##### 



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
   FORM 10-Q þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2005 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from  to. Commission File Number: 000-50484   Marshall Edwards, Inc.  DELAWARE
(State or other jurisdiction of
incorporation or organization)
    
    51-0407811
(I.R.S. Employer Identification No.)
 140 Wicks Road, North Ryde, NSW, 2113 Australia
(Address of principal executive offices) (Zip Code) (011) 61 2 8877- 6196
Registrants telephone number, including area code:   Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ Noo Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of
the Exchange Act). Yes o No þ As of April 30, 2005 the number of shares outstanding of the issuers common stock, $0.00000002 par
value, was 56,938,000.




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##### 



MARSHALL EDWARDS, INC. INDEX PagePART I FINANCIAL INFORMATIONItem 1: Financial Statements (Unaudited)
    
    
    3Consolidated Balance Sheets as of March 31, 2005 and June 30, 2004
    
    
    3Consolidated Statements of Operations for the three months and nine months ended March 31, 2005 and 2004 and for the period from December 1, 2000 (inception) through March 31, 2005
    
    
    4Consolidated Statements of Cash Flows for the nine months ended March 31, 2005 and 2004 and for the period from December 1, 2000 (inception) through March 31, 2005
    
    
    5Consolidated Statement of Stockholders Equity
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operation
    
    
    14Item 3: Quantitative and Qualitative Disclosures about Market Risk
    
    
    23Item 4: Controls and Procedures
    
    
    24PART II OTHER INFORMATIONItem 2: Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 6: Exhibits and Reports on Form 8-K
    
    
    27SIGNATURES
    
    
    28
 2




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##### 



PART I  FINANCIAL INFORMATION
Item 1: Financial Statements MARSHALL EDWARDS, INC.
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data)
(unaudited) March 31,
    
    
    June 30,2005
    
    
    2004(Note 1)ASSETSCurrent assetsCash and cash equivalents
    
    $
    20,231
    
    
    $
    24,819Prepaid expenses and other current assets
    
    
    270
    
    
    
    30Total current assets
    
    
    20,501
    
    
    
    24,849Total assets
    
    $
    20,501
    
    
    $
    24,849LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable
    
    $
    253
    
    
    $
    192Accrued expenses
    
    
    309
    
    
    
    437Amount due to parent company
    
    
    1,342
    
    
    
    1,278Total current liabilities
    
    
    1,904
    
    
    
    1,907Stockholders equity:Preferred stock, $0.01 par value, authorized 100,000 shares,
none outstanding
    
    
    
    
    
    
    Common stock, $0.00000002 par value, 113,000,000 authorized
shares; shares issued and outstanding: 56,938,000 at
March 31, 2005 and 56,938,000 at June 30, 2004
    
    
    
    
    
    
    Additional paid-in capital
    
    
    34,636
    
    
    
    34,636Deficit accumulated during development stage
    
    
    (16,039
    )
    
    
    (11,694
    )Total stockholders equity
    
    
    18,597
    
    
    
    22,942Total liabilities and stockholders equity
    
    $
    20,501
    
    
    $
    24,849
 See accompanying notes to the consolidated financial statements. 3




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##### 



MARSHALL EDWARDS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited) Period fromDecember 1,2000 (Inception)Three Months Ended
    
    
    Nine Months Ended
    
    
    throughMarch 31,
    
    
    March 31,
    
    
    March 31,2005
    
    
    2004
    
    
    2005
    
    
    2004
    
    
    2005Revenues:Interest and other income
    
    $
    71
    
    
    $
    75
    
    
    $
    202
    
    
    $
    121
    
    
    $
    547Total revenues
    
    
    71
    
    
    
    75
    
    
    
    202
    
    
    
    121
    
    
    
    547Operating expenses:Research and development
    
    
    (494
    )
    
    
    (690
    )
    
    
    (1,476
    )
    
    
    (1,819
    )
    
    
    (5,950
    )License fees
    
    
    (1,000
    )
    
    
    (500
    )
    
    
    (2,000
    )
    
    
    (5,000
    )
    
    
    (8,000
    )Selling, general and administrative
    
    
    (317
    )
    
    
    (426
    )
    
    
    (1,071
    )
    
    
    (639
    )
    
    
    (2,635
    )Total operating expenses
    
    
    (1,811
    )
    
    
    (1,616
    )
    
    
    (4,547
    )
    
    
    (7,458
    )
    
    
    (16,585
    )Loss from operations
    
    
    (1,740
    )
    
    
    (1,541
    )
    
    
    (4,345
    )
    
    
    (7,337
    )
    
    
    (16,038
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Net loss arising during development stage
    
    $
    (1,740
    )
    
    $
    (1,541
    )
    
    $
    (4,345
    )
    
    $
    (7,337
    )
    
    $
    (16,039
    )Net loss per common share:Basic and diluted
    
    $
    (0.03
    )
    
    $
    (0.03
    )
    
    $
    (0.08
    )
    
    $
    (0.14
    )Weighted average common shares outstanding
    
    
    56,938,000
    
    
    
    56,938,000
    
    
    
    56,938,000
    
    
    
    54,098,411
 See accompanying notes to the consolidated financial statements. 4




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##### 



MARSHALL EDWARDS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited) Period fromDecember 1, 2000(Inception)Nine Months Ended
    
    
    throughMarch 31,
    
    
    March 31,2005
    
    
    2004
    
    
    2005Operating activitiesNet loss arising during development stage
    
    $
    (4,345
    )
    
    $
    (7,337
    )
    
    $
    (16,039
    )Adjustments to reconcile net loss to net cash
(used in) provided by operating activities:Changes in operating assets and liabilities:Prepaid expenses and other current assets
    
    
    (240
    )
    
    
    28
    
    
    
    (270
    )Accounts payable
    
    
    61
    
    
    
    (292
    )
    
    
    253Accrued expenses
    
    
    (128
    )
    
    
    162
    
    
    
