate clinical trial agreements in our stead
and perform the obligations on the Company&#146;s behalf.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In exchange for their services, the Company must pay Novogen
Laboratories all amounts paid on behalf of the Company under any
clinical trial agreements and reasonable out of pocket expenses,
plus an agency fee of 2% of these total amounts.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
For the fiscal years ended June&nbsp;30, 2005 and June&nbsp;30,
2004, the Company incurred an aggregate of $6,000 and $2,000 of
expenses, respectively, representing the net amount of agency
fees to Novogen under the terms of the Agency Agreement. No
costs were incurred in the fiscal year ended June&nbsp;30, 2003.
</DIV>

<P align="center" style="font-size: 10pt;">F-13

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<DIV align="center" style="font-size: 2pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 3pt;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 14pt; margin-top: 7pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>&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;Common
Stock Units</B>
</DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Glycotex, Inc.</B>
</DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Janney Montgomery Scott
<FONT style="font-size: 14pt">LLC</FONT></B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;,
2005
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 9pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 this 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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 or the shares of common stock and warrants that
comprise the common stock units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>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 of our common stock units from persons who are
residents of such jurisdictions.</B>
</DIV>

<DIV align="center" style="font-size: 3pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 100%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 4pt;">
<DIV style="width: 100%; border-top: 2.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<!-- PAGEBREAK -->
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<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>PART II</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>INFORMATION NOT REQUIRED IN PROSPECTUS</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Item&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Other Expenses
of Issuance and Distribution.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The following table sets forth the expenses (other than
underwriting compensation expected to be incurred) in connection
with this offering. All of such amounts (except the SEC
registration fee and the NASD filing fee) are estimated.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="3%">&nbsp;</TD>
    <TD width="84%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    SEC registration fee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">$</TD>
    <TD align="right" valign="bottom" nowrap>10,123</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NASDAQ listing fee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    NASD filing fee</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>9,100</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Blue Sky fees and expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Printing and engraving costs</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Legal fees and expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Accounting fees and expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Transfer Agent, Warrant Agent and Registrar fees and expenses</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" bgcolor="#cceeff">
    <TD colspan="2" align="left" valign="top">
    <DIV style="margin-left: 10px; text-indent: -10px">
    Miscellaneous</DIV>
    </TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom" nowrap>*</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

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

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left" style="border-top: 3pt double #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>

</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 30%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    To be completed by amendment.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Item&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indemnification
of Directors and Officers.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our Amended and Restated 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
To supplement the general indemnification right contained in our
Amended and Restated Certificate of Incorporation, our Amended
and Restated By-Laws provide for the specific indemnification
rights permitted by Section&nbsp;145 (as described above). Our
Amended and Restated By-Laws also permit us to purchase
directors and officers insurance, but no director or officer has
a right to require this.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
In addition to the indemnification rights described above, our
Amended and Restated Certificate of Incorporation eliminates any
monetary liability of directors to us or our stockholders 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.
</DIV>

<P align="center" style="font-size: 10pt;">II-1

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

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Underwriting Agreement, filed as Exhibit&nbsp;1.1, provides
that the underwriter named therein will indemnify us and hold us
harmless and each of our directors, officers or controlling
persons from and against certain liabilities, including
liabilities under the Securities Act. The Underwriting Agreement
also provides that such underwriter will contribute to certain
liabilities of such persons under the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Item&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Recent Sales of
Unregistered Securities.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Within the past three years, we have issued and sold the
following securities which were not registered under the
Securities Act:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    1.&nbsp;In April, 2005, we issued to El Coronado Holdings, LLC,
    an accredited investor, an aggregate of 237,778 shares of common
    stock at a purchase price of $16.83 per share for an aggregate
    purchase price of $4,001,804.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    No general solicitation was made by either us or any person
    acting on our behalf in connection with the above transaction.
    The certificates for the shares of common stock that have been
    issued contain appropriate legends stating that such securities
    have not been registered under the Securities Act and may not be
    offered or sold absent registration or pursuant to an exemption
    therefrom. No underwriters were involved in the foregoing sales
    of securities. These transactions were exempt from registration
    pursuant to Section&nbsp;4(2) of the Securities Act.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    2.&nbsp;On May&nbsp;5, 2003, we issued an aggregate of 50,000
    shares of common stock to certain non-U.S. Persons and to
    certain accredited investors at a purchase price of $A10.00
    (approximately $6.56 per share), and warrants to subscribe for
    an additional 100,000 shares of common stock at an exercise
    price of $A10.00 (approximately $7.47 per share).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    No general solicitation was made by either us or any person
    acting on our behalf in connection with the above transaction.
    The certificates for the shares of common stock that have been
    issued contain appropriate legends stating that such securities
    have not been registered under the Securities Act and may not be
    offered or sold absent registration or pursuant to an exemption
    therefrom. No underwriters were involved in the foregoing sales
    of securities. These transactions were exempt from registration
    pursuant to Section&nbsp;4(2) of the Securities Act of 1933 with
    respect to the securities offered and sold to accredited
    investors or Regulation&nbsp;S promulgated under the Securities
    Act of 1933 with respect to the securities offered and sold
    outside the United States to investors who were neither citizens
    nor residents of the United States.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    3.&nbsp;In November 2004, we issued an aggregate of 90,000
    shares of common stock upon exercise of 45,000 of the warrants
    that were issued in May 2003. The shares issued upon exercise of
    the warrants are subject to transfer restrictions.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    No general solicitation was made by either us or any person
    acting on our behalf in connection with the above transaction.
    The certificates for the shares of common stock that have been
    issued contain appropriate legends stating that such securities
    have not been registered under the Securities Act and may not be
    offered or sold absent registration or pursuant to an exemption
    therefrom. No underwriters were involved in the foregoing sales
    of securities. These transactions were exempt from registration
    pursuant to Section&nbsp;4(2) of the Securities Act of 1933 with
    respect to the securities offered and sold to accredited
    investors or Regulation&nbsp;S promulgated under the Securities
    Act of 1933 with respect to the securities offered and sold
    outside the United States to investors who were neither citizens
    nor residents of the United States.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">II-2

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

<DIV align="left" style="font-size: 10pt; margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>Item&nbsp;16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Exhibits and
Financial Statement Schedules.</I></B>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="3%"></TD>
    <TD width="4%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>(a)&nbsp;</TD>
    <TD align="left">
    <I>Exhibits.</I></TD>
</TR>

</TABLE>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="center" nowrap><B>Exhibit</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 8pt;">
    <TD colspan="2" align="center" nowrap><B>Number</B></TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Exhibit</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="2" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD><TD></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>&nbsp;1.1*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Underwriting Agreement.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3.1*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Amended and Restated Certificate of Incorporation of
    Glycotex, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>3.2*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Form of Amended and Restated Bylaws of Glycotex, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4.1*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Specimen Common Stock Certificate</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4.2*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Warrant Agreement</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>4.3*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Specimen Warrant Certificate</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>5.1*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Opinion of Morgan, Lewis &#38; Bockius LLP.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated Technology License Agreement between
    Novogen Research Pty Limited and Glycotex, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated Manufacturing License and Supply Agreement
    between Glycotex, Inc. and Novogen Laboratories Pty Ltd.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10.3</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated Services Agreement among Novogen Limited
    and Glycotex, Inc.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Amended and Restated Agency Agreement between Glycotex, Inc. and
    Novogen Laboratories Pty Ltd.</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>10.5*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Equity Compensation Plan</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of BDO</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>23.2*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Consent of Morgan, Lewis &#38; Bockius LLP (contained in
    Exhibit&nbsp;5.1).</TD>
</TR>

<TR>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>24.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">
    Powers of Attorney (included on signature page).</TD>
</TR>

</TABLE>
</CENTER>

<DIV align="left" style="font-size: 3pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<DIV style="width: 18%; border-top: 1.0pt solid black; font-size: 1pt">&nbsp;</DIV>
</DIV>

<DIV style="margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top">
    <TD>*&nbsp;</TD>
    <TD align="left">
    To be filed by amendment.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 3pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(b)&nbsp;<I>Financial Statement Schedules.</I>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All financial statement schedules have been omitted either
because they are not required, are not applicable, or the
information is otherwise set forth in the financial statements
and notes thereto.
</DIV>

<DIV style="margin-top: 12pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD><B>Item&nbsp;17.</B></TD>
    <TD>
    <B><I>Undertakings</I></B></TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The undersigned registrant hereby undertakes as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(1)&nbsp;To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
</DIV>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (a)&nbsp;To include any prospectus required by Section 10(a)(3)
    of the Securities Act of 1933;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (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;</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt;">II-3
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

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

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
    (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.</TD>
</TR>

</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(2)&nbsp;That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(3)&nbsp;To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(4)&nbsp;To provide to the underwriter at the closing specified
in the Underwriting Agreement share and warrant certificates in
such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(5)&nbsp;That 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&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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
(6)&nbsp;That 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&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.
</DIV>

<P align="center" style="font-size: 10pt;">II-4

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

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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;9, 2005.
</DIV>

<DIV style="margin-top: 24pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <FONT style="font-variant:SMALL-CAPS">Glycotex, Inc.
    </FONT></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    (Registrant)</TD>
</TR>

</TABLE>

<DIV style="margin-top: 48pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;"></DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="2%"></TD>
    <TD width="58%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD>By:&nbsp;</TD>
    <TD align="center">
    /s/ <FONT style="font-variant:SMALL-CAPS">David R. Seaton
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 3pt;">

<TR>
    <TD width="40%"></TD>
    <TD width="60%"></TD>
</TR>

<TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="left">
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt" align="left">&nbsp;</DIV></TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Name:&nbsp;David R. Seaton</TD>
</TR>

<TR valign="top"  style="font-size: 10pt;">
    <TD>&nbsp;</TD>
    <TD align="left">
    Title:&nbsp;&nbsp;&nbsp;Chief Financial Officer and Secretary</TD>
</TR>

</TABLE>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">
<B>POWER OF ATTORNEY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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
(including registration statements filed pursuant to
Rule&nbsp;462(b) under the Securities Act), 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.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 0; margin-right: 0; margin-bottom: 0; color: #000000; background: #ffffff;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
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.
</DIV>

<CENTER>
<TABLE width="100%" align="center" cellspacing="0" cellpadding="0" border="0" style="font-size: 10pt; margin-top: 6pt; ">

<TR style="font-size: 1pt;">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="31%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="36%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="18%">&nbsp;</TD>
</TR>


<TR style="font-size: 8pt;">
    <TD colspan="3" align="center" nowrap><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap><B>Date</B></TD>
</TR>

<TR valign="bottom" style="font-size: 1px">
    <TD colspan="3" align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" nowrap style="border-top: 1pt solid #000000;">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Graham E. Kelly<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Prof.
    Graham E. Kelly</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    President and Chief Executive Officer, Director (Principal
    Executive Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    September&nbsp;9, 2005</TD>
</TR>

<TR>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">David R. Seaton<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>David
    R. Seaton</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chief Financial Officer and Secretary, Director (Principal
    Financial Officer and Principal Accounting Officer)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    September&nbsp;9, 2005</TD>
</TR>

<TR>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Christopher
    Naughton<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Christopher
    Naughton</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Chairman</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    September&nbsp;9, 2005</TD>
</TR>

<TR>
    <TD colspan="7">&nbsp;</TD>
</TR>

<TR>
    <TD colspan="3" align="center" valign="top">
    /s/ <FONT style="font-variant:SMALL-CAPS">Philip A. Johnston<BR>
    <DIV style="border-top: 1pt solid #000000; font-size: 1pt; margin-top: 2pt;">&nbsp;</DIV></FONT>Philip
    A. Johnston</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    Director</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">
    September&nbsp;9, 2005</TD>
</TR>

