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Marshall Edwards (MSH)

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Wednesday 14 September, 2005

Marshall Edwards

Form 10K Annual Report - Pt 1

Marshall Edwards, Inc.
14 September 2005




PART 2



                            See accompanying notes.


                             MARSHALL EDWARDS, INC.

                         (A Development Stage Company)

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                  June 30, 2005





1.   The Company and Summary of Significant Accounting Policies





Marshall Edwards, Inc. ('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 patent 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
all forms other than topical applications.



The Company's business focus is to conduct the clinical program for the
development and commercialization of phenoxodiol.



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.



Revenue Recognition



Interest



The only revenue earned to date is interest on cash balances.



Cash and Cash Equivalents and Short Term Investments



Cash on hand and in banks and short-term deposits are stated at the nominal
value. The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents. Highly liquid
investments with stated maturities of greater than three months are classified
as short-term investments. The Company's cash, held in the US, is deposited in
financial institutions that are FDIC insured. These deposits are in excess of
the FDIC insurance limits. The company also holds cash with Australian financial
institutions.



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, short-term investments 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.



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.



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 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 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 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.





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.



2.  Income Taxes



Loss from operations consists of the following jurisdictions:
                                                                           Year ended June 30,
                                                                      2005              2004            2003
                                                                             (in thousands $)
                                                                        (326)          (321)            (186)
Domestic
                                                                      (6,095)        (8,217)          (2,847)
Foreign
                                                                      (6,421)        (8,538)          (3,033)





The reconciliation of income tax computed at the U.S. federal statutory tax
rates to income tax expense attributable to loss arising during development
stage is:

                                                               Year ended June 30,
                                             2005                    2004                   2003
                                    (in thousands $)   %    (in thousands $)   %   (in thousands $)    %

Tax at US statutory rates                      2,247     35            2,988    35             1,062    35
Australian tax                                 (305)    (5)            (411)   (5)             (142)   (5)
R&D Tax concession                                43      1
Under Provision                                  156      2
Change in valuation allowance                (2,141)   (33)          (2,577)  (30)             (920)  (30)
                                                 -        -              -       -               -       -








Deferred tax liabilities and assets are comprised of the following:
                                                                           Year ended June 30,
                                                                 2005            2004           2003
                                                                           (in thousands $)
Deferred tax liabilities
Unrealised Foreign Exchange Gain                                        (4)           (25)               -
Accrued Interest Income                                                   -            (2)               -
Prepayments                                                               -              -               -
Total deferred tax liabilities                                          (4)           (27)               -

Deferred tax assets
Tax carried forward losses                                            4,972          3,365             933
Unrealised Foreign Exchange Loss                                          8          (121)           (129)
Consultant and other accruals                                           700            318             154
Total deferred tax assets                                             5,680          3,562             958

Valuation allowance for deferred tax assets                         (5,676)        (3,535)           (958)

Net deferred tax assets and liabilities                                   -              -               -




Management evaluates the recoverability of the deferred tax asset and the amount
of the required valuation allowance. Due to the uncertainty surrounding the
realization of the tax deductions in future tax returns, the Company has
recorded a valuation allowance against its net deferred tax asset at June 30,
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 December 1,
2000 (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
carry forwards of approximately $938,000 at June 30, 2005. The federal net
operating losses will begin to expire in 2022.



Foreign tax losses of approximately $16,462,000 at June 30, 2005, may be carried
forward indefinitely.



3.  Loss Per Share



The following table sets forth the computation of basic and diluted net loss per
common share:


                                                                        Years ended June 30,
                                                               2004             2004             2003
                                                                 (In Thousands, except share data)
Numerator
Net loss arising during development stage
                                                                  (6,421)          (8,538)          (3,033)
Effect of dilutive securities
                                                                      -                -                -
Numerator for diluted earnings per share                        $                $                $
                                                                  (6,421)          (8,538)          (3,033)

Denominator
Denominator for basic earnings per share -
Weighted average shares used in computing net loss per         56,938,000       54,954,578       52,023,247
share, basic and diluted.
Effect of dilutive securities                                           -                -                -
Dilutive potential common shares                               56,938,000       54,954,578       52,023,247


Basic and Diluted net loss per share                           $   (0.11)        $  (0.16)        $   (0.06)





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 June 30,
                                                                   2005                2004             2003

Outstanding Warrants                                             2,392,000        2,392,000        2,514,000





The warrants outstanding at June 30, 2005 have an exercise price of $9.00 per
share and are exercisable prior to December 18, 2006.





4.   Expenditure Commitments and Contingencies


At June, 30, 2005, the Company had contracted to conduct research and
development expenditures of approximately $2,285,000. 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:

(In thousands)                        Payment due by period
Contractual                 Total   less than 1 - 3     3 - 5     More than
Obligations                         1 Year    Years     Years     5 Years

Purchase
Obligations              $ 2,285    $ 1,821   $ 464     $ -       $ -

                 Total   $ 2,285    $ 1,821   $ 464     $ -       $ -



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'



The company is not currently a party to any material legal proceedings.



The Company's certificate of incorporation provided that it will indemnify
Novogen in connection with certain actions brought against Novogen by any of the
Company's stockholders or any other person.