    309Amounts due to parent company
    
    
    64
    
    
    
    195
    
    
    
    1,342Net cash used in operating activities
    
    
    (4,588
    )
    
    
    (7,244
    )
    
    
    (14,405
    )Financing activitiesProceeds from issuance of Common Stock
    
    
    
    
    
    
    25,577
    
    
    
    38,124Costs in connection with issuance of Common Stock
    
    
    
    
    
    
    
    
    
    
    (3,488
    )Net cash provided by financing activities
    
    
    
    
    
    
    25,577
    
    
    
    34,636Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    (31
    )
    
    
    Net increase (decrease) in cash and cash
equivalents
    
    
    (4,588
    )
    
    
    18,302
    
    
    
    20,231Cash and cash equivalents at beginning of period
    
    
    24,819
    
    
    
    7,244
    
    
    
    Cash and cash equivalents at end of period
    
    $
    20,231
    
    
    $
    25,546
    
    
    $
    20,231Interest paid
    
    
    
    
    
    
    
    
    
    
    Income taxes paid
    
    $
    
    
    
    $
    
    
    
    $
    1
 See accompanying notes to the consolidated financial statements. 5




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##### 



MARSHALL EDWARDS, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
(In thousands, except share data)
(Unaudited) Deficitaccumulated
    
    
    Accumulatedduring
    
    
    otherAdditional paid
    
    
    development
    
    
    comprehensiveCommon Stock
    
    
    in capital
    
    
    stage
    
    
    income/(loss)
    
    
    Total(shares)Balance at June 30, 2004
    
    
    56,938,000
    
    
    $
    34,636
    
    
    $
    (11,694
    )
    
    $
    
    
    
    $
    22,942Net loss arising during development stage
    
    
    
    
    
    
    
    
    
    
    (4,345
    )
    
    
    
    
    
    
    (4,345
    )Comprehensive Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,345
    )Balance at March 31, 2005
    
    
    56,938,000
    
    
    $
    34,636
    
    
    $
    (16,039
    )
    
    $
    
    
    
    $
    18,597
 See accompanying notes to the consolidated financial statements. 6




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##### 



MARSHALL EDWARDS, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 2005 1. Organization and Basis of Preparation of Financial Statements The accompanying financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for complete financial
statements. Marshall Edwards, Inc. (MEI) believes all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included. Operating results for
the three months and nine months ended March 31, 2005 are not necessarily indicative of the results
that may be expected for the year ending June 30, 2005 or any other period. The balance sheet at
June 30, 2004 has been derived from the audited financial statements at that date. The financial
statements and notes should be read in conjunction with the audited financial statements and notes
thereto for the year ended June 30, 2004 which were included in the Companys Annual Report on Form
10-K for the year ended June 30, 2004. MEI is a development stage company incorporated in December 2000 as a wholly-owned subsidiary of
Novogen Limited, an Australian pharmaceutical company. MEI commenced operations in May 2002. MEI,
including its wholly-owned Australian subsidiary, Marshall Edwards Pty Limited (MEPL) (together
the Company) is a pharmaceutical company with a primary focus on the development and
commercialization of drugs for the treatment of cancer. The Company is presently engaged in the
clinical development and commercialization of a drug candidate called phenoxodiol. The Company
intends to develop phenoxodiol for use in a wide range of human cancers. The Company operates
primarily in Australia and the United States. Novogen Limited and certain of its subsidiary companies (collectively Novogen), have granted to
the Company a worldwide, non transferable license under their patents and patent applications and
in their know-how to conduct clinical trials and commercialize and distribute all forms of
delivering phenoxodiol in the field of prevention, treatment and cure of cancer in humans, except
topical applications. In addition, the Company has an exclusive first right and an exclusive last
right to match any proposed dealing by Novogen of its intellectual property rights with a third
party relating to synthetic pharmaceutical compounds (other than phenoxodiol), that have known or
potential applications in the field of prevention, treatment or cure of cancer in humans in all
forms other than topical applications. The Companys initial business focus is to continue the clinical program currently under way for
the development and commercialization of phenoxodiol. In May 2002, the Company sold 2,523,000 shares of its common stock and 2,523,000 warrants, raising
proceeds of $9,022,000, net of $1,070,000 of transaction costs. The warrants 7




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##### 



were exercisable prior to November 30, 2003 at an exercise price of $4.00 per share. The common
stock was listed for trading on the London Stock Exchanges Alternative Investment Market (AIM).
Following the listing, Novogen Limited retained 95.1% of the Companys common stock. In June 2003, 9,000 warrants were exercised, resulting in proceeds to the Company of $36,000. In
November 2003 the remaining 2,514,000 warrants were exercised at an exercise price of $4.00 per
share resulting in proceeds to the Company of $10,056,000. In December 2003, the Company sold 2,392,000 common stock units at a public offering price of $7.50
per unit. Each common stock unit consisted of:  
    one share of common stock; and
    one warrant to purchase a share of common stock, exercisable prior to
December 18, 2006 at an exercise price equal to $9.00. In connection with the December 2003 offering, the Companys common stock and warrants commenced
trading separately on the Nasdaq National Market. The Company received proceeds of $15,522,000, net
of $2,418,000 transaction costs in the December 2003 offering. Following the offering, Novogen
Limited retained 86.9% of the Companys common stock. 2. Accounting Policies Revenue Recognition Interest The only revenue earned to date is interest on cash balances. Principles of Consolidation The consolidated financial statements include the accounts of Marshall Edwards, Inc. and its
wholly-owned subsidiary, Marshall Edwards Pty Limited. Significant intercompany accounts and
transactions have been eliminated on consolidation. Estimates The preparation of the consolidated financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and the accompanying notes. Actual results
could differ from those estimates. Cash and cash equivalents Cash on hand and in banks and short-term deposits are stated at their nominal value. The Company
considers all highly liquid investments with a maturity of three months or less when purchased to
be cash equivalents. Most of the Companys cash is deposited in financial institutions that are
FDIC insured. These deposits are in excess of the FDIC insurance limits. 8