</TABLE>
</CENTER>

<P align="center" style="font-size: 10pt;">II-5
</BODY>
</HTML>
[{"type": "S-1", "sequence": "1", "filename": "y12532sv1.htm", "description": "FORM S-1", "secsgml_size_bytes": 709450}]
{"company-data": {"conformed-name": "GLYCOTEX, INC.", "cik": "0001337567", "irs-number": "300001753", "state-of-incorporation": "DE", "fiscal-year-end": "0630"}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-128212", "film-number": "051077637"}, "business-address": {"street1": "140 WICKS ROAD", "city": "NORTH RYDE NSW", "state": "C3", "zip": "06905", "phone": "(011) 61 2 9878-0088"}, "mail-address": {"street1": "140 WICKS ROAD", "city": "NORTH RYDE NSW", "state": "C3", "zip": "06905"}}
FORM S-1
Table of Contents
As filed with the Securities and Exchange Commission on
September 9, 2005
Registration Statement No.
333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Glycotex, Inc.
(Exact name of Registrant as specified in its charter)
Delaware
8731
30-0001753
(State or other jurisdiction of
incorporation or organization)
(Primary Standard Industrial
Classification Code Number)
(I.R.S. Employer
Identification No.)
Glycotex, Inc.
140 Wicks Road
North Ryde NSW 2113
Australia
(011) 61 2 8877-6177
(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)
Copies to:
David R. Seaton
Chief Financial Officer
Glycotex, Inc.
140 Wicks Road
North Ryde NSW 2113
Australia
(011) 61 2 8877-6177
Steven A. Navarro, Esq.
Owen S. Littman, Esq.
Morgan, Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
(212) 309-6000
James A. Lebovitz, Esq.
Stephen M. Leitzell, Esq.
Dechert LLP
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2793
(215) 994-4000
Approximate date of commencement of
proposed sale to the public:
As soon as practicable after the
effective date of this Registration Statement.
If any of the securities being registered on this Form are being
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act, 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,
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
Title of Each Class of
Aggregate
Amount of
Securities to be Registered
Offering Price(1)(2)
Registration Fee
Common stock units consisting of common stock and warrants
$39,000,000
$4,591
Common stock underlying units
$—
$—
Warrants underlying units
$—
$—
Common stock underlying warrants
$47,000,000
$5,532
Totals
$10,123
(1)
Estimated solely for the purpose of computing the registration
    fee pursuant to Rule 457(o) under the Securities Act.
(2)
Includes shares to be sold upon exercise of the
    underwriter's over-allotment option. See
    "Underwriting."
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 of 1933 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.
Filed Pursuant to Rule 424(b)(4)
Registration Statement No. 333-109129
SUBJECT TO COMPLETION,
DATED                     ,
2005
PROSPECTUS
Glycotex, Inc.
Common
Stock Units
This is an
initial public offering by Glycotex, Inc. We are offering common
stock units. Each common stock unit consists of:
•
one share of our common stock; and
•
one warrant to purchase one share of our common stock at an
    exercise price equal
    to          % of
    the initial public offering price.
The
estimated initial public offering price for the common stock
units is between
$         and
$          per
unit.
We are
applying to list our common stock and warrants on the Nasdaq
National Market under the symbols "GLTX" and
"GLTXW," respectively.
Upon
completion of this offering, Novogen Limited, our parent
company, will beneficially own
approximately                   %
of our outstanding common stock on a fully-diluted basis.
There will
be no trading market for the common stock units. The shares of
common stock and warrants comprising the units will separate
immediately upon completion of this offering and prior to any
trading of the common stock and warrants.
Investing
in the common stock units involves a high degree of risk. See
"Risk Factors" beginning on page 6.
Per Common
Stock Unit
Total
Initial public offering price
Discounts and commissions to underwriter
Offering proceeds to Glycotex, Inc., before expenses
We have
granted the underwriter an option to purchase up to an
additional                   common
stock units at the initial public offering price, solely to
cover over-allotments. The underwriter can exercise this right
at any time until 30 days after the offering.
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                     ,
2005.
TABLE OF CONTENTS
Page
PROSPECTUS SUMMARY
1
RISK FACTORS
6
SPECIAL NOTE REGARDING FORWARD-LOOKING
    STATEMENTS
22
USE OF PROCEEDS
23
DIVIDEND POLICY
23
CAPITALIZATION
24
DILUTION
25
SELECTED HISTORICAL FINANCIAL DATA
26
MANAGEMENT'S DISCUSSION AND ANALYSIS
    OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
27
BUSINESS
31
MANAGEMENT
47
BENEFICIAL OWNERSHIP OF COMMON STOCK
50
CERTAIN RELATIONSHIPS AND RELATED
    TRANSACTIONS
51
DESCRIPTION OF OUR SECURITIES
57
SECURITIES ELIGIBLE FOR FUTURE SALE
61
UNDERWRITING
63
LEGAL MATTERS
66
EXPERTS
66
AVAILABLE INFORMATION
66
INDEX TO FINANCIAL STATEMENTS
F-1
EX-10.1: AMENDED AND RESTATED TECHNOLOGY LICENSE AGREEMENT
EX-10.2: AMENDED AND RESTATED MANUFACTURING LICENSE AND SUPPPLY AGREEMENT
EX-10.3: AMENDED AND RESTATED SERVICES AGREEMENT
EX-10.4: AMENDED AND RESTATED AGENCY AGREEMENT
EX-23.1: CONSENT OF BDO
i
Table of Contents
PROSPECTUS SUMMARY
This summary highlights key aspects of our business and our
offering of common stock units that are described more fully
elsewhere in this prospectus. This summary does not contain all
of the information that you should consider before making an
investment decision. You should read the entire prospectus
carefully, including the Risk Factors section beginning on
page 6 and our financial statements and related notes
beginning on page F-1, before making an investment decision.
References to "we," "us," or
"our" refer to Glycotex, Inc. References to
"Novogen" refer to Novogen Limited and its
consolidated subsidiaries, other than Glycotex, Inc. References
to values in "dollars" or "$" denote
U.S. dollars and values in "$A" indicate
Australian dollars.
Our Company
We are a clinical stage biopharmaceutical company focused on
discovering and developing a novel class of drugs for human
wound healing and tissue repair. Our proprietary technology is
based on the carbohydrate
(1
®
3)(1
®
6)-
b
-glucan.
This molecule binds to a specific class of receptors, known as
glucan receptors, that are expressed on the critical cells
involved in the innate healing cascade. After binding occurs,
cell signalling triggers the release of a variety of cytokines
and growth factors that initiate the healing process. We believe
our glucan technology can be employed to develop a family of
products that promote and accelerate human wound healing and
tissue repair across a broad range of medical and surgical
applications, including chronic wound care, acute wound care and
tissue inflammation. Our lead product candidate, MG3601, targets
the chronic wound care market, specifically the treatment of
skin ulcers, known as trophic ulcers. Since more than
4 million Americans suffer from chronic, non-healing wounds
each year, we believe this market represents a large area of
unmet medical need. We completed a Phase II clinical trial
of MG3601 in March 2005. The results of that trial demonstrated
that MG3601 provided a statistically significant rate of
improved wound closure in comparison to placebo. We intend to
initiate a Phase III clinical trial for MG3601 in 2006.
A key component of our proprietary technology is an
understanding of the structure-function relationship of the
(1
®
3)(1
®
6)-
b
-glucan
molecule. In particular, we have developed significant expertise
with respect to engineering the optimal forms of glucan
molecular structure to support commercial development of our
product candidates while maintaining clinical efficacy. We
believe our technology can more fully restore wound healing by
activating the critical cells involved in the healing process.
These critical cells include macrophages, which initiate the
healing cascade, fibroblasts, which initiate the necessary
collagen matrix formation, vascular endothelial cells, which
promote angiogenesis (blood vessel formation), epithelial cells,
which contribute to skin closure, and neutrophils (white blood
cells), which contribute to infection control. To date, we have
developed two active compounds known as Glucoprime and Glucocol.
Glucoprime has been engineered as the active ingredient for
therapeutic indications utilizing topical application. Glucocol
has been engineered for intra-body therapies including the
treatment of tendons, ligaments, joints and bones.
MG3601, containing Glucoprime as its active ingredient, is an
aseptic topical product for the treatment of trophic ulcers.
Trophic ulcers are associated with venous insufficiency,
arterial insufficiency, diabetes or pressure. These are often
deep or large wounds that are prone to serious infection and
further complications due to the extent of tissue damage or the
compromised state of the patient's health. These wounds are
often difficult, or in the worst cases, impossible to heal
quickly and successfully with conventional products. In severe
cases, sepsis can result, which may lead to amputation and in
some cases death. We have completed a Phase II clinical
study of MG3601 in patients with chronic trophic ulcers,
specifically deep venous stasis ulcers of the legs. The trial
was conducted in Australia and involved 60 patients.
Patients were randomized either to a placebo arm or to low-dose
(0.1% Glucoprime) or high-dose (1.0% Glucoprime) arm. The trial
was double-blinded, which means that neither the patient nor the
person administering the treatment knew whether the placebo or a
Glucoprime product was being administered. MG3601 was assessed
for its effects on both the rate of wound closure and the degree
of healing. In July 2005, we released the results of this
Phase II clinical trial. Both active arms achieved a
1
Table of Contents
statistically significant rate of improved wound closure
compared to the placebo arm, with closure rates more than
2.8 times that of the placebo.
Our second product candidate, JSD114, containing Glucocol as its
active ingredient, is being developed to accelerate healing of
surgical incisions that are at risk of dehiscence, or wound
breakdown. These wounds are typically associated with major
surgery where there is extensive tissue removal or the
occurrence of lymphedema following the removal of lymph nodes.
Closure of these wounds can present major difficulty and may
require extended hospitalization, which makes this an area of
significant unmet medical need in the field of surgical practice.
We were incorporated in May 1999 as a wholly-owned subsidiary of
Novogen Limited, an Australian registered company, and commenced
operations in May 2003.
Our Strategy
Our business plan is to continue to develop new product
candidates based on our proprietary glucan technology
specifically engineered for therapeutic applications in large
areas of unmet medical need. Our immediate priority is to submit
an investigational new drug application, or IND, to the FDA for
MG3601 and to conduct a Phase III clinical trial in the
United States using MG3601 for the treatment of venous stasis
ulcers. Additionally, we intend to continue pre-clinical
development of JSD114 and advance that product candidate into
human clinical trials. We also intend to use our glucan
technology to develop product candidates for intra-operative and
injection applications in tendon, ligament and bone surgeries
and injuries.
Our Relationship with Novogen
From its inception in 1994, Novogen has focused its research and
development efforts in the glucan and phenolic drugs areas.
Given the distinctiveness of the two technologies, plus the
increasing focus of Novogen on its phenolic drug technology
platform, Novogen has decided to segregate the two technologies
into separate businesses, and in so doing, provide greater
strategic focus on the development of the glucan technology
platform. Novogen currently owns approximately 84.3% of our
outstanding common stock, and, upon completion of this offering,
will own approximately      % of our
common stock on a fully-diluted basis.
Novogen has granted to us, pursuant to an amended and restated
technology license agreement, an exclusive, worldwide,
non-transferable license to use and exploit the glucan
technology, which includes glucan patent rights, know-how and
any developments in relation to the patent rights and know-how,
solely in the fields of:
•
therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous stasis ulcers, diabetic ulcers and
    burns in humans;
•
treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;
•
prevention and treatment of ultraviolet light induced skin
    damage in humans;
•
treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;
•
joint repair, particularly with artificial joints in
    humans; and
•
treatment of poorly healing surgically dissected or transected
    tissue in humans.
In addition to the amended and restated technology license
agreement, we have entered into an amended and restated
manufacturing license and supply agreement, an amended and
restated services agreement, and an amended and restated agency
agreement with Novogen.
2
Table of Contents
Market Opportunity
The markets for human wound healing and tissue repair products
are large and growing. Initially, we plan to address the market
for chronic wound care with our lead product candidate, MG3601,
for the treatment of trophic ulcers. Trophic ulcers, in
particular venous stasis ulcers, are characteristically
difficult and slow to heal, often requiring care over periods of
several months to as long as many years. In severe cases
amputation is the only surgical intervention available to treat
these ulcers, in particular, those stemming from arterial
insufficiency associated with diabetes. Trophic ulcers primarily
occur in patients that are past middle age and represent a
significant community health problem. For example, according to
the wound care trade publication,
Advances in Skin &
Wound Care,
the estimated per-episode cost of care for
venous stasis ulcers can exceed $40,000. To further illustrate
the importance of this market, the Centers for Disease Control
and Prevention, or CDC, estimates that approximately 85% of
lower extremity amputations in diabetic patients in the United
States are preceded by a foot ulcer. We believe that there is a
large unmet medical need for human wound healing and tissue
repair products such as MG3601 that have the potential to
accelerate the wound healing process significantly.
Business Communications Company, Inc., an industry research
group, estimates that the global advanced wound care market
totaled $2.0 billion in 2004 and is expected to reach
$2.8 billion by 2008. Business Communications further
estimates that the chronic wound market segment accounts for the
largest portion of revenues in the advanced wound care market
with 42% of the market and estimated revenues of
$722 million in 2003. According to the National Institutes
of Health Clinical Center, each year more than 4 million
Americans suffer from chronic non-healing wounds. We believe a
number of significant market trends will continue to expand the
market including the aging of the general population, increasing
rates of obesity, heightened interest in advanced dressings,
increased pressure by hospitals and healthcare providers to
discharge patients earlier and growth in the incidence and
prevalence of diabetes.
Risks of Our Business
We have a limited operating history and since our inception we
have incurred losses, including net losses of $363,000 and
$141,000 for the years ended June 30, 2005 and
June 30, 2004, respectively. Since our inception through
June 30, 2005, we have sustained cumulative net losses of
$510,000. We anticipate that we will incur operating losses and
negative cash flow for the foreseeable future. To date we have
not commercialized any products and cannot be sure that we will
ever be able to do so, or that we may ever become profitable. We
currently have only one product candidate in clinical trials and
if we are unable to successfully develop and commercialize that
product candidate or develop other viable product candidates
using our glucan technology, including JSD114, our ability to
sustain future operations will be diminished. We have not yet
submitted an IND for MG3601, and we do not know whether or when
an IND for this product candidate will become effective. We have
not received marketing approval to commercialize MG3601 or other
product candidates, and therefore we have not generated revenues
from the distribution and sale of any product candidates.
Clinical trials have a high risk of failure and any failure
could impair the commercial prospects for our product
candidates. Furthermore, because we currently depend on Novogen
for our personnel and our supply of glucan, any failure by
Novogen to meet our staffing needs or to supply sufficient
quantities of glucan may hinder our operations and prospects for
growth. Additionally, we may require assistance from Novogen to
protect the intellectual property rights related to our glucan
technology.
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 8877-6177.
Glucoprime
tm
and
Glucocol
tm
are trademarks of Novogen and are exclusively licensed to us.
Other service marks, trademarks and trade names referred to in
this prospectus, such as Regranex and Vacuum-Assisted Closure
system, are the property of their respective owners.
3
Table of Contents
This Offering
Securities Offered
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       years from their date
    of issuance. The expiration date may not be extended without an
    amendment to the warrant agreement by us and the warrant agent.
    We do not have the right to call or otherwise redeem the
    warrants.
Over-allotment Option
We have granted Janney Montgomery Scott LLC an option to
    purchase additional common stock units representing up to 15% of
    the units sold in this offering to cover over-allotments, if any.
Common Stock to be Outstanding After this Offering
shares
    (                    shares
    if the underwriter's over-allotment option is exercised in
    full) not including the shares
    (                    shares
    if the over-allotment option is exercised in full) of common
    stock underlying the warrants offered hereby.
Use of Proceeds
We intend to use the net proceeds of this offering to conduct a
    Phase III clinical trial in the United States for MG3601, for
    salary and other staff costs, and to expand our research and
    product development program. The remainder of the net proceeds
    will be used for leasing office and manufacturing facilities and
    for general corporate purposes, including payments to Novogen
    under the terms of our agreements with them. See "Use of
    Proceeds."
Proposed Nasdaq Symbol
GLTX — common stock
GLTXW — warrants
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 investing in our common stock units.
The number of shares of our common stock to be outstanding
immediately after this offering is based on the number of shares
outstanding as
of                               ,
2005. The number does not
include                     shares
of common stock reserved for issuance upon exercise of options
that may be granted subsequent
to                               ,
2005 under our Equity Compensation Plan.
Except as otherwise indicated, all information in this
prospectus assumes:
•
no exercise of the underwriter's over-allotment option; and
•
the sale
    of                               common
    stock units at an assumed initial public offering price of
    $          per
    unit, the midpoint of the range set forth on the cover page of
    this prospectus.
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Summary Historical Financial Data
We are a development stage company. The following table sets
forth our summary historical financial data derived from our
audited financial statements for the years ended June 30,
2005, June 30, 2004, and June 30, 2003 included in
this prospectus. The financial statements for the years ended
June 30, 2005, June 30, 2004, and June 30, 2003
have been audited by BDO, independent Registered Public
Accounting Firm. 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 financial statements and the
notes thereto included elsewhere in this prospectus.
Period from
May 5, 1999
(Inception)
through
Year Ended June 30,
June 30,
2005
2004
2003
2005
(In thousands, except share and per share data)
Statement of Operations Data:
Net loss arising during development stage
$
(363
)
$
(141
)
$
—
$
(510
)
Net loss per common share
$
(0.17
)
$
(0.07
)
$
—
Weighted average number of shares used to calculate loss per
    share
2,151,103
2,050,000
2,000,073
Common stock outstanding at period end
2,377,778
2,050,000
2,050,000
Year Ended
June 30,
2005
2004
(In thousands)
Balance Sheet Data:
Cash and cash equivalents
$
4,606
$
240
Total assets
4,606
240
Stockholders' equity
4,492
181
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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 and warrants
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 May
1999, we have only been in operation since May 2003. During May
2003, we raised $A500,000 (approximately $328,000) in a private
placement of shares of common stock and warrants, and in
November 2004 we received a further $A900,000 (approximately
$672,000) upon exercise of the warrants that were issued in
connection with the May 2003 private placement. In addition, in
April 2005 we raised an additional $4.0 million in a
private placement of shares of our common stock. We have
incurred net losses since our inception, including net losses of
$363,000 and $141,000 for the years ended June 30, 2005 and
June 30, 2004, respectively. We anticipate that we will
incur operating losses and negative cash flows 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, expand our research and development program
significantly and invest in capital expenditures, which will
result in increasing losses, and we may continue to incur
substantial losses even if we begin to generate revenues from
the distribution and sale of products using our glucan
technology.
If we are unable to successfully develop and commercialize
    MG3601, JSD114 or other product candidates we develop using our
    glucan technology, our ability to sustain future operations will
    be significantly diminished.
We have developed two active ingredients, Glucoprime and
Glucocol, using our glucan technology and are currently
developing MG3601, which contains Glucoprime as its active
ingredient, and JSD114, which contains Glucocol as its active
ingredient. We can provide no assurance that MG3601, JSD114 or
other product candidates we develop using our glucan technology
will be commercially successful. Although we have rights to
develop other related compounds discovered and developed by
Novogen under the terms of our technology license agreement with
Novogen, our rights under our technology license agreement with
Novogen are limited to the worldwide commercialization of
product candidates developed using our glucan technology solely
in the fields specified in the technology license agreement. If
we are unable to successfully develop and commercialize our
products using our glucan technology, we may be required to
cease or reduce our operations.
We will need to raise additional funds to commercialize
    MG3601, JSD114 and other product candidates we develop, and the
    actual amount of funds we will need will be determined by 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 commence and
complete a Phase III pivotal clinical trial in the United States
relating to the use of MG3601 to treat venous stasis ulcers. We
will require additional funds, however, to pursue the
commercialization of MG3601, JSD114 and any product candidate we
develop using our glucan technology.
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 our research activities;
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•
the number and scope of our research programs;
•
the progress of our 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;
•
the costs involved in enforcing or defending patent claims and
    other intellectual property rights;
•
the costs and timing of marketing approvals; and
•
our ability to enter into strategic marketing alliances.
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.
Because the MG3601 and JSD114 product candidates we are
    developing and other product candidates we intend to develop are
    based on new technologies, the market may not be
    receptive.
The commercial success of any product candidates we develop, if
approved for marketing, will depend upon their acceptance by the
medical community and private and government third-party payors
as clinically useful, cost-effective and safe. The product
candidates we are developing are based upon new
carbohydrate-based drug technologies. As a result, it may be
more difficult for us to achieve market and third-party payor
acceptance of our products, particularly the first products that
we introduce to the market. Our efforts to educate the medical
and third-party payor communities on these potentially unique
approaches may require greater resources than would be typically
required for products based on conventional technologies. The
safety, efficacy, convenience and cost-effectiveness of our
products as compared to competitive products will also affect
market acceptance.
We have not yet submitted an investigational new drug
    application (IND) with the FDA for MG3601 and until an IND
    becomes effective, we will not be able to perform human clinical
    trials in the United States using our MG3601 product
    candidate.
Although we have conducted Phase I and Phase II clinical trials
of MG3601 in Australia, we have not yet submitted an IND with
the FDA. Until an IND becomes effective, we will not be able to
perform human clinical trials of our MG3601 product candidate in
the United States and it may be more difficult for us to obtain
the marketing approval necessary to sell MG3601 in the United
States. With an IND, we will benefit from FDA review and comment
on the protocol, which may improve the quality and acceptability
of data included in the submission for marketing approval.
Approval to begin clinical testing in the United States requires
submission of adequate information on the safety and
manufacturing of MG3601 to assure the proper quality, purity,
and strength of the investigational product, the proposed
protocol for any planned clinical study, and a brief description
of the overall plan for investigating the product. Although we
are in the process of preparing an IND to be submitted to the
FDA, we do not know whether or when the IND will become
effective.
Any failure in our clinical trials could impair the
    commercial prospects for MG3601.
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. While we have not had any material delays in
our clinical testing program, 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 MG3601 or other product
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candidates we develop using our glucan technology may be
impaired and we may be required to cease or reduce our
operations.
If we do not receive marketing approval for product
    candidates we develop, or such approval is withdrawn, we will
    not be able to commercialize our products.
We need marketing approval from the FDA to commercialize MG3601,
JSD114 or other product candidates we develop in the United
States. We will also need marketing approval from the regulatory
authorities in any other country in which we intend to
commercialize our glucan product candidates. It may be difficult
to obtain marketing approval for this novel technology, and we
may never receive marketing approval, or if we do receive
marketing approval, it will be limited to those wound healing
states and conditions for which our product candidates have been
proven to be safe and effective. Marketing approval, if granted,
can be withdrawn for failure to comply with regulatory
requirements or upon the occurrence of adverse events following
commercial introduction. If we cannot commercialize our product
candidates, we may be required to cease or reduce our
operations. We cannot assure you that we will not encounter
delays, difficulties or adverse events in the regulatory process
in the future.
Our ability to achieve profitability is dependent on a
    number of factors, many of which are beyond our control.
Our ability to achieve profitability is dependent on a number of
factors including:
•
completing our clinical trial program and receiving marketing
    approval. Clinical testing is a prerequisite to the receipt of
    the marketing approval necessary to commercialize MG3601, JSD114
    or other product candidates we develop using our glucan
    technology. We must demonstrate the safety and effectiveness of
    our product candidates to the satisfaction of regulatory
    authorities to obtain marketing approval. We cannot control the
    outcome of our testing program or whether we receive marketing
    approval. We will not be able to generate sales revenues until
    we receive marketing approval.
•
establishing strategic partnerships to market and sell the
    active ingredients, Glucoprime or Glucocol, or the finished
    formulated products. Our negotiating position with potential
    strategic partners will be affected by the success of our
    clinical program. If we are unable to attract partners and
    negotiate favorable terms, we may have difficulty generating
    revenues from commercialization of our glucan product candidates.
•
maintaining a low cost operation and scalable supply of our
    product candidates in order to meet the demands of the
    commercial market. Although we plan to build our own
    manufacturing facility, until we are able to do so we will need
    to source our product requirements from Novogen.
•
our ability to commercialize new compounds based on our glucan
    technology. Under the terms of our technology license agreement
    with Novogen, we are entitled to commercialize and develop other
    product candidates using our glucan technology in the fields
    that have been licensed to us. If we decide to develop other
    product candidates based on our glucan technology, our success
    may depend on controlling the costs of developing such new
    compounds. The cost to develop these compounds is unpredictable,
    and dependent upon many factors, which are difficult to control.
Because our glucan technology may require development of
    novel manufacturing processes, we may not be able to demonstrate
    to the satisfaction of regulatory authorities that our
    manufacturing and quality controls are adequate for marketing
    approval.
To obtain marketing approval, we will be required to demonstrate
to the satisfaction of regulatory authorities that our
manufacturing and quality controls are adequate. Although we
intend to construct a pilot-scale manufacturing plant to produce
clinical trial quantities of our product candidates, until we
are able to do so we will depend on Novogen to satisfy the
regulatory authorities since we currently rely on Novogen to