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##### 



Income Taxes Income taxes have been provided for using the liability method in accordance with FASB Statement
No. 109, Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are
recognized and measured using enacted tax rates in effect for the year in which the differences are
expected to be recognized. Valuation allowances are established against the recorded deferred
income tax assets to the extent that management believes that it is more likely than not that a
portion of the deferred income tax assets are not realizable. Fair Value of Financial Instruments The carrying amounts of the Companys financial instruments, including cash and cash equivalents
and accounts payable approximate fair value. Foreign Currency Translation The financial statements of MEPL have been translated into U.S. dollars in accordance with FASB
Statement No. 52, Foreign Currency Translation. Assets and liabilities are translated into U.S.
dollars using the exchange rates in effect at the balance sheet date. Income statement amounts have
been translated using the average exchange rate for the periods. Realized gains and losses from
foreign currency transactions are reflected in the consolidated statements of operations. Translation of Marshall Edwards Pty Limiteds Financial Statements into U.S dollars does not have a
material impact on the Companys financial position. Research and Development Expenses Research and development expenses relate primarily to the cost of conducting human clinical trials
of phenoxodiol. Research and development costs are charged to expense as incurred. Stock-Based Compensation The Companys stock option plan provides for the grant of options to the Companys directors,
employees, employees of the Companys affiliates and certain of the Companys contractors and
consultants. To date no options have been issued under the plan. Basic and Diluted Loss Per Share Basic and diluted earnings or loss per share is calculated in accordance with FASB Statement No.
128, Earnings Per Share. In computing basic earnings or loss per share, the dilutive effect of
stock options are excluded, whereas for diluted earnings per share they are included unless the
effect is anti-dilutive. Since the Company has a loss for all periods presented, diluted and basic
earnings per share are the same. 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 Consolidated 9




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##### 



Statement of Stockholders Equity. 3. Loss Per Share The following table sets forth the computation of basic and diluted net loss per common share: Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2005
    
    
    2004
    
    
    2005
    
    
    2004(In Thousands, except share and per share data)NumeratorNet loss arising during development stage
    
    
    (1,740
    )
    
    
    (1,541
    )
    
    
    (4,345
    )
    
    
    (7,337
    )Effect of dilutive securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Numerator for diluted earnings per share
    
    $
    (1,740
    )
    
    $
    (1,541
    )
    
    $
    (4,345
    )
    
    $
    (7,337
    )DenominatorDenominator for basic earnings per share -
weighted-average shares
    
    
    56,938,000
    
    
    
    56,938,000
    
    
    
    56,938,000
    
    
    
    54,098,411Effect of dilutive securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dilutive potential common shares
    
    
    56,938,000
    
    
    
    56,938,000
    
    
    
    56,938,000
    
    
    
    54,098,411Basic and diluted earnings per share
    
    $
    (0.03
    )
    
    $
    (0.03
    )
    
    $
    (0.08
    )
    
    $
    (0.14
    )
 During the period presented the Company had warrants outstanding that could potentially dilute
basic earnings per share in the future, but were excluded from the computation of diluted net loss
per share as the effect would have been anti-dilutive. Since the Company has a loss for all periods
presented, diluted and basic earnings per share are the same. The outstanding warrants consist of
the following potential common shares: As at March 31,2005
    
    
    2004Common shares issuable upon exercise of
outstanding warrants
    
    
    2,392,000
    
    
    
    2,392,000
 The warrants outstanding at March 31, 2005 have an exercise price of $9.00 per share and are
exercisable prior to December 18, 2006. 4. Expenditure Commitments At March, 31, 2005, the Company had contracted to conduct research and development expenditures of
approximately $1,252,000. 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, assuming all treatment cycles are completed, are expected to
be incurred as follows: 10




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##### 



(In thousands)
    
    
    
    
    
    
    
    
    
    
    Payment due by periodless than 1
    
    
    
    1 - 3
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    
    Total
    
    
    
    Year
    
    
    
    Years
    
    
    
    3 - 5 Years
    
    
    5 YearsPurchase Obligations
    
    
    $
    1,252
    
    
    
    $
    1,252
    
    
    
    $
    
    
    
    
    $
    
    
    
    $
    Total
    
    
    $
    1,252
    
    
    
    $
    1,252
    
    
    
    $
    
    
    
    
    $
    
    
    
    $
    
 No amounts have been included for future payments to Novogen which may arise in connection
with the license agreement, the services agreement or the manufacturing license and supply
agreement as future payments under the terms of the agreements are subject to termination
provisions. Payments in connection with these agreements are detailed in Note 6 Related Party
Transactions 5. Segment Information Three Months Ended
    
    
    Three Months EndedMarch 31, 2005
    
    
    March 31, 2004(In Thousands)USA
    
    
    Australia
    
    
    USA
    
    
    AustraliaLoss from operations
    
    $
    (81
    )
    
    $
    (1,659
    )
    
    $
    (223
    )
    
    $
    (1,318
    )Segment assets at March 31
    
    
    15,175
    
    
    
    5,326
    
    
    
    24,149
    
    
    
    1,411
 Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2005
    
    
    March 31, 2004(In Thousands)USA
    
    
    Australia
    
    
    USA
    
    
    AustraliaLoss from operations
    
    $
    (259
    )
    
    $
    (4,086
    )
    
    $
    (274
    )
    