manufacture our glucan product candidates. The product
candidates we are developing are
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based upon new technology, and may require novel manufacturing
processes. In addition to submitting information on the
physicochemical properties of the active ingredients we have
developed, we will be required to demonstrate the adequacy of
our physicochemical characterization studies, quality controls
for identity, purity and potency, stability studies, sterility
assays, and formulation. If this chemistry, manufacturing, and
controls information is not satisfactory, we will not receive
marketing approval for MG3601, JSD114 or other product
candidates we develop using our glucan technology.
We currently have no control over the costs of
    manufacturing our glucan product candidates and increases in
    these costs would increase the costs of conducting clinical
    trials and could adversely affect future profitability if these
    costs increase significantly.
We intend to use a portion of the net proceeds of this offering
for capital expenditures on laboratory equipment and a
pilot-scale manufacturing plant in order to produce clinical
trial quantities of our glucan product candidates and on
manufacturing equipment in order to produce commercial
quantities of our glucan product candidates. However, we
currently do not manufacture our glucan product candidates and
we will be relying on Novogen for supplies of our glucan product
candidates for clinical trials. Glucoprime, Glucocol and other
forms of glucan are supplied to us in their primary manufactured
form by Novogen under our manufacturing license and supply
agreement with Novogen. The cost of manufacturing the glucan is
charged to us on a cost-plus markup basis. Once we construct our
own pilot-scale manufacturing plant, we intend to exercise our
right under the manufacturing license and supply agreement to
terminate that agreement by paying Novogen a termination fee of
$250,000. In the event we elect to terminate the manufacturing
license and supply agreement, the royalty we pay to Novogen
under the technology license agreement will increase from 2% to
4%. See "Certain Relationships on Related
Transactions — The Amended and Restated Technology
License Agreement — Fees, Charges and Costs" for
more information. Until we terminate the agreement, we will have
no control over the costs of manufacturing these products. If
the costs of manufacturing these products increases or if the
cost of the materials used to make these products increases,
these costs will be passed on to us by Novogen, making the cost
of conducting clinical trials more expensive. Once we are able
to commercialize our glucan product candidates, increases in
manufacturing costs could adversely affect our future
profitability if we are unable to pass all of the increased
costs along to our customers.
If Novogen materially and persistently fails to supply us with
the quantities of the glucan product candidates ordered by us by
the required date, the manufacturing license and supply
agreement permits us to contract with third party manufacturers
for the production and supply of these glucan product
candidates. Any third party manufacturer would have to satisfy
the FDA's current Good Manufacturing Practices, or cGMP,
and would have to meet our quality assurance standards. Although
we have the right under the manufacturing license and supply
agreement to at any time give a third party the information and
assistance necessary for that third party to develop a
capability to manufacture and supply us with the quantity of our
glucan product candidates required by us that exceeds the
quantity Novogen is able to supply us, it may be difficult to
negotiate acceptable terms of production with any third party
manufacturer.
We intend to manufacture commercial quantities of MG3601,
    JSD114 or other product candidates we develop using our glucan
    technology. If we are unable to do so, it may be difficult to
    secure an alternative source.
The manufacturing process for MG3601, JSD114 or other product
candidates we develop using our glucan technology has not been
tested in the quantities needed for commercial sales. As a
result, we may not be able to manufacture the necessary
quantities in a timely manner. In addition, in order for us to
manufacture or have manufactured commercial quantities of our
product candidates using our glucan technology, we will need to
build a new manufacturing plant which would be a scaled-up
version of the current pilot plant used by Novogen and of the
pilot-scale plant that we intend to build using a portion of the
net proceeds of this offering. If the plant proves difficult to
scale up or requires significant redesign, our ability to
commercialize our product candidates using our glucan technology
could be delayed. Any larger
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manufacturing plant built by us will also have to comply with
the FDA's cGMP. Also, we will require significant capital
to build the plant. Even though we intend to use a portion of
the net proceeds of this offering for capital expenditures on
manufacturing equipment, we may require further capital to
complete a new plant capable of producing commercial quantities
of our product candidates. If required, such additional capital
may not be available to us on favorable terms, if at all.
Our commercial opportunity will be reduced or eliminated
    if competitors develop and market products that are more
    effective or are less expensive than our products.
The human wound healing and tissue repair industry is
competitive. A number of other companies have products, medical
devices or drug candidates in various stages of pre-clinical or
clinical development that are intended for the same therapeutic
indications for which MG3601 and JSD114 are being developed.
Some of these competing therapeutic treatments have already been
commercialized. Other potential competing drugs and treatments
are further advanced in development than MG3601 and JSD114 and
may be commercialized sooner. Even if we are successful in
developing an effective product, neither MG3601 nor JSD114 may
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. Competitive products include
devices, such as methods of increasing blood flow and oxygen
tension, drugs, and biologicals, such as growth factors. We have
not conducted comparative tests to evaluate the relative
efficacy and safety of these methods versus our product
candidates. Products such as Regranex from Johnson & Johnson
and Kinetic Concepts' Vacuum-Assisted Closure system are
two examples of competing products that are being actively
promoted in the wound healing market for topical application.
While we believe, based on current clinical practice, that a
substantial need remains in medical and surgical practices for
products that have the ability to promote tissue repair in an
effective and safe manner, we are unable to assess the potential
of competitive product that we are aware of being developed to
meet this need to be either ahead of or better than our
glucan-based product candidates.
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
Novogen, our services provider, to recruit qualified personnel,
and with us to recruit qualified personnel and to attract
partners for joint ventures and to 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 product candidates obsolete or
non-competitive.
We may not be able to engage investigators and research
    institutions capable of conducting our clinical trials.
We rely on investigators and research institutions, of which
there are many, to conduct our clinical trials. While we have
not previously experienced problems with third parties upon whom
we rely for research or clinical trials, our reliance upon
research institutions, including hospitals and health care
clinics, provides us with less control over the timing and cost
of clinical trials and the ability to recruit patients than if
we had conducted the trials on our own. Furthermore, there is a
greater likelihood that disputes may arise with these research
institutions over the ownership of intellectual property
discovered during the clinical trials. If we are unable to reach
agreement with investigators and research institutions capable
of conducting our clinical trials on acceptable terms, or if any
resulting agreement is terminated and we are unable to quickly
replace the applicable investigator or investigational site with
another qualified investigator or site on acceptable terms, the
research could be delayed and we may be unable to complete
development, or commercialize MG3601, JSD114 or other product
candidates we develop using our glucan technology, which will
adversely affect our ability to generate operating revenues.
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We may not be able to establish the strategic partnerships
    necessary to market and distribute our glucan product
    candidates.
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 our glucan
product candidates. We have not yet established any strategic
partnerships. Potential partners may not wish to enter into
agreements with us due to Novogen's current equity position
as our majority stockholder or our agreements with Novogen,
which agreements may include terms and provisions that these
partners are unwilling to accept. Similarly, potential partners
may be discouraged by our limited operating history.
Additionally, our relative attractiveness to potential partners
and consequently, our ability to negotiate acceptable terms in
any partnership agreement will be affected by the results of our
clinical program. For example, if MG3601 is shown to have high
efficacy in repairing a broad range of ulcers, we may generate
greater interest from potential partners than if MG3601 is
demonstrated to be less effective or applicable to a narrower
range of uses. There is no assurance that we will be able to
negotiate commercially acceptable licensing or other agreements
for the future exploitation of MG3601, JSD114 or other product
candidates we develop using our glucan technology, including the
continued clinical development, manufacture or marketing of our
glucan product candidates. 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 our glucan product candidates,
which will adversely affect our ability to generate operating
revenues.
We face a risk of product liability claims that could
    result in significant costs and may not be able to obtain
    adequate insurance.
Our business exposes us to the risk of product liability claims.
This risk is inherent in the manufacturing, testing and
marketing of human therapeutic products, including the risk that:
•
our proposed product candidates cause some undesirable side
    effects or injury during clinical trials;
•
our products cause undesirable side effects or injury when
    marketed; or
•
third parties that we have agreed to indemnify incur a related
    liability.
We have product liability insurance coverage of up to
approximately $14 million. Although we believe that this
amount of insurance coverage is appropriate for our business at
this time, it is subject to deductibles and coverage
limitations, and the market for such insurance is becoming more
restrictive. We may not be able to obtain or maintain adequate
protection against potential liabilities. If we are unable to
sufficiently insure against potential product liability claims,
we will be exposed to significant liabilities, which may
materially and adversely affect our business development and
commercialization efforts.
Once we build our own manufacturing facilities, we may be
    liable for contamination or other harm caused by materials that
    we handle, and changes in environmental regulations could cause
    us to incur additional expense.
We intend to use some of the proceeds of this offering to build
our own manufacturing plant to produce our glucan product
candidates. Once we do so, our research and development
processes will involve the handling of potentially harmful
biological materials as well as hazardous materials. Once our
manufacturing facilities are built, we will be subject to
federal, state and local laws and regulations governing the use,
handling, storage and disposal of hazardous and biological
materials and we will incur expenses relating to compliance with
these laws and regulations. If violations of environmental,
health and safety laws occur, we could be held liable for
damages, penalties and costs related to remedial actions. These
expenses could have a significant negative impact on our
financial condition. In addition, there is always the
possibility we may violate environmental, health and safety laws
in the future as a result of human error, equipment failure or
other causes. Environmental laws could also become more
stringent over time, imposing greater compliance costs and
increasing risks and penalties associated with violations.
Changes to or restrictions on permitting requirements or
processes, hazardous or biological material storage
11
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or handling might require an unplanned capital investment or
relocation. Our ultimate failure to comply with laws or
regulations could harm our business, financial condition and
results of operations.
The enforcement of civil liabilities against some of our
    officers and directors may be difficult.
Some 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 these officers and directors or to enforce judgments
obtained against these officers and directors or us in United
States courts.
Novogen is in the process of strengthening its internal
    control over financial reporting.
Under the terms of our services agreement with Novogen, Novogen
will perform our accounting and financial reporting functions.
Novogen performs this function for some of its other
subsidiaries. Novogen determined in 2004 that the personnel and
management of Novogen who perform these functions were not
sufficiently expert in U.S. GAAP and the requirements of the
Securities and Exchange Commission and the Public Company
Accounting Oversight Board, and that this lack of expertise
represented a material weakness in the operation of its internal
control over financial reporting. In addition, Novogen also
determined that its system of financial reporting was not
designed to prepare financial statements in accordance with U.S.
GAAP. Novogen's system of internal control, in particular
its processes to review and analyze elements of the financial
statement close process and to prepare financial statements in
accordance with U.S. GAAP, had not reduced to a relatively low
level the risk that errors in amounts that would be material in
relation to those financial statements might occur and might not
be detected within a timely period by management in the normal
course of business.
While Novogen has undertaken a re-evaluation of its internal
controls and procedures and has implemented enhancements to
improve them, additional measures may be required in the future
to further enhance their internal controls and procedures.
We are exposed to certain potential risks from recent
    legislation requiring companies to evaluate their internal
    control over financial reporting under Section 404 of the
    Sarbanes-Oxley Act of 2002.
We will be required under Section 404 of the Sarbanes-Oxley
Act of 2002 to evaluate our internal controls systems in order
to allow management to report on the effectiveness of our
internal control over financial reporting and our registered
independent public accounting firm to attest to this report. We
intend to perform the system and process evaluation and testing,
and implement any necessary remediation required in an effort to
comply with the management reporting and public accounting firm
attestation requirements and expect to incur significant
expenses and devote significant management time towards
completing actions required for management's evaluation.
The evaluation and attestation processes required by
Section 404 are relatively new and public companies and
public accounting firms are still developing experience in
testing and complying with these requirements. While we intend
to develop and implement plans to fully implement the
requirements relating to internal controls and all other aspects
of Section 404 as required by applicable law, we cannot be
certain as to the timing of completion of our evaluation,
testing and remediation actions or the impact of the same on our
operations since, like other public companies, we will undergo
the process for the first time in a regulatory environment where
the standards to assess adequacy of compliance are under
development. We cannot assure you that there may not be
significant deficiencies or material weaknesses that would be
required to be reported as a result of this process.
Our revenue is affected by fluctuations in currency
    exchange rates.
A portion of our expenditures and potential revenue will be
spent or derived outside of the United States. As a result,
fluctuations between the U.S. 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
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transactions to protect against uncertainty in future exchange
rates between particular foreign currencies and the U.S. dollar.
Our certificate of incorporation, our bylaws, Delaware law
    and our agreements with Novogen contain provisions that could
    discourage another company from acquiring us and may prevent
    attempts by our stockholders to replace or remove our current
    management.
Provisions of Delaware law, our certificate of incorporation and
our bylaws may discourage, delay or prevent a merger or
acquisition that stockholders may consider favorable, including
transactions in which you would receive a premium for your
shares. In addition, these provisions may frustrate or prevent
any attempts by our stockholders to replace or remove our
current management by making it more difficult for stockholders
to replace or remove our board of directors. These provisions
include authorizing the issuance of "blank check"
preferred stock with rights potentially senior to those of our
common stock without any vote or action by the holders of our
common stock and providing for a classified board of directors
with staggered terms.
Each of our agreements with Novogen may be terminated
immediately by Novogen in the event that we undergo a change in
control without the consent of Novogen. A "change in
control" means the acquisition by a person or group other
than Novogen of more than 50% of the combined voting power of
the then outstanding securities entitled to vote generally in
the election of our directors or any merger, consolidation,
reorganization, capitalization, tender or exchange offer or any
other transaction with or effecting us as a result of which a
person or group other than our stockholders immediately before
the transaction owns after the transaction more than 50% of the
combined voting power of the then outstanding securities
entitled to vote generally in election of our directors. A
change in control does not include any acquisition as a result
of, or transaction involving, an initial public offering of our
common stock. Each of these agreements may also be terminated if
we become the subject of certain bankruptcy proceedings.
These provisions would make it difficult for a third party to
acquire us, even if such transaction would be beneficial to our
stockholders.
Risks Related to Our Relationship with Novogen
Our glucan technology is fundamental to our business and
    is subject to the terms and conditions of agreements we have
    entered into with Novogen. Under these agreements our rights may
    be terminated under certain circumstances, some of which may be
    beyond our control. The loss of these rights will likely cause
    us to cease operations.
We have licensed our glucan technology from Novogen. Novogen has
granted us an exclusive, worldwide, non-transferable license to
use and exploit the glucan technology, which includes glucan
patent rights, know-how and any developments in relation to the
patent rights and know-how, solely in the fields of:
•
therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;
•
treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;
•
prevention and treatment of ultraviolet light induced skin
    damage in humans;
•
treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;
•
joint repair, particularly with artificial joints in humans; and
•
treatment of poorly healing surgically dissected or transected
    tissue in humans.
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The rights granted to us under the technology license agreement
and the manufacturing license and supply agreement with Novogen
are fundamental to our business. If we fail to meet our
obligations under our technology license agreement, agency
agreement, manufacturing license and supply agreement or
services agreement with Novogen, any or all of these agreements
may be terminated by Novogen and we could lose our rights to
develop glucan product candidates. Any loss of the rights under
any of these agreements will likely cause us to cease
operations. See "Certain Relationships and Related
Transactions" for a description of our principal
obligations under our agreements with Novogen. As of the date of
this prospectus, we have no reason to believe that we will be
unable to satisfy our obligations under these agreements.
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 or our other stockholders'
    interests.
Upon completion of this offering, Novogen will beneficially own
approximately           %
of our outstanding shares of common stock on a fully-diluted
basis. 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.
Our success depends in part on recruiting and retaining
    personnel and we are currently dependent on key personnel whose
    services are provided to us by Novogen under our services
    agreement. If we are not able to procure these services in the
    future, the strategic direction of the clinical development
    program would be disrupted, causing a delay in our
    commercialization program.
Our success depends on our continued ability to attract, retain
and motivate highly qualified management, clinical and
scientific personnel. We currently have no employees and we rely
on Novogen to provide or procure staff and perform other
financial and administrative services under our services
agreement with Novogen. Two of these employees, Professor Graham
Kelly, one of our executive directors, and Mr. Christopher
Naughton, our Chairman, provide us with the strategic direction
for the clinical development of our glucan product candidates.
Although Novogen has entered into employment agreements for each
of these persons, we do not maintain any key man life insurance
policies for them. If we lose the services of our key Novogen
personnel and if we are unable to secure new personnel, our
ability to develop glucan product candidates could be materially
impaired. In particular, because Professor Kelly developed
the glucan technology that we have licensed from Novogen, the
loss of his services would significantly affect our ability to
direct the research and development efforts for our product
candidates. While we intend to hire our own management personnel
to oversee the expansion of our operations to the United States,
we cannot assure you that we will successfully locate, hire,
assimilate and retain qualified key management personnel to
supplement or take the place of Novogen personnel who provide
services to us under the services agreement. If we are unable to
secure the ongoing services of key personnel, the
commercialization program for MG3601, JSD114 and other product
candidates we develop using our glucan technology will be
disrupted and will cause delays in obtaining marketing approval.
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The ongoing criminal investigation involving Professor
    Kelly, our President and Chief Executive Officer, could have a
    material adverse effect on our business or cause our stock price
    to decline.
Professor Kelly is one of a number of individuals who, and whose
associated entities and advisors, have been the subject of
investigations by certain Australian authorities relative to
their alleged involvement in the evasion of Australian tax,
fraud and money laundering. Professor Kelly has informed us that
he does not believe that he has committed any wrongdoing and
denies that he has been involved in any wrongdoing.
Nevertheless, Professor Kelly may need to allocate time and
resources to deal with the investigation. Additionally, if the
Australian authorities were to decide to prosecute Professor
Kelly upon concluding their investigation and if such
prosecution were to result in a conviction, Professor Kelly may
be barred from acting as an officer or director and may become
unavailable to us. Any publicity related to this investigation
or the potential prosecution or conviction of Professor Kelly
could have a material adverse effect on our business or cause
our stock price to decline.
All of our directors are officers and/or directors of
    Novogen and other Novogen subsidiaries, which may create a
    conflict of interest as well as prevent them from devoting their
    full attention to us.
All of our board members, including our Chairman, currently
serve as board members or officers of Novogen. Simultaneous
service as a Novogen director or officer can create, or appear
to create, a conflict of interest when such directors are
presented with decisions that could have different implications
for us and Novogen. In addition, Professor Kelly is the chairman
and a director of Marshall Edwards, Inc., a U.S. public company
and a subsidiary of Novogen, Mr. Naughton is the president,
chief executive officer and a director of Marshall Edwards and
Mr. Seaton is the chief financial officer and secretary of
Marshall Edwards. Their responsibilities to Novogen and Marshall
Edwards prevent them from devoting their full attention to us,
which could be harmful to the development of our business.
Novogen can compete with us.
We have no contract, arrangement or understanding with Novogen
to preclude it from using technology, other than our glucan
technology, to develop a product for human wound healing and
tissue repair that may be competitive with product candidates we
develop. In addition, Novogen has reserved the intellectual
property rights and know-how rights relating to glucan in fields
other than those specifically licensed to us under the
technology license agreement. 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 MG3601, JSD114 or other product
candidates we develop using our glucan technology that we seek
to exploit. If Novogen seeks to develop a product for human
wound healing and tissue repair using technology other than our
glucan technology, our business will be harmed.
Risks Related to Regulatory Matters
If the data from our pre-clinical trials and clinical
    studies does not demonstrate the safety and effectiveness of
    MG3601, JSD114 or other product candidates we develop to the
    FDA's satisfaction, we will not receive approval to market
    our product candidates in the United States.
To obtain FDA approval for marketing, our pre-clinical and
clinical studies must demonstrate that MG3601, JSD114 or other
product candidates we develop using our glucan technology, is
safe and effective for each indication for which approval is
sought. The FDA's grant of permission to proceed with
clinical trials does not constitute a binding commitment that
the FDA will consider the trial design adequate to support
approval, or that the data generated during pivotal trials will
meet the safety and effectiveness endpoints, or otherwise
produce results that will lead the FDA to grant marketing
approval. If the FDA concludes that the data from our clinical
trials have failed to demonstrate the safety and effectiveness
of our investigational products, we will not receive FDA
approval to market our product candidates in the United States.
We will also need to satisfy the safety and effectiveness
requirements of the government regulations in any other country
where we intend to sell our products.
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We may not complete our pivotal Phase III clinical trial
    on schedule, or at all, or it may be conducted improperly, which
    may delay or preclude FDA marketing approval or the approval of
    another regulatory authority.
We intend to use a portion of the net proceeds of this offering
to conduct a pivotal Phase III trial in the United States for
MG3601. The completion of our pivotal trial may be delayed or
terminated for many reasons, including, but not limited to, if:
•
the FDA does not grant permission to proceed and places the
    trial on clinical hold;
•
subjects do not enroll in our pivotal trial at the rate we
    currently expect;
•
subjects experience an unacceptable rate or severity of adverse
    side effects;
•
third party clinical investigators do not perform our pivotal
    trial on our anticipated schedule or consistent with the
    clinical trial protocol, Good Clinical Practice and regulatory
    requirements, or other third parties do not perform data
    collection and analysis in a timely or accurate manner;
•
inspections of our clinical trial sites by the FDA or
    Institutional Review Boards, or IRBs, find regulatory violations
    that require us to undertake corrective action, suspend or
    terminate one or more sites, or prohibit us from using some or
    all of the data in support of our marketing applications;
•
one or more IRB suspends or terminates the trial at an
    investigational site, precludes enrollment of additional
    subjects, or withdraws its approval of the trial;
•
one or more of our clinical investigators withdraws from our
    trials or deviates from our approved protocol; or
•
the trial reveals that MG3601 is ineffective, inferior to
    existing approved drugs, unacceptably toxic or has other
    unacceptable side effects.
Our development costs will increase if we have material delays
in our pivotal trial, or if we are required to modify, suspend,
terminate or repeat the pivotal trial.
Final approval by the FDA or another regulatory authority
    of MG3601, JSD114 or other product candidates we develop using
    our glucan technology 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 the FDA or another regulatory
authority of MG3601, JSD114 or other product candidates we
develop using our glucan technology for commercial use:
•
MG3601 is in clinical development and JSD114 is in pre-clinical
    development and we will need to have an effective IND and
    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 MG3601 or JSD114 for marketing;
•
data obtained from pre-clinical and clinical tests can be
    interpreted in different ways, which could delay, limit or
    prevent marketing approval;
•
it may take us many years to complete the testing of our product
    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; and
•
the commercialization of MG3601 and JSD114 may be delayed if the
    FDA or another regulatory authority requires us to expand the
    size and/or scope of the clinical trials or requires us to
    perform additional clinical trials.
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While we have not encountered any material delays or adverse
events from the factors described above to date, we cannot
assure you that such delays or adverse events will not be
encountered in the future.
If we fail to obtain an adequate level of reimbursement
    for our products by third-party payors, there may be no
    commercially viable markets for our products.
Our ability or the ability of any of our collaborators to
commercialize our products, if any, may depend in part on the
extent to which government health administration authorities,
private health insurers, and other organizations will reimburse
consumers for the cost of treatment. These third-party payors
continually attempt to contain or reduce the costs of healthcare
by challenging both the need, and the prices charged for medical
products and services. In certain foreign countries,
particularly the countries of the European Union, the pricing of
prescription pharmaceuticals is subject to governmental control.
Significant uncertainty exists as to the reimbursement status of
newly approved therapeutics. We may not be able to sell our
products profitably if reimbursement is unavailable or limited
in scope or amount. In both the United States and certain
foreign jurisdictions, there have been a number of legislative
and regulatory changes to the healthcare system for coverage and
reimbursement. Further proposals are likely. These changes
affect or will affect our ability to market our products and the
coverage and scope of reimbursement for them.
Risks Related to Our Intellectual Property
The success of our glucan product candidates 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. Novogen has not been involved
in any opposition, re-examination, trade secret dispute,
infringement litigation or any other litigation or legal
proceedings pertaining to the licensed patent rights.
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 glucan product
candidates. We have licensed both issued patents and pending
patent applications from Novogen. Novogen has issued patents in
the United States, Australia and the United Kingdom that,
depending on the jurisdiction, cover the use of glucan
generally, or glucan made by a specific process, in the
treatment of trophic ulcers, including venous stasis and
decubitus ulcers, bone fracture, and tendon injury.
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 our ability to obtain and maintain
effective patent protection for the glucan technology, and to
successfully defend patent rights in that technology 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 lags 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
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
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competitors, will not successfully challenge our patents or
circumvent our patent position in the United States or abroad.
We may not be able to prevent others, including potential
    competitors, from using the forms of glucan other than those for
    which Novogen currently has, or may later be issued, patent
    claims for the treatment of trophic ulcers and surgical
    incisions.
The production of various glucan product candidates and the use
of such product candidates to promote human wound healing and
tissue repair are in the public domain and therefore cannot now
be patented by us or by Novogen. Consequently, we are able to
pursue patent protection only for new and non-obvious glucan
compositions, such as the form present in Glucoprime and
Glucocol, the process we use to manufacture Glucoprime, for the
use of these compositions in human skin ulcer healing and tissue
repair and, we believe, for the use of a variety of glucan
compositions, including Glucocol, to promote healing of surgical
incisions, treatment of skin ulceration, treatment of injured
connective tissue including tendons and ligaments, and treatment
of bone fracture/enhancement of orthopedic procedures. As a
result, we may not be able to prevent other companies using
different glucan compositions and different manufacturing
processes from developing active glucan product candidates that
directly compete with our forms of glucan.
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 glucan products, methods of preparing glucan products and
relating to methods and compositions that are not based on
glucan but which are competitive with our product candidates in
treatment of wound healing. Therefore, MG3601, JSD114 and other
product candidates we develop using our glucan technology 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.
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Risks Related to this Offering
An active trading market for shares of our common stock or
    our warrants may not develop following their listing on the
    Nasdaq National Market.
Prior to this offering, there has not been a public trading
market for our common stock or our warrants. An active, liquid
trading market for our common stock or warrants may not develop
or be maintained following this offering. As a result, you may
not be able to sell your shares or warrants 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, which may not be
indicative of prices that will prevail in the U.S. trading
market for the common stock. The market price of our common
stock and warrants on the Nasdaq National Market may decline
below the initial offering price, and you may not be able to
resell your shares of our common stock or your warrants at or
above the initial offering price for the common stock units.
The trading price of the shares of our common stock and
    warrants 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 and warrants could be
highly volatile in response to various factors, many of which
are beyond our control, including:
•
developments concerning MG3601, JSD114 or other product
    candidates we develop using our glucan technology;
•
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; and
•
additional sales by us or Novogen 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. Furthermore,
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
and warrants, 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.
Future sales of our common stock may depress our stock
    price.
The market price of our common stock could decline as a result
of sales of substantial amounts of our common stock in the
public market after this offering, or the perception that these
sales could occur. In addition, these factors could make it more
difficult for us to raise funds through future equity offerings.
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There will
be                     shares
of our common stock outstanding immediately after this offering,
not including the  shares of common stock underlying the
warrants offered hereby.
All of the shares of our common stock sold in this offering will
be freely transferable by persons other than our affiliates
without restriction or further registration under the Securities
Act. The remaining  shares of common stock outstanding will
be "restricted securities" as defined in Rule 144
of the Securities Act. These shares may be sold in the future
without registration under the Securities Act to the extent
permitted by Rule 144 or other exemptions under the
Securities Act. See "Securities Eligible for Future
Sale."
You will experience immediate and substantial dilution as
    a result of this offering and may experience additional dilution
    in the future.
We expect the initial public offering price of our common stock
units to be substantially higher than the net tangible book
value per share of the outstanding common stock. Accordingly,
investors purchasing units in this offering will pay a price per
unit that substantially exceeds the value of our assets after
subtracting our liabilities. 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 at June 30, 2005 after giving
effect to this offering and the initial public offering price.
In addition, purchasers of our common stock units in this
offering will have contributed
approximately           %
of the aggregate price paid by all purchasers of our common
stock, but will own only
approximately           %
of the shares outstanding after this offering based on the
number of shares of our common stock outstanding as of
June 30, 2005. We may also acquire other companies or
technologies or finance strategic alliances by issuing equity,
which may result in additional dilution to our stockholders.
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, if any, in which we initially qualify the
    common stock units for sale 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           %
of the initial public offering price anytime after issuance
until the warrants expire on
the                     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.
We will have broad discretion over the use of the net
    proceeds to us from this offering.
We will have broad discretion to use the net proceeds to us from
this offering, and you will be relying on the judgment of our
board of directors and management regarding the application of
these proceeds. Although we expect to use a substantial portion
of the net proceeds from this offering for general corporate
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purposes, including leasing office and manufacturing facilities,
we have not allocated these net proceeds for specific purposes.
We do not intend to pay dividends in the foreseeable
    future.
We do not currently pay any cash dividends on our common stock
and do not anticipate paying any cash dividend in the
foreseeable future. We intend to retain future earnings to fund
our growth. Accordingly, you will receive a return on your
investment in our common stock only if our common stock
appreciates in value. You may therefore not realize a return on
your investment even if you sell your shares.
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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:
•
continued cooperation and support of Novogen, our parent;
•
the failure to locate, hire, assimilate and retain qualified
    personnel;
•
the inability to construct a pilot-scale manufacturing facility
    to supply us with glucan product candidates for our clinical
    trials;
•
the inability to obtain manufacturing equipment and build a
    manufacturing facility capable of producing commercial
    quantities of our glucan product candidates;
•
our inability to obtain any additional required financing;
•
our failure to successfully commercialize our product candidates;
•
costs and delays in the development and/or receipt of FDA or
    other required governmental approvals, or the failure to obtain
    such approvals, for our product candidates;
•
uncertainties in clinical trial results;
•
our inability to maintain or enter into, and the risks resulting
    from our dependence upon, collaboration or contractual
    arrangements necessary for the development, manufacture,
    commercialization, marketing, sales and distribution of any
    products;
•
competition and competitive factors;
•
our inability to protect our patents or proprietary rights and
    obtain necessary rights to third party patents and intellectual
    property to operate our business;
•
our inability to operate our business without infringing the
    patents and proprietary rights of others; and
•
the failure of any product candidate to gain market acceptance.
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.
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USE OF PROCEEDS
We expect to receive approximately
$                     million
in net proceeds from this offering
($                    if
the over-allotment option is exercised in full), after deducting
underwriting discounts and commissions, and estimated offering
expenses.
•
We intend to use approximately $4.3 million to conduct a
    Phase III pivotal clinical trial in the United States using
    MG3601 for the treatment of venous stasis ulcers;
•
We intend to use approximately $2.8 million for salary and
    other staff costs;
•
We intend to use approximately $9.5 million for capital
    expenditures on laboratory equipment, a pilot-scale
    manufacturing plant and equipment for the testing and production
    of commercial quantities of glucan;
•
We intend to use approximately $5.0 million for the
    expansion of the research and product development program to
    identify other forms of glucan for the formulation of new
    product candidates, including JSD114; and
•
We intend to use the remainder for leasing office and
    manufacturing facilities and for general corporate purposes,
    including payments to Novogen under the terms of our agreements
    with Novogen.
See "Certain Relationships and Related Transactions"
for a description of our agreements with Novogen.
The foregoing represents our best estimate of the allocation of
the net proceeds of this offering based upon the current status
of our business. Our estimates regarding the use of proceeds are
based on certain assumptions, including the development of our
business in the way we anticipate. If any of our assumptions
prove incorrect, we may find it necessary to reallocate a
portion of the proceeds within the above-described categories or
use portions of the proceeds for other purposes.
The timing and amount of our actual expenditures will depend on
numerous factors, including the progress of our research,
clinical trials and other development activities, the number and
breadth of our product development programs, our ability to
establish and maintain collaborations and other arrangements as
well as the amount of cash, if any, generated by our operations.
We will retain broad discretion in the allocation and use of the
net proceeds of this offering. We currently intend to invest the
funds in short-term, investment grade, interest-bearing
securities.
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.
23
Table of Contents
CAPITALIZATION
The following table sets forth our capitalization as of
June 30, 2005:
•
on an actual basis; and
•
as adjusted to reflect the effect of the sale of a total
    of           common
    stock units in this offering, after deducting underwriting
    discounts and commissions and estimated offering expenses. See
    "Use of Proceeds" for more information regarding the
    determination of the expected net proceeds of this offering.
This table should be read in conjunction with
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" and the financial
statements and the notes thereto included elsewhere in this
prospectus.
As at June 30, 2005
Actual
As Adjusted
(In thousands)
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000 shares authorized; no
    shares issued and outstanding
$
—
$
—
Common stock, $0.00000025 par value, 4,000,000 shares
    authorized, 2,377,778 shares issued and outstanding actual and
    shares issued and outstanding as adjusted
—
—
Additional paid-in capital
5,002
Deficit accumulated during development stage
(510
)
(510
)
Total stockholders' equity
$
4,492
$
Total capitalization
$
4,492
$
This table
excludes                    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.
24
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, 2005, before
adjustment for this offering, was approximately $4,492,000, or
approximately $1.89 per share. After giving effect to the sale
of                               common
stock units in this offering, and after deducting underwriting
discounts and commissions and the estimated offering expenses,
our as adjusted net tangible book value at June 30, 2005
would have been
$                    or
$          per
share. This represents an increase in net tangible book value of
$          per
share to our existing stockholders and an immediate dilution
(i.e., the difference between the initial 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, 2005 of
$          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
100
%
Net tangible book value per share at June 30, 2005
$
Increase in net tangible book value per share attributable to
    the new investors
As adjusted net tangible book value per share after this offering
Dilution per share to new investors
$
%
Assuming the over-allotment option is exercised in full, the net
tangible book value at June 30, 2005 would have been
$                    ,
or
$          per
share, the immediate increase in net tangible book value of
shares owned by existing stockholders would have been
$          per
share, and the immediate dilution to purchasers of the common
stock units in this offering would have been
$          per
share.
The following table summarizes at June 30, 2005, after
giving effect to the sale
of                               common
stock units, the number of common stock units purchased from us,
the total consideration paid to us for those units, and the
consideration given by the existing stockholders and by the new
investors assuming
approximately                               shares
of our common stock are outstanding:
Units Purchased
Total Consideration
Average
Price
Number
Percent
Amount
Percent
Per Share
(In thousands)
(In thousands)
Existing stockholders
$
$
New investors
$
Total
$
25
Table of Contents
SELECTED HISTORICAL FINANCIAL DATA
The following table shows selected historical financial data for
the years ended June 30, 2005, June 30, 2004 and
June 30, 2003, and for the period from May 5, 1999
(inception) through June 30, 2005. The information has
been derived from our audited financial statements for the years
ended June 30, 2005, June 30, 2004, and June 30, 2003,
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 financial statements and the notes thereto
included elsewhere in this prospectus.
Period from
May 5, 1999
(Inception)
through
Year Ended June 30,
June 30,
2005
2004
2003
2005
(In thousands, except share and per share data)
Statement of Operations Data:
Net loss arising during development stage
$
(363
)
$
(141
)
$
—
$
(510
)
Net loss per common share
$
(0.17
)
$
(0.07
)
$
—
Weighted average number of shares used to calculate loss per
    share
2,151,103
2,050,000
2,000,073
Common stock outstanding at period end
2,377,778
2,050,000
2,050,000
Year Ended
June 30,
2005
2004
(In thousands)
Balance Sheet Data:
Cash and cash equivalents
$
4,606
$
240
Total assets
4,606
240
Stockholders' equity
4,492
181
26
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 financial statements and the notes thereto
appearing elsewhere in this prospectus. Our fiscal year ends
June 30. We commenced business operations in May 2003, and as a
result our financial results for the fiscal year ended
June 30, 2004 represent our first full year of operations.
Results of Operations
We are a clinical stage biopharmaceutical company focused on
discovering and developing a novel class of drugs for human
wound healing and tissue repair. Our proprietary technology is
based on the carbohydrate
(1
®
3)(1
®
6)-
b
-glucan.
This molecule activates the innate healing cascade by binding to
a specific class of receptors, known as glucan receptors, that
are expressed on the critical cells involved in the healing
process. Our lead product candidate, MG3601, targets the chronic
wound care market, specifically the treatment of skin ulcers,
known as trophic ulcers, which we believe represent a large area
of unmet medical need. Our second product candidate, JSD114, is
being developed to accelerate healing of surgical incisions that
are at risk of dehiscence, or wound breakdown. We also intend to
use our glucan technology to develop product candidates for
intra-operative and injection applications in tendon, ligament
and bone surgeries and injuries. We are presently engaged in the
clinical development of MG3601 for the treatment of venous
stasis ulcers and the pre-clinical development of JSD114. The
technology rights relating to MG3601 and JSD114 are licensed to
us by Novogen. Our main focus during fiscal 2005 was to
undertake human clinical testing of MG3601. We do not currently
employ any staff directly but obtain our services from Novogen
under a services agreement and an agency agreement.
We have not generated any revenues from operations since our
inception. In addition, we had no operations in fiscal year 2003
except for the sale in a private placement of 50,000 shares of
our common stock to Australian and international investors and
institutions. See " — Liquidity and Capital
Resources" for a description of this private placement.
Operating expenses were $363,000 for fiscal year 2005 and
$141,000 for fiscal year 2004. Operating expenses in fiscal 2005
included $252,000 of costs associated with conducting the
clinical trials of MG3601 and $62,700 of costs incurred under
the technology license agreement, the services agreement and the
agency agreement with Novogen. See "Certain Relationships
and Related Transactions" for a description of our
agreements with Novogen. To date, there have been no costs
charged by Novogen for the supply of glucan active material
under the terms of the manufacturing license and supply
agreement as the clinical trial material used in the recent
Phase II trial was drawn from excess supplies manufactured
for earlier clinical trials. Glucan that is provided to us for
clinical trials will be charged to us under the terms of the
manufacturing license and supply agreement. We expect that the
cost of conducting clinical trials will increase in the future
as we undertake our planned Phase III clinical trial for MG3601.
Also, other research and development costs are expected to
increase as we expand our research and development program for
the development of new glucan product candidates.
Of the $363,000 of operating expenses incurred in fiscal year
2005, $349,000 is included under research and development
expenses, including the $252,000 of clinical trial expenses, and
$14,000 is included under selling, general and administrative
expenses in our fiscal year 2005 financial statements. Our
operating expenses increased by $222,000 in fiscal year 2005
versus fiscal year 2004 primarily as a result of increased
expenditures on our clinical trial program, which increased by
$175,000 from $77,000 to $252,000 in fiscal year 2004.
Research and Development Expenses
Research and development expenses consist mainly of our clinical
trial expenditures and our payments to Novogen for research
support services under the terms of the services agreement.
Research and development expenses were $349,000 in the aggregate
for the fiscal year ended June 30, 2005, and
27
Table of Contents
$138,000 for the fiscal year ended June 30, 2004. Research
and development costs incurred since inception through the
fiscal year ended June 30, 2005 were $493,000 in the
aggregate.
We expense our research and development costs as they are
incurred and we expect our research and development costs to
increase in the future as we progress MG3601's clinical
development program for the venous stasis ulcer indication,
continue the development program for other product candidates,
including JSD114, which are active in the healing cascade,
formulate new product candidates using active glucan compounds
and identify therapeutic applications for new product candidates.
All of our research and development costs to date have been
incurred in the clinical development program of MG3601.
We expect that a large percentage of our research and
development expenses in the future will be incurred in support
of our current and future clinical development programs and in
the development of new product applications using our glucan
technology. These expenditures are subject to a number of
uncertainties in timing and cost to completion.
The duration and cost of clinical trials may vary significantly
over the life of a project as a result of:
•
the number of sites included in the trials;
•
the length of time required to enroll suitable patients;
•
the number of patients that participate in the trials; and
•
the efficacy and safety profile of the product.
Our strategy also includes the option of entering into
collaborative arrangements with third parties to participate in
the development and commercialization of glucan product
candidates. In the event third parties have control over the
clinical development process, the completion date would largely
be under the control of that third party.
As a result of these uncertainties, we are unable to determine
the duration of or completion costs for our research and
development projects or when and to what extent we will receive
cash inflows from the commercialization and sale of MG3601 or
other product candidates we may develop using our glucan
technology.
Selling, General and Administrative Expenses
Selling general and administrative expenses consist mainly of
expenses associated with accounting and auditing, professional
fees, public relations and administration fees paid to Novogen
under the terms of the services agreement.
Liquidity and Capital Resources
At the end of the fiscal year ended June 30, 2005, we had
cash resources of $4,606,000. 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.
During May 2003, we raised $A500,000 (approximately $328,000) in
a private placement of 50,000 shares of our common stock from
Australian and international investors and institutions. The
shares were issued at $A10.00 (approximately $6.56) each with
attaching warrants to purchase an additional two shares of
common stock at an exercise price of $A10.00 (approximately
$6.56) per share. The attaching warrants were exercisable prior
to November 5, 2004. Novogen also issued to these investors
a convertible security enabling investors to convert their
investment in us into Novogen shares at an equivalent Novogen
share price of $A5.00 (approximately $3.28) per share.
During November 2004, we received a total of $A900,000
(approximately $672,000) following the exercise of 90,000 of the
warrants that were issued as part of our May 2003 private
placement at an
28
Table of Contents
exercise price of $A10.00 (approximately $7.47) per share. Also,
in November 2004, Novogen issued 10,000 of its shares following
the conversion of 5,000 shares of our common stock under the
terms of the Novogen convertible security.
In April 2005, we issued a further 237,778 shares of common
stock in a private placement to a single investor in the United
States for a purchase price of $16.83 per share. The proceeds of
this private placement totaled approximately $4.0 million.
After giving effect to the above transactions, Novogen owns
approximately 84.3% of our issued and outstanding capital stock.
We believe that upon completion of this offering our cash
resources will be sufficient for us to implement our business
plan for at least the next two years.
Contractual Obligations
At June 30, 2005, we had contracted to conduct research and
development expenditures of approximately $43,200. Of the
expenditure commitments, clinical trial amounts are based on the
assumption that all patients enrolled in clinical trials will
complete the maximum number of allowed treatment cycles. The
amounts expected to be incurred assuming all treatment cycles
are completed, are as follows.
Payment due by period
less than 1
More than
Contractual Obligations
Total
Year
1 -3 Years
3-5 Years
5 Years
(In thousands)
Purchase Obligations
$
43
$
43
$
—
$
—
$
—
Total
$
43
$
43
$
—
$
—
$
—
We have no off-balance sheet arrangements.
Capital Expenditure
As of the date of this prospectus we have no commitments for any
capital expenditures. In order to supply pilot and commercial
quantities of our glucan product candidates in the future, we
will need to purchase certain capital equipment as part of
developing a manufacturing plant. See "Use of
Proceeds" for more information relating to our planned
capital expenditure.
Critical Accounting Estimates
The preparation of our 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.
Clinical trial expenses of $252,000 have been included in our
financial statements for the year ended June 30, 2005, and
no amounts have been accrued at June 30, 2005. Clinical
research contracts may vary depending on the clinical trial
design and protocol. Generally the costs, and therefore our
estimates, associated with clinical trial contracts are based on
the number of patients, patient treatment cycles, the type of
treatment and the outcome being measured. The length of time
before actual amounts can be determined will vary depending on
length of the patient cycles and the timing of the invoices by
the clinical trial partners.
29
Table of Contents
Recent Accounting Announcements
Share-Based Payments
In December 2004, the FASB Issued Statement of Financial
Accounting Standards No. 123R (Statement 123R),
"Share-Based Payments," the provisions of which become
effective for us in fiscal year 2006. This Statement eliminates
the alternative to use APB No. 25's intrinsic
value method of accounting that was provided in
Statement 123 as originally issued. Statement 123R
requires companies to recognize the cost of employee services
received in exchange for awards of equity instruments based on
the grant-date fair value of those awards, while the
fair-value-based method prescribed by Statement 123R is
similar to the fair-value-based method disclosed under the
provisions of Statement 123 in most respects, there are
some differences. Our equity compensation plan provides for the
grant of equity awards to our directors, employees, employees of
our affiliates and certain of our contractors and consultants.
To date no equity awards have been issued under the plan.
Statement 123R is effective for us in fiscal year 2006.
Accounting Changes and Error
Corrections
In May 2005, the FASB issued Statement of Financial Accounting
Standards No. 154 (SFAS 154), "Accounting Changes
and Error Corrections," which provides guidance on the
accounting for and reporting of accounting changes and
correction of errors. This statement changes the requirements
for the accounting for and reporting of a change in accounting
principle and applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. This statement
is effective for accounting changes and corrections of errors
made in fiscal years beginning after December 15, 2005. We
do not anticipate a material effect upon the adoption of this
statement.
Market Risk and Risk Management Practices
We currently rely on Novogen to maintain controls that safeguard
our interests and ensure integrity in the reporting to
stockholders. It is our intention to establish our own controls
for these purposes. We intend to adopt practices to minimize
risks that arise through our activities. These will 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
Inflation is 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
trials 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.
30
Table of Contents
BUSINESS
We are a clinical stage biopharmaceutical company focused on
discovering and developing a novel class of drugs for human
wound healing and tissue repair. Our proprietary technology is
based on the carbohydrate
(1
®
3)(1
®
6)-
b
-glucan.
This molecule binds to a specific class of receptors known as
glucan receptors, that are expressed on the critical cells
involved in the innate healing cascade. After binding occurs,
cell signalling triggers the release of a variety of cytokines
and growth factors that initiate the healing process. We believe
our glucan technology can be employed to develop a family of
products that promote and accelerate human wound healing and