    $
    (7,063
    )
 6. Related Party Transactions License Agreement The license agreement is an agreement under which Novogens subsidiary, Novogen Research Pty
Limited, grants to MEPL a worldwide non-transferable license under its patents and patent
applications and in its know-how to conduct clinical trials and commercialize and distribute
phenoxodiol products. The agreement covers uses of phenoxodiol in the field of prevention,
treatment or cure of cancer in humans delivered in all forms except topical applications. The
license is exclusive until the expiration or lapsing of the last relevant Novogen patents or patent
applications in the world and thereafter is non-exclusive. MEPL may terminate the agreement by
giving three months notice to Novogen. MEPL paid $5,000,000 to Novogen in February 2004 which was
the first lump sum license fee payment due under the terms of the license agreement. Also, MEPL
paid $2,000,000 to Novogen in January 2005 which was the annual milestone license fee payment due
under the license agreement. Future amounts payable to Novogen under terms of the license agreement
are as follows: 11




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##### 



1. A second lump sum license fee of $5,000,000 is payable to Novogen on November 1, 2003 or such
later date when the cumulative total of all funds received from debt or equity issuances and
revenue received from commercialization (income other than sales) and sales of phenoxodiol products
exceeds $50,000,000. The Company has not yet reached these preconditions for payment. 2. In addition to the amounts above, until the expiration of the exclusivity period of the license,
MEPL must pay Novogen 2.5% of all net sales and 25% of commercialization income. After the
exclusivity period of the license, 1.5% of net sales must be paid to Novogen. 3. In addition to the amounts above, amounts payable for annual milestone license fees under the
license agreement for the calendar years ended December 31 are as follows: Calendar Year2005
    
    $
    4,000,000Each calendar year thereafter during the exclusivity period
    
    $
    8,000,000
 Milestone license fees of $1,000,000 have been accrued in the nine months ended March 31, 2005 in
connection with the annual milestone payment of $4,000,000 due within 30 days following the end of
the calendar year, December 31, 2005. The Company has paid the December 31, 2004 annual milestone
license fee of $2,000,000 due to Novogen at the end of January 2005. License Option Deed The license option deed grants MEPL an exclusive right to accept and an exclusive right to match
any proposed dealing by Novogen of its intellectual property rights with a third party relating to
synthetic compounds (other than phenoxodiol) that have known or potential applications in the field
of prevention, treatment or cure of cancer in humans in all forms other than topical applications. Services Agreement The Company does not currently intend to directly employ any staff. Under the terms of the services
agreement, Novogen Limited or its subsidiaries have agreed to provide services reasonably required
by the Company relating to the development and commercialization of phenoxodiol. Novogen has agreed
to provide these services at cost plus a 10% mark-up. The Company may terminate the agreement on
three months written notice to Novogen. Transactions giving rise to expenditure amounting to $799,000 and $735,000 were made under the
services agreement with Novogen during the nine months ended March 31, 2005 and 2004, respectively.
Of these amounts, $287,000 and $519,000 related to service fees paid to Novogen for research and
development services provided in the nine months ended March 31, 2005 and 2004, respectively,
reflecting reduced time spent by Novogen research staff on the development of phenoxodiol.
Additionally, $512,000 and $216,000 of the total expenditure during the nine months ended March 31,
2005 and 2004 respectively related to costs incurred for administration and accounting services
provided by Novogen. The increase related to compliance with United States securities reporting
requirements. 12




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##### 



At March 31, 2005 and 2004, $101,000 and $93,000, respectively, was due and owing to Novogen under
the services agreement and is included in amounts due to parent company. Manufacturing License and Supply Agreement Under the terms of the manufacturing license and supply agreement, MEPL has granted to one of
Novogens subsidiaries an exclusive, non-transferable sub license to manufacture and supply
phenoxodiol in its primary manufactured form. Novogens subsidiary has agreed to supply phenoxodiol
to MEPL for the clinical trial development program and phenoxodiols ultimate commercial use.
Novogen will supply phenoxodiol at cost plus a 50% markup. Transactions giving rise to expenditure amounting to $372,000 and $640,000 were made under the
manufacturing license and supply agreement with Novogen during the nine months ended March 31, 2005
and 2004, respectively. At March 31, 2005 and 2004, $50,000 and $95,000, respectively, was due and owing to Novogen under
the manufacturing license and supply agreement and is included in amounts due to parent company. 13




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##### 



Item 2:
    Managements Discussion and Analysis of Financial Condition and Results of Operation Special Note Regarding Forward-Looking Statements This quarterly report includes forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended and Section 21E of the Security Exchange Act of 1934, as
amended. All statements other than statements of historical facts contained in this quarterly
report, including statements regarding the 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 the Company, are intended to identify
forward-looking statements. The Company has based these forward-looking statements largely on
current expectations and projections about future events and financial trends that it believes may
affect financial condition, results of operations, business strategy and financial needs. These
forward-looking statements are subject to a number of risks, uncertainties and assumptions,
including, among other things:  
    the Companys inability to obtain any additional required financing or financing
available to the Company on acceptable terms.
    the Companys failure to successfully commercialize its product candidates;
    costs and delays in the development and/or receipt of U.S. Food and Drug
Administration (FDA) or other required governmental approvals, or the failure to
obtain such approvals, for the Companys product candidates;
    uncertainties in clinical trial results and failure to meet regulatory
requirements;
    the Companys 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;
    the Companys inability to protect its patents or proprietary rights and obtain
necessary rights to third party patents and intellectual property to operate its
business;
    the Companys inability to operate its business without infringing the patents
and proprietary rights of others;
    general economic conditions;
    the failure of any products to gain market acceptance;
    technological changes;
    government regulation generally and the receipt of the regulatory approvals; 14