tissue repair across a broad range of medical and surgical
applications, including chronic wound care, acute wound care and
tissue inflammation. Our lead product candidate, MG3601, targets
the chronic wound care market, specifically the treatment of
skin ulcers, known as trophic ulcers. We completed a
Phase II clinical trial of MG3601 in March 2005. The
results of that trial demonstrated that MG3601 provided a
statistically significant rate of improved wound closure in
comparison to placebo.
A key component of our proprietary technology is an
understanding of the structure-function relationship of the
(1
®
3)(1
®
6)-
b
-glucan
molecule that our glucan technology utilizes. In particular, we
have developed significant expertise with respect to engineering
optimal forms of the glucan molecular structure to support
commercial development of our product candidates while
maintaining the clinical efficacy of the molecule. We believe
our technology can more fully restore wound healing by
activating the critical cells involved in the healing process.
These critical cells include macrophages, which initiate the
healing cascade, fibroblasts, which initiate the necessary
collagen matrix formation, vascular endothelial cells, which
promote angiogenesis (blood vessel formation), epithelial cells,
which contribute to skin closure, and neutrophils (white blood
cells), which contribute to infection control. To date, we have
developed two active compounds known as Glucoprime and Glucocol.
Glucoprime has been engineered as the active ingredient for
therapeutic indications utilizing topical application. Glucocol
has been engineered for intra-body therapies including the
treatment of tendons, ligaments, joints and bones.
MG3601, containing Glucoprime as its active ingredient, is an
aseptic topical product for the treatment of trophic ulcers.
Trophic ulcers are skin ulcers associated with venous
insufficiency, arterial insufficiency, diabetes or pressure and
are often deep, large, slow-to-heal wounds that are prone to
serious infection and further complications. These wounds, which
develop due to a patient's impaired vascular and tissue
repair capabilities, are often difficult, or in the worst cases,
impossible, to treat quickly and successfully with conventional
products. Trophic ulcers often involve physiologic and metabolic
complications such as reduced blood supply, a compromised
lymphatic system or immune deficiencies. Trophic ulcers, due to
their nature, frequently result in sepsis, which can lead to
amputation, and, in some cases, death. Given the high cost and
infection risk of treating trophic ulcer patients in health care
facilities, the ability to accelerate their healing and reduce
infection levels is particularly important.
We have completed a Phase II clinical study of MG3601 in
patients with chronic trophic ulcers, specifically deep venous
stasis ulcers of the legs. The trial was conducted in Australia
over a 12-week period and involved 60 patients. Patients
were randomized either to a placebo arm or to low-dose (0.1%
Glucoprime) or high-dose (1.0% Glucoprime) arm. The trial was
double-blinded, which means that neither the patient nor the
person administering the treatment knew whether the placebo or a
Glucoprime product was being administered. MG3601 in both
formulations was assessed for its effects on both the rate of
wound closure and the degree of healing. In July 2005, we
released the results of this Phase II clinical trial. Both
active arms achieved a statistically significant rate of
improved wound closure compared to the placebo arm. The rate of
wound closure was 20.4 square millimeters per week for the
low-dose arm and 15.4 square millimeters per week for the
high-dose arm, compared to a rate of wound closure of
5.4 square millimeters per week for the placebo arm.
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Table of Contents
Our second product candidate, JSD114, containing Glucocol as its
active ingredient, is being developed to accelerate healing of
surgical incisions that are at risk of dehiscence, or wound
breakdown. These wounds are typically associated with major
surgery where there is extensive tissue removal or the
occurrence of lymphedema following the removal of lymph nodes.
Closure of these wounds can present major difficulty and may
require extended hospitalization, which makes this an area of
significant unmet medical need in the field of surgical practice.
Our immediate priority is to submit an IND to the FDA for MG3601
and to conduct a pivotal Phase III clinical trial in the
United States using MG3601 for the treatment of venous stasis
ulcers. Additionally, we intend to continue pre-clinical
development of JSD114 for the treatment of surgical incisions at
risk of dehiscence and advance JSD114 into human clinical trials.
We also intend to use our glucan technology to develop product
candidates for intra-operative and injection applications in
tendon, ligament and bone surgeries and injuries.
Human Wound Healing and Tissue Repair
Human wound healing and tissue repair is a highly integrated and
coordinated process, comprising a range of different steps, the
main ones being angiogenesis, which refers to the growth of
blood vessels, fibrogenesis, which refers to the growth of
fibroblasts and the formation of collagen, epithelialization,
which refers to the in-growth of epithelium, and final
remodeling. Effective repair requires an orderly sequence of
these events, with one step meshing with the next step.
The initiation and coordination of this healing cascade are
primarily under the control of macrophages. Macrophages are
scavenger cells that migrate through tissues, detecting and
responding to injured tissue. Their response to injury is to
release a variety of chemical cytokines and growth factors that
initiate the different steps of the healing cascade.
The repair process can be disrupted by a variety of local,
regional and systemic factors, with impairment of any one
component of the healing cascade having the potential to lead to
failure of repair, such as trophic ulcers, chronic repair, such
as tendonitis, or excessive repair, such as keloids. The
ulcerative process is a consequence of impaired circulation,
with the resulting ischaemia and/or tissue edema impeding some
or all of the various components of the healing cascade. A high
proportion of venous stasis ulcers also are septic and we
believe that this serves to impair the healing response further.
While some medical devices and growth factors have been marketed
to treat chronic wounds, we believe that, to date, the current
standard best-practice management of an impaired healing process
has been limited to attempts to improve environmental conditions
surrounding the wound. Treatment of venous stasis ulcers
includes use of compression bandages, hydrocolloid dressings,
regular change of dressings, physiotherapy, hypostatic drainage,
local antibiotic therapy and debridement. We believe that a
significant portion of these ulcers do not completely heal or
recur even with best-practice wound management. We also believe
that low compliance rates with best-practice wound management
stem largely from the slow healing rate of these ulcers, which
typically takes several months to heal under ideal conditions
and the high reliance in most health care systems on
self-management of wounds.
Unless the underlying problem disrupting the healing process is
reversed completely, the cellular process within the wound that
is driving and integrating the repair process will continue to
be dysfunctional. In addition, we believe that because in most
cases it is not possible to achieve complete or even
near-complete restoration of a normal local environment, it is
important to be able to stimulate dormant or tardy cellular
events within the wound.
Our Solution
Our glucan technology is based on the ability of the
(1
®
3)(1
®
6)-
b
-glucan
molecule to activate the innate healing cascade by binding to a
specific class of receptors, known as glucan receptors, that are
expressed on the critical cells that are involved in the healing
process. These critical cells, which include macrophages and
other cells such as neutrophils and fibroblasts, when attached
to the wound space and
32
Table of Contents
activated, produce the range of cytokines and growth factors
vital to the healing process. As a result, we believe the entire
healing cascade is accelerated in a substantial way, but without
disturbance to the normal integration of the different
components of the cascade. In contrast to previous
pharmaceutical strategies based on the addition of individual
growth factors to the wounded tissue, our approach is based on
restoration of the normal cellular events involved in the
healing process, thereby helping to ensure that the full
complement of cytokines and growth factors responsible for
healing is produced.
We believe that the primary clinical benefits from the use of
our MG3601 product candidate to treat trophic ulcers will be:
•
a higher proportion of ulcers showing complete healing both in
    patients with best-practice wound management and in patients
    with sub-optimal wound management;
•
faster times to complete healing;
•
a decreased incidence of wound sepsis; and
•
a higher compliance rate with best-practice wound management as
    a result of better early wound healing.
We believe that similar clinical benefits will be possible with
our JSD114 product candidate that we are developing for the
treatment of surgical incisions at high risk of dehiscence.
Market Opportunity
The markets for human wound healing and tissue repair products
are large and growing. Business Communications estimates that
the global advanced wound care market totaled $2.0 billion
in 2004 and is expected to reach $2.8 billion by 2008.
Business Communications further estimates that the chronic wound
care market segment accounts for the largest portion of revenues
in the advanced wound care market with 42% of the market and
estimated revenues of approximately $722 million in 2003.
We believe a number of significant market trends will continue
to expand the market including the aging of the general
population, increasing rates of obesity, heightened interest in
advanced dressings, increased pressure by hospitals and
healthcare providers to discharge patients earlier and growth in
the incidence and prevalence of diabetes.
We have identified three markets that will be targeted for
product development based on our glucan technology.
Chronic Wound Care: Trophic Ulcers.
We plan to address
the market for chronic wound care with our lead product
candidate MG3601 for the treatment of trophic ulcers. Trophic
ulcers are skin ulcers that are generally associated with
impaired circulation. These ulcers include venous stasis ulcers,
which occur due to venous insufficiency and typically appear on
the legs of patients, diabetic ulcers, which occur due to
arterial insufficiency and typically appear on the feet of
patients and decubitis ulcers, known as pressure ulcers, which
occur due to pressure ischemia from patients that are bedridden.
Pressure ulcers can appear almost anywhere on the body of the
patient where the patient has been confined to laying or sitting
in one position for extended periods of time. Trophic ulcers, in
particular venous stasis ulcers, are characteristically
difficult and slow to heal, often requiring care over periods
for several months to as long as many years. According to the
National Institutes of Health Clinical Center, each year more
than 4 million Americans suffer from chronic non-healing
wounds. In severe cases, amputation is the only surgical
intervention available to treat these ulcers, in particular,
those stemming from arterial insufficiency associated with
diabetes. Trophic ulcers primarily occur in patients that are
past middle age. These ulcers can have a debilitating impact on
patients' lives and represent a significant community
health problem. For example, according to the wound care trade
publication,
Advances in Skin & Wound Care,
the
estimated per-episode cost of care for venous stasis ulcers can
exceed $40,000. To further illustrate the importance of this
market, the CDC estimates that approximately 85% of lower
extremity amputations in diabetic patients in the United States
are preceded by a foot ulcer.
Trophic ulceration is essentially a disease of neglect. With
best-practice wound care that focuses on keeping the wound clean
(debridement) and free of infection, and working to improve
circulation, it can
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Table of Contents
be possible to achieve total or substantial healing. However, we
believe it is general clinical experience that the intensive and
expensive natures of such wound management, along with the
typical slow response rate, combine to produce poor patient
compliance, resulting typically in chronic, debilitating
ulceration. Also, the difficulty in correcting the underlying
circulatory dysfunction can impede the healing process or lead
to repeat wound breakdown.
Acute Wound Care: Surgical Incisions.
The second market
we are targeting to apply our glucan technology is the promotion
of repair of surgical incisions, in particular surgical
incisions at high risk of dehiscence, or wound breakdown.
Dehiscence of surgical wounds typically is associated with
extensive wounds such as wide excisions following tumor removal.
Surgical trauma, poor lymphatic drainage, and tensile pressure
often contribute to the extended healing times of such wounds.
We believe there is a need for a therapy that increases the
speed of healing in such wounds because of the potential
benefits of reduced hospitalization times and rates of wound
infection.
We plan to address the market for acute wound care with our
JSD114 product candidate for the treatment of large surgical
incisions that are at risk of dehiscience. According to the CDC,
the incidence of wounds attributable to surgical procedures
resulting in open wounds in the United States was approximately
7.7 million in 2002.
Tissue Inflammation: Tissue Repair.
The third targeted
market is the general group of medical situations where the
tissue repair process typically is slow as a matter of course,
and where promotion of the repair process could be expected to
lead to earlier and improved rates of healing. Healing in
response to injuries or surgical repairs of tendons, ligaments,
joints, bones and the implantation of orthopedic devices are the
primary examples of this market.
We intend to address this market by developing additional
product candidates based on the active ingredient, Glucocol.
Our Glucan Technology
Our technology platform is based on the carbohydrate
(1
®
3)(1
®
6)-
b
-glucan
and its ability to activate the innate healing cascade by
binding to glucan receptors that are expressed on the critical
cells involved in the healing process. Glucans are polymers of
glucose. There are many thousands of different forms within the
broad glucan family, with one of those family members,
(1
®
3)(1
®
6)-
b
-glucan,
providing the cell wall structure of fungal and yeast cells.
The technology that now forms the basis of our product
development program commenced in 1989 as a research project at
the Department of Surgery, The University of Sydney, under the
direction of Professor Graham Kelly, a member of our board of
directors and an executive officer of Novogen. That university
project was an investigation into the feasibility of stimulating
healing within the surgical wounds of organ transplant
recipients where normal tissue healing is impaired by the use of
immunosuppressive therapy through antagonism of local, or
intra-wound, immune suppression without compromising systemic
immune suppression.
A review of the scientific literature indicated that glucan has
the ability to accelerate wound healing. Professor Kelly's
research team was able to confirm this effect in animals using
micro-particulate glucan prepared by a method described in the
scientific literature by Professor David Williams of Tulane
University. It was shown that this effect could be achieved
without acceleration of the tissue rejection process.
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Table of Contents
At that time, a number of solubilized forms of glucan were being
tested clinically by other groups. The rationale behind the
development of these soluble forms was in part an attempt to
reduce the substantial heterogeneity (in terms of molecular
weight) of micro-particulate glucan, and in part to produce a
solubilized product that could be administered intravenously.
One of these product candidates was a glucan sulfate, which was
the subject of a patent granted to Professor Williams of Tulane
University, and another was a glucan phosphate, which was the
subject of a patent granted to Alpha Beta Technologies, Inc.,
which has since been renamed RegeneRx Biopharmaceuticals, Inc.,
a U.S. biotechnology company.
Both of these product candidates were incorporated into
Professor Kelly's research project and compared to
micro-particulate glucan. Micro-particulate glucan was found to
be superior to both soluble forms of glucan in terms of
promotion of wound healing.
The university studies relating to glucan commenced in 1989, at
which time Novogen's predecessor, which was at that time a
private company, assumed responsibility for continuing with the
project. Subsequent structure-function studies were conducted by
Novogen's predecessor, showing that while a large molecular
weight certainly was important, the prime determinant of
efficacy was the degree of (1
®
6)
side-branching. Glucan is comprised of a linear backbone of
glucose units with (1
®
3)
linkages and side-branches of
(1
®
6) linkages. Our studies
indicate that while the glucan receptor is able to be activated
by (1
®
3) glucan, the presence of
a high degree of side-branching appears to augment considerably
the stimulatory effect. Solubilization of glucan is associated
with loss of these side-branches, rendering the glucan much less
effective in terms of promotion of wound healing. Further
studies went on to identify the optimal
(1
®
6):(1
®
3)
ratio range.
The next step in Novogen's predecessor's research of
glucan was to determine whether the identified optimal form of
glucan was able to promote healing in wounds where the healing
process was delayed. While glucan was recognized as being able
to promote healing in wounds with normal healing capacity, its
ability to promote a dysfunctional healing process was unknown.
Pre-clinical animal studies showed that micro-particulate glucan
was able to restore healing rates to normal in wounds which had
been treated with immunosuppressive drug therapy.
Novogen's research embraced structure-function studies on
different glucans, methods of formulation, the establishment of
quality assurance/quality control procedures, and the
construction of a pilot glucan manufacturing plant for glucan
product candidates.
Our Product Candidates
We have developed two active ingredients:
Glucoprime
is a high molecular weight,
micro-particulate glucan with a high degree of side branching.
This compound is intended for trophic ulcer repair. Glucoprime
is the active ingredient in our lead product candidate, MG3601,
for the treatment of venous stasis ulcers.
Glucocol
is a low molecular weight, colloidal
glucan with a lower degree of side-branching consistent with its
higher solubility. This compound is intended to be used to
accelerate healing of surgical incisions that are at risk of
dehiscence, or wound breakdown. Glucocol is the active
ingredient in our second product candidate, JSD114.
A Phase I safety and efficacy study of a high molecular
weight glucan (Glucoprime) was conducted in 1997 in a
randomized, double-blind, placebo-controlled trial in patients
with chronic venous stasis ulcers that had become refractory to
standard wound management therapies. The high molecular weight
glucan was compared to another form of glucan that had a lower
molecular weight and a lower proportion of side-branching. The
two forms of glucan were suspended in a cream base and preserved
with paraben. Patients were randomly assigned to the three
treatment groups with six patients per group. Treatment was three
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Table of Contents
times weekly for four weeks. Efficacy was assessed by
planimetry, measuring the reduction in the surface area of the
wound.
The degree of healing over eight weeks was as follows:
Percent Reduction in
Group
Wound Surface Area
1 (placebo)
4.4
%
2 (high molecular weight glucan)
36.7
%
3 (low molecular weight glucan)
(28.9
)%
No intolerances or toxicities were observed or reported in
association with the use of the high molecular weight glucan,
low molecular weight glucan or the placebo.
We concluded from this study that:
•
the high molecular weight glucan with a high
    (1
®
6):(1
®
3)
    linkage ratio was effective and that a similar micro-particulate
    glucan with a lower
    (1
®
6):(1
®
3)
    ratio was not effective, confirming our pre-clinical
    experience; and
•
the high molecular weight glucan was more effective than a
    placebo product.
MG3601
With this Phase I study confirming the ability of the high
molecular weight glucan to stimulate healing within chronic
trophic ulcers, we commenced a Phase II study with the aim
of identifying an appropriate formulation that would form the
basis of a pivotal trial for marketing approval.
A change in formulation for purposes of conducting the
Phase II study was driven by a strategic decision to avoid
preservatives such as paraben, which was used in the
Phase I clinical study, which had the potential to inhibit
macrophages. As a result of formulation studies that were
conducted, we decided to use a gel base preserved with 12%
methanol, which we refer to as MG3601. The second formulation
issue was to determine the appropriate dose of active Glucoprime
in MG3601, and whether there would be a dose-response effect. We
decided to test preparations containing 0.1% and 1.0% active
Glucoprime.
Sixty patients with chronic venous stasis ulcers that had become
refractory to standard wound management therapies were
randomized to three treatment arms:
•
placebo (our MG3601 product candidate base without Glucoprime);
•
Our MG3601 product candidate containing 0.1% Glucoprime; and
•
Our MG3601 product candidate containing 1.0% Glucoprime.
As part of the study, ulcers were cleaned, debrided, the test
product applied, and the wounds dressed with pressure bandages
three times weekly for up to 12 weeks. The wound edges were
traced weekly, and both the rate of healing and the degree of
healing determined.
The data from this study was released in July 2005. No
toxicities or adverse events were reported in this study. The
data showed that our MG3601 product promoted the rate at which
wounds healed, with MG3601-treated ulcers healing at a
statistically significant rate of improvement compared to
placebo-treated ulcers. The rate of wound closure was as follows:
Observed Significance
Group
Rate of Wound Closure
Level (P Value)
1 (placebo)
5.4 mm
2
/week
—
2 (MG3601 — 0.1% Glucoprime)
20.4 mm
2
/week
.01
3 (MG3601 — 1.0% Glucoprime)
15.4 mm
2
/week
.04
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The overall mean level of healing over the 12 weeks,
measured by the reduction in the surface area of the ulcer, was
as follows:
Percent Reduction in
Group
Wound Surface Area
1 (placebo)
10
%
2 (MG3601 — 0.1% Glucoprime)
59
%
3 (MG3601 — 1.0% Glucoprime)
55
%
These results were observed even though there was a large
discrepancy in the size of the ulcers, with the two MG3601
treatment groups having substantially larger average ulcer size
than the placebo group, despite the patients being randomized.
Specific Objectives/Strategy
Our business plan is to continue to develop new product
candidates based on our proprietary glucan technology
specifically engineered for therapeutic applications in large
areas of unmet medical need. Our current objectives are to:
•
submit an IND to the FDA for MG3601 so that human clinical
    testing can commence in the United States; and
•
commence a Phase III pivotal clinical trial in the United States
    using MG3601 for the treatment of venous stasis ulcers.
Our other objectives over the next two years are to:
•
construct a pilot-scale manufacturing plant and laboratory
    facility for production of glucan product candidates to be used
    in clinical trials;
•
establish manufacturing facilities for the supply of commercial
    quantities of our product candidates;
•
continue pre-clinical development of JSD114 for the treatment of
    surgical incisions at risk of dehiscence;
•
obtain an IND for JSD114 and commence a clinical trial program
    in the appropriate patient group; and
•
use our glucan technology to develop product candidates for
    intra-operative and injection applications in tendon, ligament
    and bone surgeries and injuries.
We anticipate that with the net proceeds of this offering we
will have sufficient funds for these activities. We cannot
assure you, however, that we will achieve these objectives.
Our long-term commercial objective is to seek to develop
relationships with strategic partners for the development,
marketing and distribution of products for which marketing
approval is obtained.
Competition
The clinical development and commercialization of new wound
healing treatments is highly competitive. As a development stage
biopharmaceutical 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,
therapies or drug candidates in various stages of pre-clinical
or clinical development which focus on human wound healing and
tissue repair. Some of these potentially competitive products,
therapies and drugs are further advanced in development and may
receive FDA or other regulatory approval and may be
commercialized earlier than MG3601 or JSD114. Some of these
products, therapies and drugs may be directly competitive with
MG3601 and JSD114 to the extent that they would obviate the need
for our product candidates. In other
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Table of Contents
cases, however, these products, therapies or drugs may not be
competitive to the extent that they are not mutually exclusive
and could be used in conjunction with our product candidates.
Competitive products include devices, such as methods of
increasing blood flow and oxygen tension, drugs, and biologics,
such as growth factors. We have not conducted comparative tests
to evaluate the relative efficacy and safety of these methods
versus our product candidates. The most direct competition for
our glucan-based products are biologics such as growth factors
(platelet-derived growth factor, or PDGF, fibroblast-derived
growth factor, angiogenic growth factors), which have the
objective of stimulating particular components of the wound
healing cascade, in the same way that our glucan product
candidates are intended to work. However, we believe the
essential difference between such competitive products and our
glucan technology remains that these competitive biologicals are
limited in the scope of their action, and we are unaware of any
competitive product either commercialized or under development
that has the broad stimulatory effect on all key aspects of the
wound process that our glucan technology is able to provide.
While we believe, based on current clinical practice, that a
substantial need remains in medical and surgical practices for
products that have the ability to promote tissue repair in an
effective and safe manner, we are unable to assess the potential
of competitive products that we are aware of being developed to
meet this need to be either ahead of or better than our
glucan-based product candidates. Also, we have not conducted
comparative tests to evaluate the relative efficacy and safety
of any competitive products.
Our competitors may develop and commercialize products,
therapies or drugs that are safer, less costly and more
efficacious in the treatment of chronic venous stasis ulcers and
other wounds. In addition, we and Novogen, our services
provider, 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. Johnson &
Johnson, which is one of the companies involved in developing
growth factors, such as recombinant human PDGF (rhPDGF-BB), and
in marketing Regranex, and Kinetic Concepts, which has been
marketing a Vacuum Assisted Closure system, are two such
companies with potentially competitive wound healing therapies.
In this respect, Johnson & Johnson, Kinetic Concepts and
others may be able to more easily develop technologies and
products that would render our technologies or products obsolete
or non-competitive.
Intellectual Property
Novogen has been granted patents and has additional patents
pending in a number of countries which relate to a family of
chemically related compounds and their use in human therapeutic
treatment. We have licensed from Novogen the rights to the
Novogen patents and applications as they relate to glucan in
human therapeutic treatment. Novogen has granted to us an
exclusive, worldwide, non-transferable license to use and
exploit the glucan technology, which includes glucan patent
rights, know-how and any developments in relation to the patent
rights and know-how, solely in the fields of:
•
therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;
•
treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;
•
prevention and treatment of ultraviolet light induced skin
    damage in humans;
•
treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;
•
joint repair, particularly with artificial joints in humans; and
•
treatment of poorly healing surgically dissected or transected
    tissue in humans.
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Table of Contents
See "Certain Relationships and Related Transactions"
for more information regarding our agreements with Novogen.
The exclusive, worldwide, non-transferable license granted to us
also includes processes for the production of
(1
®
3)(1
®
6)-
b
-glucan.
The Novogen patents and applications which we have licensed are
as follows:
Granted Patents
•
European Patent No. 0815144, covering Austria, France,
    Germany, Italy, The Netherlands, Spain, Sweden, Switzerland and
    the United Kingdom;
•
United States Patent No. 6,242,594;
•
United Kingdom Patent No. 2314850;
•
United Kingdom Patent No. 2331014; and
•
Australian Patent No. 716181.
Pending Applications
•
United States Patent Application No. 10/421,659;
•
Canadian Application No. 2214899; and
•
Japanese Application No. 08-527114.
These patents and patent applications derive from International
Patent Application No. PCT/ AU96/00138 (published under
No. WO96/28476, and claiming priority from Australian
Patent Application PN1661 filed 13 March 1995). The patents will
be in force until March 13, 2016 on the basis of a 20-year
patent term.
We have also licensed from Novogen the trade marks GLUCOPRIME
and GLUCOCOL which respectively relate to pharmaceutical
preparations containing glucan and wound healing agents.
As patent applications in the United States are sometimes
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 the Novogen patents and applications as they relate
to glucan technology for the uses referred to above. Moreover,
pursuant to the terms of the Uruguay Round Agreements Act,
patents filed on or after June 8, 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
glucan product candidates 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
submission of an IND and the filing of the corresponding New
Drug Application (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.
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Table of Contents
In order to protect the confidentiality of our glucan
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. Under the technology
license agreement we are required to assign these developments
to Novogen and these developments are then automatically
licensed back to 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 ours. Therefore, MG3601, JSD114 and
other product candidates we develop using our glucan technology
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 its
glucan technology and its use in human wound healing and tissue
repair. 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 the technology license agreement, Novogen granted us an
exclusive, worldwide, non-transferable license to use and
exploit the glucan technology, which includes glucan patent
rights, know-how and any developments in relation to the patent
rights and know-how, solely in the fields of:
•
therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;
•
treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;
•
prevention and treatment of ultraviolet light induced skin
    damage in humans;
•
treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;
•
joint repair, particularly with artificial joints in humans; and
•
treatment of poorly healing surgically dissected or transected
    tissue in humans.
Under the manufacturing license and supply agreement, Novogen
assumes responsibility for the supply of glucan in its primary
manufactured form for both the research and development program
and the ultimate commercial use of product candidates we develop
using our glucan technology. Novogen has a pilot manufacturing
plant which we believe has sufficient capacity to meet the
projected amount of glucan required to complete the proposed
clinical program. We intend to use a portion of the net proceeds
of this offering on laboratory equipment and a pilot-scale
manufacturing plant in order to produce clinical trial
quantities of our glucan product candidates. Once we are able to
do so, we intend to exercise our right under the manufacturing
license and supply agreement to terminate that agreement by
paying Novogen a termination fee of $250,000. In the event we
elect to terminate the manufacturing license and supply
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Table of Contents
agreement, the royalty we pay to Novogen under the technology
license agreement will increase from 2% to 4%. See "Certain
Relationships and Related Transactions — The Amended
and Restated Technology License Agreement — Fees,
Charges and Costs" for more information.
Under the agency agreement, Novogen acts as our agent to
negotiate and enter into agreements for the conduct of clinical
trials for the glucan product candidates so Novogen can arrange
and negotiate clinical trial agreements in our stead and perform
the obligations on our behalf. We do not expect to incur
significant fees under this agreement.
Pursuant to the services agreement, Novogen provides services
reasonably required by us relating to the development and
commercialization of glucan product candidates.
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 indications for which the clinical data supports
efficacy.
We may choose to seek marketing 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 MG3601 or other glucan product candidates we develop in
certain territories, in which case that partner may take
responsibility for application for marketing 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 MG3601 or other product
candidates we develop using our glucan technology are to be
marketed. Our decision to establish a strategic partnership will
depend on the success of MG3601 or other product candidates we
develop using our glucan technology during the clinical program
and whether we can negotiate favorable terms with potential
partners.
Decisions on both the appropriate territories in which marketing
approval will be sought and the nature of commercialization in
those territories will be made by our board of directors at the
appropriate time and with due regard to maximizing the
commercial benefit to us.
The most significant market for our glucan product candidates 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 drug to have an effective IND.
See " — Regulation — U.S. Regulatory
Approval." MG3601 has not achieved this status and
therefore we have not commenced human 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 marketing approval of
our glucan product candidates in major markets such as the
United States, and/or to allow us to enter into a commercial
relationship with another party.
The key aspects of this program are to:
•
develop new forms of glucan compounds which are active in the
    healing cascade;
•
formulate new product candidates using active glucan compounds;
    and
•
identify the therapeutic applications of new product candidates.
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Table of Contents
Regulation
U.S. Regulatory Approval
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 and animal tests performed under the
    FDA's Good Laboratory Practices regulations to assess
    potential safety and effectiveness;
•
submission and approval of an IND which must become effective
    before clinical trials may begin in the United States;
•
obtaining approval of Institutional Review Boards to protect the
    welfare and rights of human subjects in clinical trials;
•
adequate and well-controlled human clinical trials to establish
    the safety and efficacy of the product in the product's
    intended use;
•
development of manufacturing processes which conform to
    FDA-mandated current Good Manufacturing Practices, or cGMPs;
•
laboratory evaluation of the product's formulation and
    stability; and
•
FDA review and approval of either a Biologics License
    Application, or BLA, or a New Drug Application, or 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
medical 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.
Preclinical 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.
Human clinical trials are typically conducted in three
sequential phases that may overlap:
•
Phase I:
The drug or biologic 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 or biologic is studied in controlled,
    exploratory therapeutic trials in a limited number of subjects
    with the disease or medical condition for which the new drug or
    biologic is intended to be used in order to identify possible
    adverse effects and safety risks, to determine the
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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 or biologic is likely to be
    effective and the drug or biologic 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 that we will successfully complete Phase I,
Phase II, or Phase III testing of our product candidates 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 preclinical studies and clinical 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 a BLA or 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. BLAs are used for products that
are regulated as biologics, and NDAs are used for products that
are regulated as drugs. Before approving a BLA or 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 BLA or 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 a BLA or NDA
is approved, the FDA may impose additional obligations or
restrictions (such as labeling changes), or even suspend or
withdraw 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 BLA
or 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
restriction on indicated uses could have a material adverse
impact on our business.
Each BLA or 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, 2004 for the fiscal year
2005, the user fee for an application requiring clinical data,
such as a BLA or NDA, is $672,000. The FDA adjusts the PDUFA
user fees on an annual basis. PDUFA also imposes an annual
product fee for prescription drugs and biologics ($41,710), and
an annual establishment fee ($262,200) on facilities used to
manufacture prescription drugs and biologics. We are not at the
stage of development with our product candidates 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 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 preclinical or early stage
clinical trials does not assure success in later stage clinical
trials. Data obtained from preclinical and clinical activities
are not always conclusive and may be susceptible to varying
interpretations that could delay, limit, or prevent 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.
The FDCA includes provisions designed to facilitate and expedite
the development and review of drugs and biological products
intended for treatment of serious or life-threatening conditions
that demonstrate the potential to address unmet medical needs
for such conditions. These provisions set forth a procedure for
designation of a drug as a "fast track product." The
fast track designation applies to the
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combination of the product candidate and specific indication for
which it is being studied. A product candidate designated as
fast track is ordinarily eligible for additional programs for
expediting development and review, but product candidates that
are not fast track drug development programs may also be able to
take advantage of these programs. These programs include
priority review of BLAs and NDAs, and accelerated approval. Drug
approval under the accelerated approval regulations may be based
on evidence of clinical effect on a surrogate endpoint that is
reasonably likely to predict clinical benefit. A postmarketing
clinical study will be required to verify clinical benefit, and
other restrictions to assure safe use may be imposed. We cannot
provide you with any assurance as to whether our product
candidates will qualify for fast track status.
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 manufacturing processes or facilities,
product labeling, or other areas require FDA review and
approval. Failure to comply with FDA regulatory requirements may
result in enforcement action by the FDA, including 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.
FDA's policies may change, and additional government
regulations may be enacted that could delay, limit, or prevent
marketing approval of our product candidates 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 product candidates could diminish any
revenues we may be able to generate. Our ability to
commercialize future product candidates will depend in part on
the extent to which coverage and reimbursement for the product
candidates 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.
The labeling, advertising, promotion, marketing and distribution
of a drug or biologic product also must be in compliance with
FDA requirements, which include, among others, standards and
regulations for direct-to-consumer advertising, off-label
promotion, industry sponsored scientific and educational
activities, and promotional activities involving the internet.
The FDA has very broad enforcement authority, and failure to
abide by these regulations can result in penalties, including
the issuance of a Warning Letter directing the company to
correct deviations from regulatory standards and enforcement
actions that can include seizures, injunctions and criminal
prosecution.
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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 Agency (EMEA) leads 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 product candidates 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 member 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 Medicinal Products for Human Use (CHMP) 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 CHMP, 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.
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.
New European Legislation was introduced in 2001 designed to
harmonize the regulation of clinical trials across the EU. This
legislation has now been implemented in all EU countries. In
addition, the entire EU regulatory regime has recently undergone
a significant revision and new laws have been introduced that
amend the current EU Medicines Directive. These amendments are
due to come into effect by October 30, 2005 and are
currently being implemented on a country by country basis.
Accordingly, there is a marked degree of change and uncertainty
both in the regulation of clinical trials and in respect of
marketing authorizations which face us in seeking approval for
our products in Europe.
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, manufactured 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 (usually based on the European
Union requirements) to support the quality, safety and efficacy
of the drug and payment of a fee. Application details are
available on the TGA website http://www.tga.gov.au.
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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 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. 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. 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.
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 independent 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 five working days after the ADEC meeting.
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.
Employees
We do not have any employees. Novogen provides us with staff and
other financial and administrative services under our services
agreement with Novogen. We intend to employ our own general
manager and administrative and other staff sufficient to
implement our research and development program, manufacture our
glucan product candidates and to perform our financial and
administrative functions.
Facilities
We do not own or lease any facility. Novogen provides us with
space for our corporate headquarters. We intend to use a portion
of the net proceeds of this offering to lease office, laboratory
and manufacturing facilities in the United States.
Legal Proceedings
We are not currently a party to any legal proceedings.
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MANAGEMENT
Directors and Executive Officers
The following sets forth information for each of our directors
and executive officers.
Christopher Naughton, age 52, Chairman and Director
Mr. Naughton has been one of our directors since 1999 and
our Chairman since September 2005. Mr. Naughton previously
served as our President from May 1999 to September 2005.
Mr. Naughton has been a director and president and chief
executive officer of Marshall Edwards, Inc., a public company
that is owned 86% by Novogen, since 2000. He also has been the
managing director of Novogen since March 1997. Mr. Naughton
received degrees in Economics from the Australian National
University and in Law from the University of New South Wales. He
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 past 20 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.
Professor Graham E. Kelly BSc(Vet), BVSc, PhD, age 60,
    President, CEO and, Director
Professor Kelly was appointed as our President and CEO in
September 2005. Professor Kelly previously served as our
Chairman from May 1999 to September 2005. Professor Kelly has
been Chairman of Marshall Edwards since 2000. Professor Kelly is
the founder and the first managing director of Novogen Limited.
Professor Kelly was chairman of the Novogen Group from March
1997 until December 31, 2000. Professor Kelly was an
executive director of Novogen from 1994 to September 2005 and is
currently the Phenoxodiol Research Director of Novogen, a
position he has held since 2000. He has spent nearly
30 years in medical research involving drug development,
immunology, surgery and cancer. Professor Kelly was Senior
Research Fellow in Experimental Surgery in the Faculty of
Medicine at the University of Sydney and was appointed an
Adjunct Professor of the University in May 2004. He developed
the
(1
®
3)(1
®
6)-
b
-glucan
and isoflavone intellectual property now owned by the Novogen
Group. Professor Kelly's term as one of our directors
expires in 2005.
Philip A. Johnston, age 58, Director
Mr. Johnston has been one of our directors since September
2005. Mr. Johnston has more than 25 years of
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 is a director of
Marshall Edwards. 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 New
South Wales and the London Business School. Mr. Johnston is
also a director of Lipa Pharmaceuticals Limited.
Mr. Johnston's term as one of our directors expires in
2007.
David R. Seaton, age 50, Chief Financial Officer,
    Secretary and Director
Mr. Seaton has been our Chief Financial Officer, Secretary
and one of our directors since September 2005. Mr. Seaton
has been the chief financial officer of Novogen since September
1999 and has been the chief financial officer and secretary of
Marshall Edwards 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, Duke University
and at the London Business School. He has 20 years of
experience in the pharmaceutical industry. Prior to
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joining Novogen in 1999. Mr. Seaton was the finance
director of GlaxoWellcome Australia Limited from 1995 to 1999.
Mr. Seaton's term as one of our directors expires in
2007.
Corporate Governance
Board of Directors
Our board of directors has responsibility for our overall
corporate governance and meets regularly throughout the year.
Two of our four 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 four
times each year. The Audit 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                     (chairman),                     and                     ,
all of whom are independent as defined by applicable Nasdaq and
SEC
rules.                     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                     (Chairman),                     and                     .
Director and Executive Compensation
Directors
Our directors receive directors fees of
$           per
annum from us.
Executive Officers
Our executive officers, Christopher Naughton, Graham Kelly and
David Seaton, are also executive officers of Novogen and to date
have not received 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.
Equity Compensation Plan
Prior to the completion of this offering we will adopt an equity
compensation plan, which we refer to as the Plan, and submit the
equity compensation plan to our stockholders for approval. The
Plan generally is to be administered by the remuneration
committee of our board of directors, except that the full board
may act at any time to administer the plan, and authority to
administer any aspect of the Plan may be delegated to an
executive officer or any other person. The Plan allows the plan
administrator to grant awards of shares of our common stock or
the right to receive or purchase shares of our common stock
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(including options to purchase common stock, restricted stock
and stock units, bonus stock, performance stock, and stock
appreciation rights) to our employees, directors, individuals
who are employees of any entity controlled by, or in control of,
us or other persons or entities providing significant services
to us or any entity controlled by, or in control of, us and
further provides the plan administrator the authority to reprice
outstanding stock options or other awards. The actual terms of
an award, including the number of shares of common stock
relating to the award, any exercise or purchase price, any
vesting, forfeiture or transfer restrictions, the time or times
of exercisability for, or delivery of, shares of common stock,
are to be determined by the plan administrator and set forth in
a written award agreement with the participant.
The aggregate number of shares of our common stock for which
awards may be granted under the Plan cannot
exceed           %
of the number of shares of our common stock issued and
outstanding at the time any award is granted. Awards made under
the Plan that have been forfeited (including our repurchase of
shares of common stock subject to an award for the price, if
any, paid to us for such shares of common stock, or for their
par value), cancelled or have expired, will not be treated as
having been granted for purposes of the preceding sentence.
The Plan permits the plan administrator to make an equitable
adjustment to the number, kind and exercise price per share of
awards in the event of our recapitalization, reorganization,
merger, spin-off, share exchange, dividend of common stock,
liquidation, dissolution or other similar transaction or events.
In addition, the plan administrator may make adjustments in the
terms and conditions of any awards in recognition of any unusual
or nonrecurring events. Our board of directors may, at any time,
alter, amend, suspend or discontinue the Plan. The Plan will
automatically terminate ten years after it has been approved by
our stockholders.
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BENEFICIAL OWNERSHIP OF COMMON STOCK
None of our directors or executive officers owns any shares of
our capital stock. The following table sets forth information
known to us with respect to the beneficial ownership of our
common stock by each stockholder known by us to own beneficially
more than five percent of our common stock as of August 31,
2005, and as adjusted to reflect the sale of common stock
offered hereby.
Beneficial ownership is determined in accordance with the rules
of the Securities and Exchange Commission. In computing the
number of shares beneficially owned by a person and the
percentage ownership of that person, shares of common stock
subject to options or warrants held by that person that are
currently exercisable or exercisable within 60 days of
August 31, 2005 are deemed outstanding, but are not deemed
outstanding for computing the percentage ownership of any other
person. To our knowledge, except as set forth in the footnotes
to this table, each person named in the table has sole voting
and investment power with respect to the shares set forth
opposite such person's name.
Percentage of
Number Beneficially
Shares Beneficially
Percentage of Shares
Name and Address of
Owned Before and
Owned Before this
Beneficially Owned
Beneficial Owner
After this Offering
Offering
After this Offering
Novogen Limited
2,005,000
(1)
84.3
%
%
140 Wicks Road
North Ryde 2113
Australia
El Coronado Holdings, LLC
237,778
10.0
%
%
12626 E. Turkey Creek Road
Pearce, Arizona 85625
(1)
Includes 2,000,000 shares held by Novogen, Inc., a wholly-owned
    subsidiary of Novogen Limited.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our agreements with Novogen 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 Technology License Agreement
Novogen Research Pty Limited has granted us an exclusive,
worldwide, non-transferable license to use and exploit the
glucan technology, which includes glucan patent rights, know-how
and any developments in relation to the patent rights and
know-how, solely in the fields of:
•
therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;
•
treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;
•
prevention and treatment of ultraviolet light induced skin
    damage in humans;
•
treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;
•
joint repair, particularly with artificial joints in humans; and
•
treatment of poorly healing surgically dissected or transected
    tissue in humans.
The license is exclusive until the expiration or lapsing of the
last relevant Novogen patents or patent applications in the
world, which we expect will be no earlier than March 13,
2016. The license grants us the right to: (i) make, use,
reproduce, market, distribute, sell, hire or otherwise dispose
of the licensed glucan product candidates and inventions,
(ii) modify, enhance, create derivative works based on and
further develop the glucan patents, (iii) keep, use,
reproduce and make adaptations of the glucan material provided
to us by Novogen and (iv) use any methods or processes
forming part of the glucan technology to do any of the foregoing.
Each party must immediately disclose to the other party
developments, improvements, enhancements or new know-how which
are made or acquired by either party in relation to the glucan
product candidates. Under the agreement, we assign to Novogen
our entire right, title and interest in all intellectual
property rights associated with any developments and further
know-how relating to the glucan technology. These developments
are automatically licensed back to us under the technology
license agreement.
We may not sub-license without the prior written consent of
Novogen. In addition, any proposed sub-contractors and agents
must first agree in writing to comply with certain
confidentiality obligations and to assign to us all intellectual
property rights in the fields specified in the technology
license agreement created or acquired by them in the course of
their engagement. Under the technology license agreement we are
required to assign these developments to Novogen and these
developments are then automatically licensed back to us.
Marketing and Exploitation
We may use, market and exploit the glucan product candidates in
the fields specified in the technology license agreement. We are
required to use diligent efforts to identify major markets for
commercial exploitation of the licensed product candidates,
further develop the licensed product candidates towards
commercialization, pursue opportunities in major markets,
promote, market and exploit the licensed product candidates in
major markets and otherwise maximize commercialization income.
Under the technology license agreement, diligent efforts means
the level of efforts required to carry out the obligations in a
sustained manner consistent with the efforts a reasonable person
in the same position as us
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devotes to a product of high market potential, profit potential
or strategic value based on conditions then prevailing. Diligent
efforts require that we:
•
promptly assign responsibility for obligations to specific
    employees who are held accountable for progress and monitor such
    progress on an on-going basis;
•
set and consistently seek to achieve specific and meaningful
    objectives for carrying out such obligations; and
•
consistently make and implement decisions and allocate resources
    designed to advance progress in order to fulfill such
    obligations.
We must conduct any marketing and commercialization activities
on a commercially reasonable basis in compliance with applicable
laws and regulations.
Fees, Charges and Costs
Under the technology license agreement, we are required to pay
Novogen royalties in the amount of 2% of any gross income
received in connection with the sale, distribution, production,
licensing, marketing or other commercialization of the licensed
products remaining after the deduction of all costs and expenses
incurred by us in marketing and commercialization, research and
development, and business expenses. In addition, if our
manufacturing license and supply agreement is terminated by us
without cause, under the technology license agreement the
royalty rate is increased to 4% of any gross income received in
connection with the sale, distribution, production, licensing,
marketing or other commercialization of the licensed products
remaining after the deduction of all costs and expenses incurred
by us in marketing and commercialization, research and
development, and business expenses. We are also required to pay
all of the expense relating to the filing, prosecution and
maintenance of our licensed patent rights. In fiscal year 2005,
we were only required to pay 50% of these costs.
For the fiscal year ended June 30, 2005 we have included an
aggregate of $36,000, representing the cost of patent renewals,
as an expense in the statements of operations. No costs were
incurred under the technology license agreement in the fiscal
year ended June 30, 2004.
Confidentiality
We are required to keep and maintain all confidential
information strictly confidential and can use the confidential
information only for the purposes for which it is disclosed to
us. We may not disclose any confidential information, unless
required by law, other than to our employees, authorized
sub-contractors, legal advisers, auditors or other consultants
requiring the information for the purposes of the technology
license agreement upon those persons undertaking to us to keep
that information strictly confidential.
Termination
Novogen may terminate the agreement if we commit a breach of any
term of the agreement which is not remedied within 21 days
of written notice from Novogen requiring the breach to be
remedied. Novogen may also terminate the agreement if we become
the subject of certain bankruptcy proceedings or if a change in
control occurs without the consent of Novogen. A "change in
control" means the acquisition by a person or group other
than Novogen of more than 50% of the combined voting power of
the then outstanding securities entitled to vote generally in
the election of our directors or any merger, consolidation,
reorganization, capitalization, tender or exchange offer or any
other transaction with or effecting us as a result of which a
person or group other than our stockholders immediately before
the transaction owns after the transaction more than 50% of the
combined voting power of the then outstanding securities
entitled to vote generally in election of our directors. A
change in control does not include any acquisition as a result
of, or transaction involving, an initial public offering of our
common stock.
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The Amended and Restated Manufacturing License and Supply
Agreement
We have granted to Novogen
Laboratories Pty Limited an exclusive, non-transferable
sub-license of the intellectual property rights granted to us
under the technology license agreement and any intellectual
property rights in manufacturing developments and manufacturing
improvements to make and keep
(1
g
3)(1
g
6)-
ß
-glucan
in its primary manufactured form, supply us with glucan product
and keep, use, reproduce, apply, develop, modify and enhance the
glucan know how, manufacturing improvements and manufacturing
developments for the purposes of making and supplying glucan
product candidates to us. 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.
We intend to use a portion of the net proceeds of this offering
on laboratory equipment and a pilot-scale manufacturing plan in
order to produce clinical trial quantities of our glucan product
candidates. Once we are able to do so, we intend to exercise our
right under the manufacturing license and supply agreement to
terminate the agreement by paying Novogen a termination fee of
$250,000. In the event we elect to terminate the manufacturing
license and supply agreement, the royalty we pay to Novogen
under the technology license agreement will increase from 2% to
4%.
Supply of Glucan Product Candidates
We provide to Novogen rolling quarterly forecasts of our
estimated supply requirements for the glucan product candidates,