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
    changes in industry practice ; and
    one time events. These risks are not exhaustive. Other sections of this quarterly report may include additional
factors which could adversely impact business and financial performance. In addition, our business
and financial performance may be affected by the factors that are discussed under Risk Factors in
our Annual Report on Form 10-K for the year ended June 30, 2004. Moreover, the Company operates in
a very competitive and rapidly changing environment. You should not rely upon forward-looking
statements as predictions of future events. The Company cannot assure you that the events and
circumstances reflected in the forward-looking statements will be achieved or occur. Although it
believes that the expectations reflected in the forward-looking statements are reasonable, the
Company cannot guarantee future results, levels of activity, performance or achievements. The following discussion is qualified in its entirety by, and should be read in conjunction with,
the more detailed information set forth in the financial statements and the notes thereto appearing
elsewhere in this report. Overview MEI is a development stage company incorporated on December 1, 2000 as a wholly-owned subsidiary of
Novogen. The Company commenced operations in May 2002 and its business purpose is the development
and commercialization of drugs for the treatment of cancer. The Company is presently engaged in the
clinical development of the anti-cancer drug phenoxodiol. Novogens subsidiary has granted to the
Companys subsidiary, a worldwide non-transferable license under its patent right and patent
applications and its relevant know-how to conduct clinical trials and commercialize and distribute
all forms of phenoxodiol for uses in the field of prevention, treatment, and cure of cancer in
humans, except topical applications. Novogen currently owns approximately 86.9% of the outstanding
shares of the Companys common stock. The Companys main focus during fiscal year ended June 30, 2004 and in the nine months to March 31,
2005 was to undertake human clinical testing of phenoxodiol. During the nine months ended March 31,
2005 the Company continued to recruit patients into the existing clinical trial programs. During the nine months ended March 31, 2005 the Company made significant progress in the clinical
development of phenoxodiol. In November 2004, the Company announced preliminary data from the late
stage prostate cancer trial being conducted at multiple sites in Australia. The data showed that
phenoxodiol is biologically active as it reduced or stabilized Prostate Specific Anitgen (PSA)
levels in 8 of 12 patients receiving the drug. Also, in November 2004, the Company announced that the U.S. Food and Drug Administration (FDA) has
granted intravenous (IV) phenoxodiol in combination with pacitaxel or cisplatin fast track status
for its intended use as a chemo-sensitizing agent in patients with recurrent late stage ovarian
cancer that is resistant or refractory to platins and taxanes. In addition, in January 2005 the
Company received fast track designation from the FDA for oral phenoxodiol for prostatic
adenocarcinoma that is refractory to both hormonal and cytotoxic chemotherapy. Under the FDA
Modernization Act of 1997, designation as a fast track product means that phenoxodiol is eligible
for certain accelerated marketing 15




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approval programs. We cannot assure you that we will receive any regulatory approvals. In January 2005, the company announced that it had appointed a global research organization to
manage its planned pivotal phase IIb multinational ovarian cancer study. The trial will be known
as the Ovature trial. The Company is discussing trial design with the FDA to develop a trial
protocol, including the number of treatment arms needed to be completed and the number of patients
required to be tested in each arm that is intended to support marketing approval of phenoxodiol. Under the terms of the Manufacturing License and Supply Agreement, Novogen is responsible for
producing the required amount of phenoxodiol for our clinical program and subsequent commercial
quantities. Novogen is currently undertaking formulation development and manufacturing process
development work for both the IV and oral dose formulations. This work is being conducted to ensure
that there is a robust production process which meets the expected commercial quantities of
phenoxodiol and that both the IV and oral dose formulations are manufactured on a cost effective
basis. During this process Novogen has identified a number of excipients that may be used in the
formulations of phenoxodiol. Excipients, among other things perform the function of a carrier of
the active drug ingredient in the IV formulation. Some of these identified excipients or carriers
may be included in third party patents in some countries. The company will seek a license if it
chooses to use a patented excipient in the marketed IV product or it may choose one of those
excipients that do not have a license requirement. It is anticipated that the formulation and manufacturing process development work will be concluded
during the year ended December 31, 2005. The Company does not employ any staff directly but obtains services from Novogen under a services
agreement. The Company has incurred losses since inception and expects to incur operating losses
and generate negative cash flows from operations for the foreseeable future as it expands research
and development activities and moves phenoxodiol into later stages of development. As of March 31,
2005, the Company had accumulated losses of $16,039,000. The Company has not generated any revenues from operations since inception other than interest on
cash assets. Expenses have consisted primarily of costs associated with conducting the clinical trials of
phenoxodiol and costs incurred under the license agreement, the services agreement and the
manufacturing license and supply agreements with Novogen and its subsidiaries, including the costs
of the clinical trial drug supplies. To date, operations have been funded primarily through the sale of equity securities. The Company expects that quarterly and annual operating results of operations will fluctuate for
the foreseeable future due to several factors including the timing and extent of research and
development efforts and the outcome and extent of clinical trial activities. The Companys limited
operating history makes accurate prediction of future operating results difficult or impossible. Critical Accounting Estimates The preparation of the consolidated financial statements in conformity with accounting 16




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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. Development Expenses Research and development costs incurred since inception through March 31, 2005 aggregate to
$5,950,000. Research and development costs include clinical trial expenses and are expensed as they are
incurred and are expected to increase in the future as the phenoxodiol clinical program progresses. Historical research and development costs and clinical trial costs have not been documented on a
project by project basis. In addition, research and development resources are supplied by Novogen
across several projects. As a result, the costs incurred for each clinical project cannot be stated
precisely on a project by project basis. The Company expects that a large percentage of research and development expenses in the future will
be incurred in support of current and future clinical development programs. 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;
    the end points and analyses required for regulatory approval; and
    the efficacy and safety profile of the product. The Companys strategy also includes the option of entering into collaborative arrangements with
third parties to participate in the development and commercialization of phenoxodiol. 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, the Company is unable to determine the duration of or
completion costs for research and development projects or when and to what extent it will receive
cash inflows from the commercialization and sale of phenoxodiol. The Company intends to continue the clinical development of phenoxodiol and to assess the
opportunity to license other cancer drugs developed by Novogen as the opportunities arise. Clinical Trial Expenses Estimates have been used in determining the expense liability under certain clinical trial
contracts where services have been performed but not yet invoiced. The actual costs of those 17




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services could differ in amount and timing from the estimates used in completing the financial
results. Clinical trial expenses of $257,000 have been accrued at March 31, 2005. These estimates are based
on the number of patients in each trial and the patient treatment cycles completed or milestones
achieved. Clinical research contracts may vary depending on the clinical trial design and protocol. Generally
the costs, and therefore 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. Results of Operations Three Months Ended March 2005 and 2004 The Company recorded a consolidated loss of $1,740,000 and $1,541,000 for the three months ended
March 31, 2005 and 2004, respectively. Revenues:The Company received interest on cash assets and cash equivalents of $71,000 for the
three months ended March 31, 2005 versus $75,000 for the three months ended March 31, 2004. The
decrease was due to the Companys lower cash balances. Research and Development:Research and Development expenses decreased $196,000 to $494,000 for the
three months ended March 31, 2005 compared to $690,000 for the three months ended March 31, 2004.
The decrease was primarily due to a reduction in the R&D service charge from Novogen under the
terms of the services agreement reflecting the lower costs incurred by Novogen and reduced time
spent by Novogen personnel on the development of phenoxodiol as we focus more on the
commercialization. We expect research and development clinical trial expenses to increase in the
future in accordance with the planned clinical trial program. License Fees:Milestone license fees of $1,000,000 have been accrued in the three months ended
March 31, 2005 in connection with the annual milestone license fee of $4,000,000 that is payable to
Novogen, within 30 days, after December 31, 2005 under the terms of the license agreement with
Novogen. Milestone license fees of $500,000 were accrued during the three months ended March 31,
2004 in connection with the annual milestone license fee of $2,000,000 due to Novogen December 31,
2004. The December 31, 2004 milestone license fee of $2,000,000 was paid to Novogen in January
2005. Selling, General and Administrative:Selling, administrative and general expenses decreased by
$109,000 to $317,000 for the three months ended March 31, 2005 compared to $426,000 for the three
months ended March 31, 2004. The decrease was due primarily to a reduction in accrued professional
fees and accrued Nasdaq listing fees. These reductions were partly offset by increased costs
incurred for administration and accounting services provided by Novogen under the terms of the
services agreement. Included in selling, general and administrative expenses are foreign exchange
gains/(losses) which occur when revaluing cash 18




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denominated in foreign currencies and upon consolidation of MEIs wholly owned Australian
subsidiary Marshall Edwards Pty Ltd (MEPL). MEPL uses U.S. dollars as its functional currency and
also engages in transactions in foreign currencies. Further, MEPLs accounts and financial
statements are denominated in Australian dollars. Translation of MEPLs financial statements into
U.S. dollars did not have a material impact on the Companys financial position. Net foreign
exchange gains during the three months ended March 31, 2005 were $35,000 compared with net exchange
losses of $21,000 during the three months ended March 31, 2004. Nine Months Ended March 2005 and 2004 The Company recorded a consolidated loss of $4,345,000 and $7,337,000 for the nine months ended
March 31, 2005 and 2004, respectively. Revenues:The Company received interest on cash assets and cash equivalents of $202,000 for the
nine months ended March 31, 2005 versus $121,000 for the nine months ended March 31, 2004. The
increase was due to the Companys higher cash balances following the Companys December 2003 public
offering. Research and Development:Research and development expenses decreased $343,000 to $1,476,000 for
the nine months ended March 31, 2005 compared to $1,819,000 for the nine months ended March 31,
2004. The decrease was due primarily to a reduction in the amount of phenoxodiol needed for the
current clinical trial program, which is nearing completion and a reduction in the R&D service
charge from Novogen under the terms of the services agreement reflecting the lower costs incurred
by Novogen and reduced time spent by Novogen personnel on the development of phenoxodiol as we
focus more on the commercialization. We expect research and development expenses to increase in
the future in accordance with the planned clinical trial program. License Fees:Milestone license fees of $1,000,000 have been accrued in the nine months ended March
31, 2005 in connection with the annual milestone license fee of $4,000,000 that is payable to
Novogen, within 30 days, after December 31, 2005 under the terms of the license agreement with
Novogen. Milestone license fees of $500,000 were accrued during the nine months ended March 31,
2004 in connection with the annual milestone license fee of $2,000,000 due to Novogen December 31,
2004. The December 31, 2004 milestone license fee of $2,000,000 was paid to Novogen in January
2005. Selling, General and Administrative:Selling, administrative and general expenses increased by
$432,000 to $1,071,000 for the nine months ended March 31, 2005 compared to $639,000 for the nine
months ended March 31, 2004. The increase was due primarily to the increase in costs associated
with professional fees and increased costs incurred for administration and accounting services
provided by Novogen under the terms of the services agreement and other fees relating to compliance
with United States securities reporting requirements and FDA regulations. Included in selling,
general and administrative expenses are foreign exchange gains and (losses) which occur when
revaluing cash denominated in foreign currencies and upon consolidation of MEPL. MEPL has U.S.
dollars as its functional currency and also engages in transactions in foreign currencies. Further,
MEPLs accounts and financial statements are denominated in Australian dollars. Translation of
MEPLs financial statements into U.S. dollars did not have a material impact on the Companys 19