and issue purchase orders to Novogen at least eight weeks prior
to any proposed supply date confirming the volume of glucan
product candidates required. Novogen must, within five business
days of receiving the purchase order, confirm the quantity it is
able to supply to fulfill the purchase order. Novogen must then
supply the volume of glucan product candidates it agreed to
supply on the proposed supply date, and must otherwise use all
reasonable endeavors to fulfill the purchase order. Novogen must
manufacture and deliver the glucan product candidate to us at a
port nominated by us. Title to the glucan product candidate does
not pass to us until we have received the product candidates
ordered in the purchase order and retention of title
arrangements apply. We are not obligated to purchase any minimum
amount of glucan product candidates from Novogen.
We must also notify Novogen in writing promptly upon filing any
application to the FDA or equivalent government agency in
another country for marketing approval of any glucan product
candidate and keep Novogen reasonably informed of the progress
of all such applications.
If Novogen materially and persistently fails to supply the
amount of glucan product candidates 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 the glucan product candidate until Novogen
demonstrates that it is able to consistently supply the glucan
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 of Novogen necessary to
enable that manufacture to occur. In addition, at any time we
have the right to give a third party the information and
assistance necessary for that third party to develop a
capability to manufacture and supply us with the quantity of our
glucan product candidates required by us that exceeds the
quantity Novogen is able to supply us, but we must notify
Novogen if we intend to do so.
Fees and Charges
The purchase price for glucan product candidates supplied is the
total costs to Novogen, including raw materials, labor,
manufacturing and overhead, equipment, and any other incidental
costs, plus a mark-up of 50% of that total. The purchase price
may be adjusted quarterly by Novogen by reference to the actual
costs for the preceding quarter. If at any time we do not pay
any amount due to Novogen, Novogen may suspend the supply of
glucan product candidates to us until payment is made. Interest
accrues daily on the outstanding balance of all overdue amounts
payable to Novogen under the manufacturing license and supply
agreement.
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To date, there have been no costs charged by Novogen for the
supply of glucan active material under the terms of the
manufacturing license and supply agreement as the clinical trial
material used in the recent Phase II trial was drawn from excess
supplies manufactured for earlier clinical trials.
Manufacturing Developments and Improvements
Each party must disclose to the other any new developments,
improvements and new know-how relating to the manufacture of the
glucan product candidates 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 disclose
to Novogen all developments, improvements, enhancements,
adaptations and new know-how made or acquired by us during the
term of the agreement.
Each party to the agreement 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 glucan product candidates licensed under
the agreement.
Confidentiality
Novogen is required to keep and maintain all confidential
information strictly confidential and can use the confidential
information only for the purposes for which it is disclosed to
Novogen. Novogen may not disclose any confidential information,
unless required by law, other than to its employees, authorized
sub-contractors, legal advisers, auditors or other consultants
requiring the information for the purposes of the manufacturing
license and supply agreement upon those persons undertaking to
Novogen to keep that information strictly confidential.
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
terminate the agreement immediately if the technology license
agreement expires or is terminated. We may also terminate the
agreement without cause upon 90 days written notice
provided that we pay Novogen an amount equal to $250,000. In the
event we elect to terminate the manufacturing license and supply
agreement, the royalty we pay to Novogen under the technology
license agreement will increase from 2% to 4%. Novogen may also
terminate the agreement immediately if a change in control
occurs without the consent of Novogen. A change in control in
the manufacturing license and supply agreement has the same
meaning as in the technology license agreement
Limitation of Liability
Novogen is not liable, in contract or tort, to compensate us for
any increased costs, economic loss, or special damages. 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 Services Agreement
Novogen has agreed to provide a range of services to us as an
independent contractor, or procure that its subsidiaries provide
those services. These services include providing general
assistance and advice on research and development and
commercializing the human therapeutic or pharmaceutical
compounds in which we may acquire intellectual property rights
in the future.
We intend to employ our own general manager and administrative
and other staff sufficient to implement our research and
development program, manufacture our glucan product candidates
and perform our financial and administrative functions.
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Novogen's obligations under the services agreement 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
for us with the glucan product candidates and with other
compounds in which we have intellectual property rights. In
addition, Novogen provides us with scientific and technical
advice on management of pre-clinical and clinical research
programs undertaken by us and manages such research programs.
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 on a monthly basis 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.
For the fiscal years ended June 30, 2005 and June 30,
2004, we have included an aggregate of $21,000 and $21,000,
respectively, as an expense for services provided by Novogen in
the statements of operations.
Intellectual Property and Confidentiality
All intellectual property rights created or developed by or on
behalf of Novogen and its subsidiaries in the performance of
services vest exclusively in us immediately upon their creation.
We are required to assign to Novogen any developments to the
intellectual property licensed to us under the technology
license agreement. Such developments are then licensed back to
us. Each party also has obligations to the other party to honor
the other's confidential information.
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, or breaches its obligations and
does not cure such breach within 21 days notice. Novogen
may terminate the agreement by written notice if a change in
control occurs without Novogen's written consent. A change
in control in the services agreement has the same meaning as in
the technology license agreement.
The Amended and Restated Agency Agreement
We have appointed Novogen Laboratories Pty Limited as our agent
to negotiate and enter into agreements for the conduct of
clinical trials for the glucan product candidates, so Novogen
can arrange and negotiate clinical trial agreements in our stead
and perform the obligations on our behalf.
Fees and Charges
In exchange for their services, we must pay Novogen all amounts
paid on our behalf under any clinical trial agreements and
reasonable out of pocket expenses, plus an agency fee of 2% of
these total amounts.
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For the fiscal years ended June 30, 2005 and June 30,
2004, we have included an aggregate of $6,000 and $2,000,
respectively, representing the net amount of agency fees, as an
expense in the statements of operations.
Intellectual Property
All intellectual property rights created or developed by or on
behalf of Novogen and its subsidiaries in the performance of
services under the agency agreement vest exclusively in us
immediately upon their creation. We are required to assign to
Novogen any developments to the intellectual property licensed
to us under the technology license agreement. Such developments
are then licensed back to us.
Confidentiality
Novogen is required to keep and maintain all confidential
information strictly confidential and can use the confidential
information only for the purposes for which it is disclosed to
Novogen. Novogen may not disclose any confidential information,
unless required by law, other than to its employees, authorized
sub-contractors, legal advisers, auditors or other consultants
requiring the information for the purposes of the manufacturing
license and supply agreement upon those persons undertaking to
Novogen to keep that information strictly confidential.
Limitation of Liability and Indemnity
Novogen is not liable, in contract or tort, to compensate us for
any increased costs, economic loss, or special damages. We also
have indemnified Novogen and its employees for any breach of a
clinical trial agreement, for any personal injury or death of a
person arising out of or relating to a clinical trial or the
administration of a glucan product, for the sale, distribution
or other commercialization or exploitation of glucan product
candidates or any packaging, marketing, advertisement or
promotion of glucan product candidates.
Termination
We may terminate our rights and obligations under the agency
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, or breaches its obligations and
does not cure such breach within 21 days notice. Novogen
may also terminate the agreement if a change in control occurs
without Novogen's written consent. A change in control in
the agency agreement has the same meaning as in the technology
license agreement.
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DESCRIPTION OF OUR SECURITIES
The 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.
There will be no trading market for the common stock units. The
common stock and warrants comprising the units will separate
immediately upon completion of this offering and prior to any
trading of the common stock and warrants.
Description of our Capital Stock
Upon the closing of this offering, our authorized capital stock,
after giving effect to the amendment and restatement of our
certificate of incorporation, will consist
of                      million
shares of common
stock,                     par
value,
and                      million
shares of preferred
stock,                     par
value. The following description summarizes the most important
terms of our capital stock. Because it is only a summary, it
does not contain all the information that may be important to
you. For a complete description you should refer to our
certificate of incorporation and bylaws, effective upon
completion of this offering, copies of which have been filed as
exhibits to the registration statement of which the prospectus
forms a part.
Common Stock
As of August 31, 2005, there were 2,377,778 shares of
common stock outstanding held by approximately 16 stockholders
of record. Novogen and its other subsidiaries own approximately
84.3% of our current outstanding capital stock. After this
offering, there will
be                      shares
of our common stock outstanding,
or                     shares
if the underwriter exercises its over-allotment option in full.
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 stockholders. Therefore, the board without the
approval of the stockholders 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 common stock 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.
Registration Rights
We and one of the holders of our common stock, El Coronado
Holdings, LLC, have entered into a registration rights
agreement, dated April 11, 2005 under which we have agreed
to provide this holder with certain customary piggyback
registration rights with respect to the shares of common stock
it holds. Registration of these shares under the Securities Act
would result in these shares, unless the holder is deemed an
affiliate of ours, becoming freely tradable without restriction
under the Securities Act. The holder has waived its registration
rights in connection with this offering.
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Transfer Agent
Our transfer agent
is                     .
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           %
of the initial public offering price set forth on the cover of
this prospectus. The warrants are immediately exercisable and
will
expire                      years
after the date they are issued. The expiration date may not be
extended without an amendment to the warrant agreement by us and
the warrant agent. 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 do not have any right
to call or otherwise redeem the warrants.
We have authorized and reserved for issuance all shares of
common stock issuable upon exercise of each warrant.
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.
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 stockholders. 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.
Warrant Agent
Our warrant agent
is                     .
Summary of our Amended and Restated Bylaws and Amended and
Restated Certificate of Incorporation and certain Provisions of
the Delaware General Corporation Law (DGCL)
The following is a summary of the terms and provisions of our
certificate of incorporation and bylaws that will be in effect
upon completion of this offering. Reference should be made to
our certificate of incorporation and our bylaws, effective upon
completion of this offering, and to applicable law for the
complete description.
Meetings of Stockholders and Voting
Our bylaws 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 bylaws 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
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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 bylaws provide that the
number of directors will be set by resolution of the board, but
shall be between two and nine. We currently have four directors.
Under our certificate of incorporation and bylaws, 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 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. This
classified board provision could discourage a third party from
making a tender offer for our shares or attempting to obtain
control of our company. It could also delay stockholders who do
not agree with the policies of the board of directors from
removing a majority of the board of directors for two years.
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 appointed shall
serve for the remainder of the full term of the class of
directors in which the vacancy occurred.
Blank Check Preferred Stock
Our certificate of incorporation provides our board of directors
with the authority, without any further vote or action by our
stockholders, to issue shares of preferred stock with terms and
preferences determined by our board. Our board of directors may
issue shares of preferred stock on terms calculated to
discourage, delay or prevent a change of control of our company
or the removal of our management.
Amendments of the Bylaws
Our bylaws provide that the power to amend the bylaws will vest
in the directors, subject to the reserved power of the
stockholders to amend or repeal any bylaws 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 submitted 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.
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To supplement the general indemnification right contained in our
certificate of incorporation, the bylaws provide for the
specific indemnification rights permitted by Section 145
(as described above). The bylaws 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 stockholders 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.
Transactions and Corporate Opportunities
Under our certificate of incorporation, we are subject to
certain provisions that 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 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
opportunities were 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 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.
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SECURITIES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, there will
be           shares
(                    shares
if the over-allotment option is exercised in full) of our common
stock outstanding. Of the shares which will be outstanding after
the offering:
•
shares
    will be "restricted securities" held by non-affiliates;
•
shares
    will be "restricted securities" held by affiliates; and
•
shares
    will be held by Novogen.
"Restricted securities" are securities that were
originally sold in offerings that were not registered under the
Securities Act. These restricted shares may only be sold through
registration under the Securities Act or under an available
exemption from registration, such as provided through
Rule 144.
Novogen and El Coronado Holdings, LLC have entered into lock-up
agreements pursuant to which they have agreed, subject to
limited exceptions, not to offer or sell any shares of common
stock or securities convertible into or exchangeable or
exercisable for shares of common stock for a period of
180 days from the effective date of the registration
statement of which this prospectus forms a part without the
prior written consent of Janney Montgomery Scott LLC. See
"Underwriting." After the 180-day lock-up period,
these shares may be sold, subject to applicable securities laws.
Notwithstanding the foregoing, if the expiration of the lock-up
period occurs within 17 days following an earnings release
by us or the occurrence of material news or a material event
related to us, or if we intend to issue an earnings release
within 16 days following the expiration of the lock-up
period, the lock-up period will be extended to the 18th day
following such earnings release or the occurrence of the
material news or material even unless such extension is waived
by the underwriter.
After this offering, the holders of
approximately                      shares
of our common stock will be entitled to registration rights. For
more information on these registration rights, see
"Description of Capital Stock — Registration
Rights."
In general, under Rule 144, as currently in effect, a
person (or persons whose shares are aggregated), including an
affiliate, who has beneficially owned shares of our common stock
for one year or more, may sell in the open market 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                      shares
    immediately after this offering); or;
•
the average weekly trading volume in the common stock on the
    Nasdaq National Market during the four calendar weeks preceding
    the sale.
Sales under Rule 144 are also subject to certain
limitations on the manner of sale, notice requirements and the
availability of current public information concerning us and may
not commence until 90 days after completion of this
offering. A person (or persons whose shares are aggregated) who
is deemed not to have been our affiliate at any time during the
90 days preceding a sale by him or her and who has
beneficially owned his or her shares for at least two years, may
sell the shares in the public market under Rule 144(k)
without regard to the volume limitations, manner of sale
provisions, notice requirements or the availability of current
public information we refer to above.
Subject to the lock-up agreements, the shares of our common
stock that will become eligible for sale pursuant to
Rule 144 or Rule 701 under the Securities Act are as
follows:
•
shares
    will be immediately eligible for sale in the public market
    without registration pursuant to Rule 144(k); and
•
shares
    will be eligible for sale in the public market under
    Rule 144 or Rule 701 beginning 90 days after
    completion of this offering, subject to volume, manner of sale,
    and other limitations under those rules.
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Upon completion of this offering, we intend to file a
registration statement on Form S-8 under the Securities Act
to register shares of common stock reserved for issuance under
our Equity Compensation Plan. Persons who are not affiliates,
and who receive shares that are registered under this
registration statement, will be able to resell those shares in
the public market without restriction under the Securities Act.
This registration statement will become effective immediately
upon filing.
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UNDERWRITING
We are offering the common stock units described in this
prospectus by means of an underwritten public offering. We have
entered into a firm commitment underwriting agreement with
Janney Montgomery Scott LLC as underwriter. Subject to the terms
and conditions of the underwriting agreement, we have agreed to
sell to the underwriter, and the underwriter has agreed to
purchase,                     common
stock units.
The underwriting agreement is subject to a number of terms and
conditions and provides that the underwriter must buy all of the
common stock units if it buys any of them. The underwriter will
sell the units to the public when and if the underwriter buys
the units from us.
The underwriter initially will offer the common stock units to
the public at the price specified on the cover page of this
prospectus. The underwriter may allow a concession of not more
than
$           per
unit to selected dealers. If all the common stock units are not
sold at the public offering price, the underwriter may change
the public offering price and the other selling terms. The
common stock units are offered subject to a number of
conditions, including:
•
receipt and acceptance of the common stock and warrants by the
    underwriter; and
•
the underwriter's right to reject orders in whole or in
    part.
Over-Allotment Option.
We have granted the underwriter an
over-allotment option to buy up
to                     additional
common stock units at the same price per unit as they are paying
for the common stock units described above. These additional
common stock units would cover sales of common stock units by
the underwriter that exceed the total number of common stock
units described above. The underwriter may exercise this option
at any time within 30 days after the date of this
prospectus. If purchased, the additional common stock units will
be sold by the underwriter on the same terms as those on which
the other common stock units are sold. We will pay the expenses
associated with the exercise of this option.
Discount and Commissions.
The following table shows the
per share and total underwriting discounts and commissions to be
paid to the underwriter by us. These amounts are shown assuming
no exercise and full exercise of the underwriters' option
to purchase additional common stock units.
Paid by Us
No Exercise
Full Exercise
Per unit
Total
We estimate that the expenses of the offering to be paid by us,
not including underwriting discounts and commissions, will be
approximately
$                    .
Listing.
We are applying to have our common stock and
warrants approved for quotation on the Nasdaq National Market
under the symbols "GLTX" and "GLTXW,"
respectively.
Stabilization.
In connection with this offering, the
underwriter may engage in activities that stabilize, maintain or
otherwise affect the price of our common stock or warrants,
including:
•
stabilizing transactions;
•
short sales;
•
syndicate covering transactions; and
•
purchases to cover positions created by short sales.
Stabilizing transactions consist of bids or purchases made for
the purpose of preventing or retarding a decline in the market
price of our common stock or warrants while this offering is in
progress. Stabilizing transactions may include making short
sales of our common stock or warrants, which involves the sale by
63
Table of Contents
the underwriter of a greater number of shares of common stock or
warrants than they are required to purchase in this offering,
and purchasing shares of common stock or warrants from us or on
the open market to cover positions created by short sales. Short
sales may be "covered" shorts, which are short
positions in an amount not greater than the underwriter's
over-allotment option referred to above, or may be
"naked" shorts, which are short positions in excess of
that amount. Syndicate covering transactions involve purchases
of our common stock or warrants in the open market after the
distribution has been completed in order to cover syndicate
short positions.
The underwriter may close out any covered short position either
by exercising its over-allotment option, in whole or in part, or
by purchasing shares of common stock or warrants in the open
market. In making this determination, the underwriter will
consider, among other things, the price of shares of common
stock or warrants available for purchase in the open market
compared to the price at which the underwriter may purchase
common stock units through the over-allotment option.
A naked short position is more likely to be created if the
underwriter is concerned that there may be downward pressure on
the price of the common stock or warrants in the open market
that could adversely affect investors who purchased common stock
units in this offering. To the extent that the underwriter
creates a naked short position, it will purchase shares of
common stock or warrants in the open market to cover the
position.
These activities may have the effect of raising or maintaining
the market price of our common stock or warrants or preventing
or retarding a decline in the market price of our common stock
or warrants. As a result of these activities, the price of our
common stock or warrants may be higher than the price that
otherwise might exist in the open market. If the underwriter
commences the activities, it may discontinue them at any time.
The underwriter may carry out these transactions on the Nasdaq
National Market, in the over-the-counter market or otherwise.
In connection with this offering, the underwriter and any
selling group members who are qualified market makers on the
Nasdaq National Market may engage in passive market making
transactions in our common stock or warrants on the Nasdaq
National Market. Passive market making is allowed during the
period when the SEC's rules would otherwise prohibit market
activity by the underwriter and dealers who are participating in
this offering. Passive market making may occur during the
business day before the pricing of this offering, before the
commencement of offers or sales of the common stock units. A
passive market maker must comply with applicable volume and
price limitations and must be identified as a passive market
maker. In general, a passive market maker must display its bid
at a price not in excess of the highest independent bid for our
common stock or warrants; but if all independent bids are
lowered below the passive market maker's bid, the passive
market maker must also lower its bid once it exceeds specified
purchase limits. Net purchases by a passive market maker on each
day are limited to a specified percentage of the passive market
maker's average daily trading volume in our common stock or
warrants during the specified period and must be discontinued
when that limit is reached. Passive market making may cause the
price of our common stock or warrants to be higher than the
price that otherwise would exist in the open market in the
absence of those transactions. The underwriter and dealers are
not required to engage in passive market making and may end
passive market making activities at any time.
IPO Pricing.
Prior to this offering, there has been no
public market for our common stock or warrants. The initial
public offering price will be negotiated between us and the
underwriter. Among the factors to be considered in these
negotiations are:
•
the history of, and prospects for, our company and the industry
    in which we compete;
•
our past and present financial performance;
•
an assessment of our management;
•
the present state of our development;
•
the prospects for our future earnings;
64
Table of Contents
•
the prevailing conditions of the applicable United States
    securities market at the time of this offering;
•
market valuations of publicly traded companies that we and the
    underwriter believe to be comparable to us; and
•
other factors deemed relevant.
The estimated initial public offering price range set forth on
the cover of this preliminary prospectus is subject to change as
a result of market conditions and other factors.
Lock-up Agreements.
We, Novogen and El Coronado Holdings,
LLC have entered into lock-up agreements with the underwriter.
Under these agreements, subject to exceptions, we may not issue
any new shares of common stock other than the shares of common
stock or options to acquire common stock issued under our Equity
Compensation plan or shares of common stock issuable upon
exercise of the warrants that are included in the Common Stock
Units, and those holders of stock may not, directly or
indirectly, offer, sell, contract to sell, pledge or otherwise
dispose of or hedge any common stock or securities convertible
into or exchangeable for shares of common stock, or publicly
announce the intention to do any of the foregoing, without the
prior written consent of Janney Montgomery Scott LLC for a
period of 180 days from the effective date of the
registration statement of which the prospectus forms a part.
This consent may be given at any time without public notice. In
addition, during this 180-day period, we have also agreed not to
file any registration statement for, and each of our officers
and stockholders has agreed not to make any demand for, or
exercise any right of, the registration of, any shares of common
stock or any securities convertible into or exercisable or
exchangeable for common stock without the prior written consent
of Janney Montgomery Scott LLC. Notwithstanding the foregoing,
if the expiration of the lock-up period occurs within
17 days following an earnings release by us or the
occurrence of material news or a material event related to us,
or if we intend to issue an earnings release within 16 days
following the expiration of the lock-up period, the lock-up
period will be extended to the 18th day following such earnings
release or the occurrence of the material news or material even
unless such extension is waived by the underwriter.
Indemnification.
We will indemnify the underwriter
against some liabilities, including liabilities under the
Securities Act. If we are unable to provide this
indemnification, we will contribute to payments the underwriter
may be required to make in respect of those liabilities.
Conflicts/ Affiliates.
The underwriter and its affiliates
may in the future provide various investment banking, commercial
banking and other financial services for us and our affiliates
for which services they have received, and may in the future
receive, customary fees.
65
Table of Contents
LEGAL MATTERS
The validity of the securities offered hereby will be passed
upon for us by Morgan, Lewis & Bockius LLP, New York, New
York. Certain legal matters will be passed upon for the
underwriter by Dechert LLP, Philadelphia, Pennsylvania.
EXPERTS
The financial statements of Glycotex, Inc. (a development stage
company) at June 30, 2005 and June 30, 2004, and for
the years ended June 30, 2005, June 30, 2004 and
June 30, 2003 and for the period from May 5, 1999
(inception) through June 30, 2005, appearing in this
prospectus and registration statement have been audited by BDO,
independent Registered Public Accounting Firm, as set forth in
their report thereon appearing elsewhere herein.
Such financial statements 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. We do
not intend to use any forms of prospectus other than printed
prospectuses. 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 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 intend to furnish our stockholders with
annual reports containing financial statements audited by our
independent registered public accounting firm.
66
Table of Contents
INDEX TO FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm
F-2
Balance Sheets at June 30, 2005 and 2004
F-3
Statements of Operations for the years ended June 30, 2005,
    2004 and 2003, and the period from May 5, 1999
    (inception) through June 30, 2005
F-4
Statement of Stockholders' Equity
F-5
Statements of Cash Flows for the years ended June 30, 2005,
    2004 and 2003, and the period from May 5, 1999 (inception)
    through June 30, 2005
F-6
Notes to Financial Statements
F-7
F-1
Table of Contents
Report of Independent Registered Public Accounting Firm
The Board of Directors
Glycotex, Inc.
We have audited the accompanying balance sheets of Glycotex,
Inc. (a development stage company) as of June 30, 2004 and
2005, and the related statements of operations,
stockholders' equity, and cash flows for each of the three
years in the period ended June 30, 2005 and for the period
from May 5, 1999 (inception) through June 30,
2005. 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 the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audits included
consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company's internal control over
financial reporting. Accordingly, we express no such opinion. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
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 financial position
of Glycotex, Inc. at June 30, 2004 and 2005, and the
results of its operations and its cash flows for each of the
three years in the period ended June 30, 2005 and the
period from May 5, 1999 (inception) through
June 30, 2005
,
in conformity with accounting
principles generally accepted in the United States of America.
/s/
BDO
BDO
Sydney, NSW, Australia
September 8, 2005
F-2
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
BALANCE SHEETS
June 30,
2005
2004
(In thousands)
ASSETS
Current assets
Cash and cash equivalents
$
4,606
$
240
Total current assets
4,606
240
Total assets
$
4,606
$
240
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
14
$
—
Amount due to related company
100
59
Total current liabilities
114
59
Stockholders' equity:
Preferred stock, $0.01 par value, authorized 100,000 shares,
    none outstanding
—
—
Common stock, $0.00000025 par value, 4,000,000 authorized
    shares; shares issued and outstanding: 2,377,778 at
    June 30, 2005 and 2,050,000 at June 30, 2004
—
—
Additional paid-in capital
5,002
328
Deficit accumulated during development stage
(510
)
(147
)
Total stockholders' equity
4,492
181
Total liabilities and shareholders' equity
$
4,606
$
240
See accompanying notes.
F-3
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Period from
May 5, 1999
Year Ended June 30,
(Inception)
through
2005
2004
2003
June 30, 2005
(In thousands, excepts share and per share data)
Operating expenses:
Research and development
$
(349
)
$
(138
)
$
—
$
(493
)
Selling, general and administrative
(14
)
(3
)
—
(17
)
Total operating expenses
(363
)
(141
)
—
(510
)
Loss from operations
(363
)
(141
)
—
(510
)
Income tax expense
—
—
—
—
Net loss arising during development stage
$
(363
)
$
(141
)
$
—
$
(510
)
Net loss per common share:
Basic and diluted
$
(0.17
)
(0.07
)
$
—
Weighted average common shares outstanding
2,151,103
2,050,000
2,000,073
See accompanying notes.
F-4
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Accumulated
Additional
During
Common
Paid-in
Development
Stock
Capital
Stage
Total
(Shares)
(In thousands)
Balance at June 30, 1999
2,000,000
$
—
$
(6
)
$
(6
)
Net loss arising during development stage
—
—
Balance June 30, 2000
2,000,000
—
(6
)
(6
)
Net loss arising during development stage
—
—
Balance June 30, 2001
2,000,000
—
(6
)
(6
)
Net loss arising during development stage
—
—
Balance at June 30, 2002
2,000,000
—
(6
)
(6
)
Net loss arising during development stage
—
Common stock issued May 5, 2003 (including 100,000 warrants)
50,000
328
—
328
Balance at June 30, 2003
2,050,000
328
(6
)
322
Net loss arising during development stage
(141
)
(141
)
Balance at June 30, 2004
2,050,000
328
(147
)
181
Net loss arising during development stage
(363
)
(363
)
Common stock issued upon conversion of warrants
90,000
672
672
Common stock issued April 11, 2005
237,778
4,002
4,002
Balance at June 30, 2005
2,377,778
$
5,002
$
(510
)
$
4,492
On March 18, 2003, we effected a common stock split whereby
the 50 outstanding shares of common stock were reclassified
and converted into 2,000,000 shares of common stock.
See accompanying notes.
F-5
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Period from
May 5, 1999
Year Ended June 30,
(Inception)
through
2005
2004
2003
June 30, 2005
(In thousands)
Operating activities
Net loss arising during development stage
$
(363
)
$
(141
)
$
—
$
(510
)
Adjustments to reconcile net loss to net cash (used in) provided
    by operating activities:
Changes in operating assets and liabilities:
Accounts payable
14
—
—
14
Amounts due to related company
41
53
—
100
Net cash used in operating activities
(308
)
(396
)
—
(396
)
Financing activities
Net proceeds from issuance of common stock
4,674
—
328
5,002
Net cash provided by financing activities
4,674
—
328
5,002
Net increase (decrease) in cash and cash equivalents
4,366
(88
)
328
4,606
Cash and cash equivalents at beginning of period
240
328
—
—
Cash and cash equivalents at end of period
$
4,606
$
240
$
328
$
4,606
See accompanying notes.
F-6
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 2005
1.
Organization and Basis of Preparation of Financial
    Statements
Glycotex, Inc. (the "Company"), a subsidiary of
Novogen Limited ("Novogen"), is a development stage
company incorporated in May 1999 that commenced operations in
May 2003 coinciding with an initial private placement of 50,000
shares of the Company's common stock to Australian and
international investors and institutions. The shares were issued
at $A10.00 (approximately $6.56) each with attaching warrants to
purchase a further two shares at an exercise price of $A10.00
(approximately $7.47) per share. The attaching options were
exercisable prior to November 5, 2004. Novogen also issued
to these investors a convertible security enabling investors to
convert their investment in Glycotex, Inc. to Novogen shares at
an equivalent Novogen share price of $A5.00 (approximately
$3.28) per share. Proceeds of this placement were $A500,000
(approximately $328,000) in the aggregate.
During November 2004, the Company received a total of $A900,000
(approximately $672,000) following the exercise of 90,000
warrants at an exercise price of $A10.00 (approximately $7.47)
per share. The warrants were issued as part of the initial
private placement. Also, in November 2004, Novogen issued 10,000
of its shares following the conversion of 5,000 of the
Company's shares under the terms of the Novogen convertible
security.
In April 2005 the Company issued a further 237,778 shares of
common stock in a private placement to a U.S. investor. The
shares were issued at $16.83 per share. The proceeds of the
placement were $4,001,804 in the aggregate. After giving effect
to the above transactions, Novogen owns approximately 84.3% of
the Company's issued and outstanding capital stock.
Novogen's subsidiary, Novogen Research Pty Limited, has
granted the Company an exclusive, worldwide, non-transferable
license to use and exploit the glucan technology, which includes
glucan patent rights, know-how and any developments in relation
to the patent rights and know-how, solely in the fields of:
•
therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;
•
treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;
•
prevention and treatment of ultraviolet light induced skin
    damage in humans;
•
treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;
•
joint repair, particularly with artificial joints in humans; and
•
treatment of poorly healing surgically dissected or transected
    tissue in humans.
The license is exclusive until the expiration or lapsing of the
last relevant Novogen patents or patent applications in the
world, which the Company expects will be no earlier than
March 13, 2016. The license grants the Company the right
to: (i) make, use, reproduce, market, distribute,
sell, hire or otherwise dispose of the licensed glucan product
candidates and inventions, (ii) modify, enhance, create
derivative works based on and further develop the glucan
patents, (iii) keep, use, reproduce and make adaptations of
the glucan material provided to the Company by Novogen and
(iv) use any methods or processes forming part of the
glucan technology to do any of the foregoing.
The Company's initial business focus is to continue the
clinical program currently underway for the development and
commercialization of MG3601 for the treatment of chronic venous
ulcers.
F-7
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS — (Continued)
2.
Accounting Policies
Estimates
The preparation of the 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.
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.
Research and Development Expenses
Research and development expenses relate primarily to the cost
of conducting human clinical trials of glucan product
candidates. Research and development costs are charged to
expense as incurred. Research and development expenses consist
mainly of clinical trial expenditures, payments to Novogen for
research and support services under the terms of the services
agreement and the cost of glucan product candidates used in the
clinical trials supplied by Novogen under the terms of the
manufacturing license and supply agreement.
License Fees
Costs incurred related to the acquisition or licensing of
products that have not yet received regulatory approval to be
marketed, or that are not commercially viable and ready for use
or have no alternative future use, are charged to earnings in
the period incurred.
Equity Compensation
The Company's equity compensation plan provides for the
grant of equity based awards to the Company's employees,
directors, individuals who are employees of any entity
controlled by, or in control of, the Company or other persons or
entities providing significant services to the Company or any
entity controlled by, or in control of, the Company. To date no
awards 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
F-8
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS — (Continued)
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 stockholders' equity that are excluded from net
loss. Comprehensive loss for all periods presented has been
reflected in the statement of stockholders' equity.
Recent Accounting Announcements
Share-Based Payments
In December 2004, the FASB Issued Statement of Financial
Accounting Standards No. 123R (Statement 123R),
"Share-Based Payments," the provisions of which become
effective for the Company in fiscal year 2006. This
Statement eliminates the alternative to use
APB No. 25's intrinsic value method of accounting
that was provided in Statement 123 as originally issued.
Statement 123R requires companies to recognize the cost of
employee services received in exchange for awards of equity
instruments based on the grant-date fair value of those awards,
while the fair-value-based method prescribed by
Statement 123R is similar to the fair-value-based method
disclosed under the provisions of Statement 123 in most
respects, there are some differences. The Company's equity
compensation plan provides for the grant of equity awards to the
Company's directors, employees, employees of the
Company's affiliates and certain of the Company's
contractors and consultants. To date no equity awards have been
issued under the plan. Statement 123R is effective for the
Company in fiscal year 2006.
Accounting Changes and Error Corrections
In May 2005, the FASB issued Statement of Financial Accounting
Standards No. 154 (SFAS 154), "Accounting Changes
and Error Corrections," which provides guidance on the
accounting for and reporting of accounting changes and
correction of errors. This statement changes the requirements
for the accounting for and reporting of a change in accounting
principle and applies to all voluntary changes in accounting
principle. It also applies to changes required by an accounting
pronouncement in the unusual instance that the pronouncement
does not include specific transition provisions. This statement
is effective for accounting changes and corrections of errors
made in fiscal years beginning after December 15, 2005. The
Company does not anticipate a material effect upon the adoption
of this statement.
3.
Income Taxes
Loss from operations consists of the following:
Year ended June 30,
2005
2004
2003
(In thousands)
Domestic
$
(363
)
$
(141
)
$
—
$
(363
)
$
(141
)
$
—
F-9
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS — (Continued)
The reconciliation of income tax computed at the U.S. federal
statutory rate to income tax expense attributable to loss
arising during development stage is as follows:
Year ended June 30,
2005
2004
2003
(In thousands)
%
(In thousands)
%
(In thousands)
%
Tax at US statutory rates
$
(127
)
35
$
(49
)
35
$
—
35
Change in valuation allowance
$
127
35
$
49
35
$
—
35
$
—
$
—
$
—
Deferred tax assets are comprised of the following:
Year ended June 30,
2005
2004
2003
(In thousands)
Deferred tax assets
Tax carried forward losses
$
176
$
49
$
—
Total deferred tax assets
176
49
—
Valuation allowance for deferred tax assets
(176
)
(49
)
—
Net deferred tax assets
$
—
$
—
$
—
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, 2005 and 2004. 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.
There was no benefit from income taxes recorded for the period
from May 5, 1999 (inception) to June 30, 2005 due
to the Company's inability to recognize the benefit of net
operating losses. The Company had federal net operating loss
carryforwards of approximately $504,000 and $141,000 at June 30,
2005 and 2004, respectively. The federal net operating losses
will begin to expire in 2022.
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,
2005
2004
2003
(In thousands, except share data)
Numerator
Net loss arising during development stage
$
(363
)
$
(141
)
$
—
Effect of dilutive securities
—
—
Numerator for diluted earnings per share
$
(363
)
$
(141
)
$
—
Denominator
Denominator for basic earnings per share — weighted-average
    shares
2,151,103
2,050,000
2,000,073
Effect of dilutive securities
—
—
—
Adjusted weighted-average shares
2,151,103
2,050,000
2,000,073
F-10
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS — (Continued)
5.
Financial Instruments
The fair value of financial assets and liabilities approximates
their carrying value in the Balance Sheets because they are
short term and at market rates of interest.
6.
Commitments and Contingencies
At June 30, 2005, the Company had contracted to conduct
research and development expenditures of approximately $43,000.
Of the expenditure commitments, clinical trial amounts are based
on the assumption that all patients enrolled in clinical trials
will complete the maximum number of allowed treatment cycles.
The amounts expected to be incurred assuming all treatment
cycles are completed, are as follows.
Payment due by period
less than 1
More than
Contractual Obligations
Total
Year
1-3 Years
3-5 Years
5 Years
(In thousands)
Purchase Obligations
$
43
$
43
$
—
$
—
$
—
Total
$
43
$
43
$
—
$
—
$
—
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.
7.
Segment Information
The Company's focus is to continue the clinical program for
its glucan product candidates. Clinical trials to date have been
conducted in Australia.
Year Ended June 30,
2005
2004
2003
USA
Australia
Total
USA
Australia
Total
USA
Australia
Total
(in thousands)
Statement of Operations
Loss from operations
$
—
$
(363
)
$
(363
)
$
—
$
(141
)
$
(141
)
$
—
$
—
$
—
Net loss arising during development stage
$
—
$
(363
)
$
(363
)
$
—
$
(141
)
$
(141
)
$
—
$
—
$
—
Balance Sheet
Segment assets
$
4,606
$
—
$
4,606
$
240
$
—
$
240
$
328
$
—
$
328
Segment liabilities
$
—
$
114
$
114
$
—
$
59
$
59
$
—
$
6
$
6
8.
Related Party Transactions
The Amended and Restated
Technology License Agreement
Novogen's subsidiary, Novogen Research Pty Limited, has
granted the Company an exclusive, worldwide, non-transferable
license under its patents and patent applications and in its
licensed know-how to use and exploit its glucan technology
solely in the fields of:
•
therapeutic treatment of skin ulceration, including pressure
    sores, bed sores, venous ulcers, diabetic ulcers and burns in
    humans;
F-11
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS — (Continued)
•
treatment of bone fracture and the enhancement of fixation of
    implanted orthopedic devices, including pins, screws and
    artificial joints in humans;
•
prevention and treatment of ultraviolet light induced skin
    damage in humans;
•
treatment of injured connective tissues, including injuries to
    tendons and ligaments, such as sporting injuries, inflammation
    and surgical injury in humans;
•
joint repair, particularly with artificial joints in humans; and
•
treatment of poorly healing surgically dissected or transected
    tissue in humans.
The license is exclusive until the expiration or lapsing of the
last relevant Novogen patents or patent applications in the
world, which the Company expects will be no earlier than
March 13, 2016, and thereafter is non-exclusive for the
remainder of the term of the agreement. The license grants the
Company the right to: (i) make, use, reproduce,
market, distribute, sell, hire or otherwise dispose of the
licensed glucan product candidates and inventions,
(ii) modify, enhance, create derivative works based on and
further develop the glucan patents (iii) keep, use,
reproduce and make adaptations of the glucan material provided
to the Company by Novogen and (iv) use any methods or
processes forming part of the glucan technology to do any of the
foregoing.
Under the Technology License Agreement, the Company is required
to pay Novogen royalties in the amount of 2% of any gross income
received in connection with the sale, distribution, production,
licensing, marketing or other commercialization of the licensed
products remaining after the deduction of all costs and expenses
incurred by the Company in marketing and commercialization,
research and development, and business expenses. In addition, if
the Company's Manufacturing License and Supply Agreement is
terminated by the Company without cause, under the Technology
License Agreement the royalty rate is increased to 4% of any
gross income received in connection with the sale, distribution,
production, licensing, marketing or other commercialization of
the licensed products remaining after the deduction of all costs
and expenses incurred by the Company in marketing and
commercialization, research and development, and business
expenses. The Company is also required to pay all of the expense
relating to the filing, prosecution and maintenance of the
Company's licensed patent rights. In fiscal year 2005, the
Company was only required to pay 50% of these costs.
For the fiscal year ended June 30, 2005, the Company has
included an aggregate of $36,000, representing the cost of
patent renewals, as an expense in the statements of operations.
No costs were incurred under the Technology License Agreement in
the fiscal year ended June 30, 2004.
The Amended and Restated
Manufacturing License and Supply Agreement
Under the terms of the Manufacturing License and Supply
Agreement, Novogen will supply glucan in its primary
manufactured form for the clinical trial development program and
glucan's ultimate commercial use. Novogen will supply
glucan at cost plus a 50% markup. The Company or Novogen may
terminate the agreement under certain circumstances. No amounts
have been charged by Novogen under the terms of the
Manufacturing License and Supply Agreement.
Once the Company is able to construct its own pilot-scale
manufacturing plant, it intends to exercise its right under the
Manufacturing License and Supply Agreement to terminate the
agreement by paying Novogen a termination fee of $250,000. In
the event the Company elects to terminate the Manufacturing
License and Supply Agreement, the royalty the Company pays to
Novogen under the Technology License Agreement will increase
from 2% to 4%.
F-12
Table of Contents
GLYCOTEX, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS — (Continued)
The Amended and Restated
Services Agreement
The Company currently does not directly employ any staff and
Novogen will provide or procure services reasonably required by
the Company relating to the development and commercialization of
the Company's glucan product candidates 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. The Company intends
to employ its own general manager and administrative and other
staff sufficient to implement its research and development
program, manufacture its glucan product candidates and perform
its financial and administrative functions.
For the fiscal years ended June 30, 2005 and June 30,
2004, the Company incurred an aggregate of $21,000 and $21,000
of expenses, respectively, for services provided by Novogen
under the terms of the Services Agreement. No costs were
incurred in the fiscal year ended June 30, 2003.
The Amended and Restated
Agency Agreement
The Company has appointed Novogen Laboratories Pty Limited as
its agent to negotiate and enter into agreements for the conduct
of clinical trials for the glucan product candidates, so Novogen
can arrange and negotiate clinical trial agreements in our stead
and perform the obligations on the Company's behalf.
In exchange for their services, the Company must pay Novogen
Laboratories all amounts paid on behalf of the Company under any
clinical trial agreements and reasonable out of pocket expenses,
plus an agency fee of 2% of these total amounts.
For the fiscal years ended June 30, 2005 and June 30,
2004, the Company incurred an aggregate of $6,000 and $2,000 of
expenses, respectively, representing the net amount of agency
fees to Novogen under the terms of the Agency Agreement. No
costs were incurred in the fiscal year ended June 30, 2003.
F-13
Table of Contents
Common
Stock Units
Glycotex, Inc.
Janney Montgomery Scott
LLC
,
2005
Through and
including                     (the
25th day after the date of this 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 or the shares of common stock and warrants that
comprise the common stock units.
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 of our common stock units from persons who are
residents of such jurisdictions.
Table of Contents
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other Expenses
of Issuance and Distribution.
The following table sets forth the expenses (other than
underwriting compensation expected to be incurred) in connection
with this offering. All of such amounts (except the SEC
registration fee and the NASD filing fee) are estimated.
SEC registration fee
$
10,123
NASDAQ listing fee
*
NASD filing fee
9,100
Blue Sky fees and expenses
*
Printing and engraving costs
*
Legal fees and expenses
*
Accounting fees and expenses
*
Transfer Agent, Warrant Agent and Registrar fees and expenses
*
Miscellaneous
*
Total
$
*
*
To be completed by amendment.
Item 14.
Indemnification
of Directors and Officers.
Our Amended and Restated 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
Amended and Restated Certificate of Incorporation, our Amended
and Restated By-Laws provide for the specific indemnification
rights permitted by Section 145 (as described above). Our
Amended and Restated 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
Amended and Restated Certificate of Incorporation eliminates any
monetary liability of directors to us or our stockholders 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.
II-1
Table of Contents
The Underwriting Agreement, filed as Exhibit 1.1, provides
that the underwriter named therein will indemnify us and hold us
harmless and each of our directors, officers or controlling
persons from and against certain liabilities, including
liabilities under the Securities Act. The Underwriting Agreement
also provides that such underwriter will contribute to certain
liabilities of such persons under the Securities Act.
Item 15.
Recent Sales of
Unregistered Securities.
Within the past three years, we have issued and sold the
following securities which were not registered under the
Securities Act:
1. In April, 2005, we issued to El Coronado Holdings, LLC,
    an accredited investor, an aggregate of 237,778 shares of common
    stock at a purchase price of $16.83 per share for an aggregate
    purchase price of $4,001,804.
No general solicitation was made by either us or any person
    acting on our behalf in connection with the above transaction.
    The certificates for the shares of common stock that have been
    issued contain appropriate legends stating that such securities
    have not been registered under the Securities Act and may not be
    offered or sold absent registration or pursuant to an exemption
    therefrom. No underwriters were involved in the foregoing sales
    of securities. These transactions were exempt from registration
    pursuant to Section 4(2) of the Securities Act.
2. On May 5, 2003, we issued an aggregate of 50,000
    shares of common stock to certain non-U.S. Persons and to
    certain accredited investors at a purchase price of $A10.00
    (approximately $6.56 per share), and warrants to subscribe for
    an additional 100,000 shares of common stock at an exercise
    price of $A10.00 (approximately $7.47 per share).
No general solicitation was made by either us or any person
    acting on our behalf in connection with the above transaction.
    The certificates for the shares of common stock that have been
    issued contain appropriate legends stating that such securities
    have not been registered under the Securities Act and may not be
    offered or sold absent registration or pursuant to an exemption
    therefrom. No underwriters were involved in the foregoing sales
    of securities. These transactions were exempt from registration
    pursuant to Section 4(2) of the Securities Act of 1933 with
    respect to the securities offered and sold to accredited
    investors or Regulation S promulgated under the Securities
    Act of 1933 with respect to the securities offered and sold
    outside the United States to investors who were neither citizens
    nor residents of the United States.
3. In November 2004, we issued an aggregate of 90,000
    shares of common stock upon exercise of 45,000 of the warrants
    that were issued in May 2003. The shares issued upon exercise of
    the warrants are subject to transfer restrictions.
No general solicitation was made by either us or any person
    acting on our behalf in connection with the above transaction.
    The certificates for the shares of common stock that have been
    issued contain appropriate legends stating that such securities
    have not been registered under the Securities Act and may not be
    offered or sold absent registration or pursuant to an exemption
    therefrom. No underwriters were involved in the foregoing sales
    of securities. These transactions were exempt from registration
    pursuant to Section 4(2) of the Securities Act of 1933 with
    respect to the securities offered and sold to accredited
    investors or Regulation S promulgated under the Securities
    Act of 1933 with respect to the securities offered and sold
    outside the United States to investors who were neither citizens
    nor residents of the United States.
II-2
Table of Contents
Item 16.
Exhibits and
Financial Statement Schedules.
(a)
Exhibits.
Exhibit
Number
Exhibit
1.1*
Form of Underwriting Agreement.
3.1*
Form of Amended and Restated Certificate of Incorporation of
    Glycotex, Inc.
3.2*
Form of Amended and Restated Bylaws of Glycotex, Inc.
4.1*
Specimen Common Stock Certificate
4.2*
Warrant Agreement
4.3*
Specimen Warrant Certificate
5.1*
Opinion of Morgan, Lewis & Bockius LLP.
10.1
Amended and Restated Technology License Agreement between
    Novogen Research Pty Limited and Glycotex, Inc.
10.2
Amended and Restated Manufacturing License and Supply Agreement
    between Glycotex, Inc. and Novogen Laboratories Pty Ltd.
10.3
Amended and Restated Services Agreement among Novogen Limited
    and Glycotex, Inc.
10.4
Amended and Restated Agency Agreement between Glycotex, Inc. and
    Novogen Laboratories Pty Ltd.
10.5*
Equity Compensation Plan
23.1
Consent of BDO
23.2*
Consent of Morgan, Lewis & Bockius LLP (contained in
    Exhibit 5.1).
24.1
Powers of Attorney (included on signature page).
*
To be filed by amendment.
(b)
Financial Statement Schedules.
All financial statement schedules have been omitted either
because they are not required, are not applicable, or the
information is otherwise set forth in the financial statements
and notes thereto.
Item 17.
Undertakings
The undersigned registrant hereby undertakes as follows:
(1) 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;
(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;
II-3
Table of Contents
(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.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment 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.
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) To provide to the underwriter at the closing specified
in the Underwriting Agreement share and warrant certificates in
such denominations and registered in such names as required by
the underwriter to permit prompt delivery to each purchaser.
(5) That 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.
(6) That 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.
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.
II-4
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 9, 2005.
Glycotex, Inc.
(Registrant)
By:
/s/
David R. Seaton
Name: David R. Seaton
Title:   Chief Financial Officer and Secretary
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
(including registration statements filed pursuant to
Rule 462(b) under the Securities Act), 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/
Graham E. Kelly
Prof.
    Graham E. Kelly
President and Chief Executive Officer, Director (Principal
    Executive Officer)
September 9, 2005
/s/
David R. Seaton
David
    R. Seaton
Chief Financial Officer and Secretary, Director (Principal
    Financial Officer and Principal Accounting Officer)
September 9, 2005
/s/
Christopher
    Naughton
Christopher
    Naughton
Chairman
September 9, 2005
/s/
Philip A. Johnston
Philip
    A. Johnston
Director
September 9, 2005
II-5