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financial position. Net foreign exchange losses during the nine months ended March 31, 2005 were
$5,000 compared with net exchange gains of $47,000 during the nine months ended March 31, 2004. Liquidity and Capital Resources At March 31, 2005, the Company had cash resources of $20,231,000 compared to $24,819,000 at June
30, 2004. Funds are invested in short term market accounts, pending use. The implementation of the
Companys business plan is dependent on the Companys ability to maintain adequate cash resources
to complete the clinical development program. Source and Uses of Cash Cash Used in Operating Activities Cash used in operating activities for the nine months ended March 31, 2005 was $4,588,000 compared
to $7,244,000 for the same period in 2004. The decrease in cash outflow of $2,656,000 for the nine
months ended March 31, 2005 was due primarily to the amount of license fee payments due to Novogen
under the terms of the license agreement. In the nine months ended March 2004, the Company was
required to pay Novogen the first lump sum license fee of $5,000,000, which included the milestone
license fee for that period. In the nine months ended March 2005, the Company was required to pay
Novogen a milestone license fee of $2,000,000. Cash Requirements The Company believes that it will have sufficient cash resources to fund existing operations at
least through the end of March 2006 and to complete the current Phase I and lb/IIa clinical trial
program. Ongoing operations through the conduct of the clinical trial program will continue to
consume cash resources without generating revenues. The Company is required to make payments under the terms of the License Agreement with Novogen as
follows: 1. A lump sum license fee of $5,000,000 is payable to Novogen on November 1, 2003 or such later
date when the cumulative total of all funds received from debt or equity issuances and revenue
received from commercialization (income other than sales) and sales of phenoxodiol products exceeds
$50,000,000. We have not yet met these preconditions for payment. 2. In addition to the amounts above, until the expiration of the exclusivity period of the license,
MEPL must pay Novogen 2.5% of all net sales and 25% of commercialization income. After the
exclusivity period of the license, 1.5% of net sales must be paid to Novogen. The preconditions to
such payments have not yet occurred. 3. In addition to the amounts above, amounts payable for annual milestone license fees under the
license agreement for the calendar years ended December 31 are as follows: 20




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Calendar Year2005
    
    $
    4,000,000Each calendar year thereafter during the exclusivity period
    
    $
    8,000,000
 At June 30, 2004 an amount of $1,000,000 was accrued and reflected in amounts due to the parent
company, being 50% of the $2,000,000 milestone payment payable to Novogen on December 31, 2004
under the terms of the license agreement with Novogen. The Company paid the $2,000,000 due to
Novogen at the end of January 2005. Milestone license fees of $1,000,000 have been accrued at March
31, 2005 in connection with the $4,000,000 payment due within 30 days following the end of the
calendar year, December 31, 2005. The Company will also be required to make payments to Novogen under the services agreement and
manufacturing license and supply agreement. The Company is currently planning to conduct a pivotal clinical study to support marketing approval
of phenoxodiol for ovarian cancer. The trial will use phenoxodiol in combination with standard
chemotherapy and will test phenoxodiols efficacy as a chemo-sensitizing agent in late stage
ovarian cancer patients who are refractory to standard chemotherapies. The Company is discussing
trial design with the FDA to develop a trial protocol, including the number of treatment arms
needed to be completed and the number of patients required to be tested in each arm. The Company is
still in the planning stage of the trial design and has not determined the cash resources needed to
complete the trial. Also, additional cash resources may be required if a new cancer compound is developed by Novogen
and the Company secures a license under the terms of the Companys license option deed from
Novogen. Novogen has notified the Company that its new anti-cancer compound NV-18 is now an option
compound under the terms of the license option deed and that Novogen has commenced phase I
clinical trials. The Company has commissioned an independent report on NV-18 and will review
initial clinical results before making a decision to commence license negotiations with Novogen. The Company does not intend to incur any significant capital expenditures in the foreseeable
future. The Company is currently assessing its future cash requirements needed to fund new clinical trial
initiatives and licensing options available to it under the license option deed. Off-Balance Sheet Arrangements The Company does not currently have any off-balance sheet arrangements. New Accounting Pronouncements 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
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. 21




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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 stock option plan provides for the grant of options to the Companys directors,
employees, employees of the Companys affiliates and certain of the Companys contractors and
consultants. To date no options have been issued under the plan. Statement 123R is effective for
the Company in Fiscal 2006. 22




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Item 3: Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk The Company places cash in on call deposits with high quality financial institutions. The Company does not consider the effects of interest rate movements to be a material risk to its
financial condition. The Company does not use derivative financial instruments to hedge its risks
associated with the fluctuations of interest rates. Foreign Currency Risk The Company conducts a portion of its business in various currencies, primarily in U.S. and
Australian dollars. At March 31, 2005, the Company had not established a foreign currency hedging
program. Net foreign exchange losses during the nine months ended March 31, 2005 were $5,000
compared with net exchange gains of $47,000 during the nine months ended March 31, 2004. Foreign
exchange gains and losses occur upon consolidation of MEPL, which uses U.S. dollars as its
functional currency and also engages in transactions in foreign currencies. MEPLs accounts are
denominated in Australian dollars. Translation of MEPLs financial statements into U.S. dollars did
not have a material impact on the Companys financial position. The Company does not consider the effects of foreign currency movements to be a material risk to
its financial condition. 23




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Item 4: Controls and Procedures Evaluation of Disclosure Controls and Procedures At the end of the period covered by this report, the Companys management, with the participation
of the Companys principal executive officer and principal financial officer, evaluated the
effectiveness of the Companys disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based on that evaluation, the
Companys principal executive officer and principal financial officer have concluded that the
Companys disclosure controls and procedures were not designed nor were functioning effectively to
provide reasonable assurance that the information required to be disclosed by the Company in
reports filed under the Securities Exchange Act of 1934 was recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange Commissions rules and
forms. The identified weakness in internal control over financial reporting and in disclosure
controls is described below under the heading Changes in Internal Controls. Changes in Internal Controls In connection with the audit of the fiscal year ended June 30, 2004, Ernst & Young, the Companys
independent auditors at that time, informed our Board of Directors that they believe that the
personnel and management of Novogen who perform our accounting and financial reporting functions
pursuant to the Services Agreement are not sufficiently expert in U.S. GAAP and the requirements of
the SEC and the Public Company Accounting Oversight Board and that this lack of expertise
represents a material weakness in the operation of our internal control over financial reporting. Ernst & Young also noted that our system of financial reporting was not designed to prepare
financial statements in accordance with U.S. GAAP and that our system of internal control, in
particular our processes to review and analyze elements of the financial statement close process
and prepare consolidated financial statements in accordance with U.S. GAAP, has not reduced to a
relatively low level the risk that errors in amounts that would be material in relation to those
financial statements may occur and may not be detected within a timely period by management in the
normal course of business. In this regard, Ernst & Young have recommended that Novogen engage personnel with expertise or
train existing personnel in the following areas:  
    U.S. GAAP;
    financial reporting in accordance with the SEC regulations;
    requirements of the Public Company Accounting Oversight Board; and
    application of technical accounting pronouncements. We have sought assurances from Novogen that it will promptly remedy the concerns raised by Ernst &
Young and Novogen has presented to us a plan for addressing these concerns. We believe that
Novogens plan is designed to ensure that the preparation of our consolidated financial statements,
including the processes to review and analyze elements of our financial statement close process, is
in accordance with U.S. GAAP and that relevant information about U.S. GAAP, SEC financial reporting
requirements, and the requirements of the Public Company Accounting Oversight Board is available to
those persons involved in the process by which our financial statements are prepared. Specifically
Novogens plan provides for additional resources and further training of the Novogen accounting
team including: 24




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1)
    the employment of additional accounting staff on the Novogen accounting team which
will enable senior finance staff responsible for the preparation of U.S. GAAP financial
reports to spend more time dealing with U.S. GAAP reporting issues;2)
    increasing the level of attendance at targeted U.S. GAAP and SEC reporting courses
by senior Novogen finance staff responsible for the preparation of U.S. GAAP financial
reports and SEC disclosure; and3)
    subscribing to additional information networks that provide publications and updates
of SEC and U.S. GAAP releases and rule changes and of information about the requirements
of the Public Company Accounting Oversight Board. Progress on the implementation of Novogens plan to address the material weakness. During the period covered by the report, Novogen has made significant progress in implementing its
plan to address the identified material weakness. Novogen has already recruited an additional degree qualified accountant, enabling senior finance
staff responsible for the preparation of U.S. GAAP financial reports to spend more time dealing
with U.S GAAP reporting issues. Additionally, Novogens senior finance staff have completed
training courses including the SEC Institutes SEC Reporting Conference, the SEC Institutes
Workshop on Implementing SOX404 Internal Control Reporting and will continue to evaluate the merits
of additional courses as they become available. Novogen has already begun to receive additional
publications and updates of SEC, U.S. GAAP and Public Company Accounting Oversight Board
requirements and will continue to review the adequacy of this additional information to determine
whether additional resources are required. Until we are satisfied that we have addressed our needs for sufficient expertise in preparing
financial statements required in our filings under the securities law we will seek to mitigate this
weakness by conferring with our outside accounting advisors with respect to the technical
requirements applicable to our financial statements. The implementation of the initiatives described above are among our highest priorities. Our Board
of Directors, in coordination with our Audit Committee, will continually assess the progress and
sufficiency of these initiatives and make adjustments as and when necessary. As of the date of
this report, we believe that the plans outlined above, when completed, will eliminate the weakness
in internal accounting control as described above. Nonetheless, a control system, no matter how
well designed and operated, cannot provide absolute assurance that the objectives of the control
system are met, and no evaluation of controls can provide absolute assurance that all control
issues have been detected. 25




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PART II            OTHER INFORMATION Item 2: Unregistered Sales of Equity Securities and Use of Proceeds (b) The effective date of the registration statement (Registration No. 333-109129) filed on
Form S-1 and registration statement (Registration No. 333-111291) filed on Form S-1 pursuant to
Rule 462(b), both relating to the initial public offering in the United States of common stock
units (each unit consisting of one share of the Companys common stock and one warrant to purchase
a share of the Companys common stock at an exercise price of $9.00 per share), was December 17,
2003. Proceeds to the Company from the offering, after deduction of underwriting discounts and
commissions of approximately $806,000 and offering costs of approximately $1,612,000, totalled
approximately $15,522,000. As of March 31, 2005, the Company had used $12,073,000 of the proceeds
of the offering, of which: $5,000,000 was used to make the first license fee payment due to Novogen
under the terms of the license agreement; $2,000,000 was used to make the milestone license fee
payment due to Novogen under the terms of the license agreement; and $5,073,000 was used to pay the
ongoing expenses of clinical trials, amounts due to Novogen under the services agreement and the
manufacturing license and supply agreement and for general corporate expenses. All remaining
proceeds of the offering have been invested in short-term money market accounts. The Company intends to use the proceeds from the offering as follows:  
    Approximately $1.1 million to commence Phase II clinical trials of
phenoxodiol as a monotherapy in earlier stage cancers;
    Approximately $4.2 million to commence Phase II clinical trials of
phenoxodiol in combinational therapy with other anti-cancer drugs
for late stage chemo-resistant tumors; and
    The balance for other corporate purposes, including potential
payments to Novogen under the terms of the license agreement,
potential licensing of other cancer compounds developed by Novogen
and potential expansion of the clinical trial program for
phenoxodiol to include other forms of cancer. The occurrence of unforeseen events, opportunities or changed business conditions, however, could
cause us to use the net proceeds of the U.S. initial public offering in a manner other than as
described above. 26




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Item 6: Exhibits and Reports on Form 8-K a) Exhibits Exhibit Index Exhibits31.1
    
    Certification required by Rule 13a-14(a) or Rule 15d-14(a)31.2
    
    Certification required by Rule 13a-14(a) or Rule 15d-14(a)32
    
    Certification required by Rule 13a-14(b) or Rule 15d-14(b) and section 1350 of
Chapter 63 of Title 18 of the United States Code (18 U.S.C 1350).
 (b) Reports on Form 8-K. On January 27, 2005 the Company filed a Form 8-K regarding its announcement that the U.S.
Food Administration had granted the investigational anti-cancer drug, phenoxodiol, fast
track status for its intended use in patients with hormone-refractory prostate cancer. 27




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SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. MARSHALL EDWARDS, INC./s/ D AVID S EATONDavid R. SeatonChief Financial Offer
(Duly Authorized Officer and PrincipalFinancial Officer)
 Date: May 11, 2005 28