The Company has guaranteed the payment and performance of the obligations of its
subsidiary, Marshall Edwards Pty Limited, to Novogen and its subsidiaries,
Novogen Laboratories Pty Limited and Novogen Research Pty Limited, under the
license agreement, the manufacturing license and supply agreement and the
services agreement. Novogen has guaranteed the performance of the obligations of
Novogen Research Pty Limited under the license agreement and the obligations of
Novogen Laboratories Pty Limited under the manufacturing license and supply
agreement to Marshall Edwards Pty Limited. Each of the Company and Novogen's
obligations in the guarantee and indemnity agreement are absolute, unconditional
and irrevocable.





5.   Segment Information



The Company's focus is to continue the clinical program currently underway for
the development and commercialization of phenoxodiol. The business contains two
major segments based on geographic location.


                                            Year Ended June 30,
                                      2005                            2004                 2003
             USA       Australia     Total   USA       Australia     Total   USA      Australia    Total
Statement of (in thousands)
Operations

Interest
Revenue          238          70       308       167          26       193      110          35      145

Loss from
operations      (326)     (6,095)   (6,421)     (321)     (8,217)   (8,538)    (186)     (2,847)  (3,033)

Income Tax         -           -         -         -           -         -        -           -        -
Expense

Net loss
arising
during
development     (326)     (6,095)   (6,421)     (321)     (8,217)   (8,538)    (186)     (2,847)  (3,033)
stage

Balance
Sheet

Segment       33,877       4,266    38,143    34,220         802    35,022    8,896         374    9,270
assets

Elimination
of
investment   (18,779)          -   (18,779)  (10,173)          -   (10,173)  (1,984)          -   (1,984)
in
subsidiary
Consolidated
Assets       $15,098   $ 4,266     $19,364   $24,047   $ 802       $24,849   $6,912   $ 374       $7,286

Segment
liabilities  $ 93      $ 2,750     $ 2,843   $ 110     $ 1,797     $ 1,907   $ 43     $ 1,310     $1,353





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:



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 Year

2005
                  $4,000,000

Each calendar year thereafter during the exclusivity period
$8,000,000



Milestone license fees of $2,000,000 have been accrued in the twelve months
ended June 30, 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 $1,073,000, $1,113,000 and
$1,075,000 were made under the services agreement with Novogen during the twelve
months ended June 30, 2005, 2004 and 2003 respectively. Of these amounts,
$385,000, $811,000 and $790,000 related to service fees paid to Novogen for
research and development services provided in the twelve months ended June 30,
2005, 2004 and 2003 respectively, reflecting the time spent by Novogen research
staff on the development of phenoxodiol. Additionally, $688,000, $302,000 and
$285,000 of the total expenditure during the twelve months ended June 30, 2005,
2004 and 2003 respectively related to costs incurred for administration and
accounting services provided by Novogen. The increase in 2005 related to
compliance with United States securities reporting requirements.



At June 30, 2005 and 2004, $100,000 and $229,000, 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 $612,000, $761,000 and
$164,000 were made under the manufacturing license and supply agreement with
Novogen during the twelve months ended June 30, 2005, 2004 and 2003,
respectively.



At June 30, 2005 and 2004, $79,000 and $44,000, respectively, was due and owing
to Novogen under the manufacturing license and supply agreement and is included
in amounts due to parent company.



7. Equity



Marshall Edwards, Inc. (the 'Company') is a development stage company
incorporated in December 2000 that commenced operations in May 2002 coinciding
with its listing on the London Stock Exchange's Alternative Investment Market
(AIM).



 In 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 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 with 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 $2,431,000 transaction costs in the
December 2003 offering.  Following the offering, Novogen Limited retained 86.9%
of the Company's common stock.





8. Quarterly Financial Data (Unaudited)


2005 for the quarter ended                     Jun-30         Mar-31         Dec-31         Sep-30        Year
                                                    (in thousands except per share data)

Revenue                                           106             71             64             67            308
Net Loss                                      (2,076)        (1,740)        (1,375)        (1,230)        (6,421)
Net Loss arising during development stage     (2,076)        (1,740)        (1,375)        (1,230)        (6,421)
Basic and diluted loss per share               (0.04)         (0.03)         (0.02)         (0.02)         (0.11)

2004 for the quarter ended                     Jun-30         Mar-31         Dec-31         Sep-30        Year
                                                    (in thousands except per share data)

Revenue                                            72             75             25             21            193
Net Loss                                      (1,201)        (1,541)        (4,682)        (1,114)        (8,538)
Net Loss arising during development stage     (1,201)        (1,541)        (4,682)        (1,114)        (8,538)
Basic and diluted loss per share               (0.02)         (0.03)         (0.09)         (0.02)         (0.16)





Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure



None.



Item 9a.

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 2004, the Company determined 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.



In addition, 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, we 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 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:



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; and



3)      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.



Item 9b.



Not applicable


PART III



Item 10. Directors and Executive Officers of the Registrant



Code of Ethics



 We have adopted a Code of Business and Ethics policy that applies to our
Directors and employees (including our principal executive officer and our
principal financial officer), and have posted the text of our policy on our
website (www.marshalledwardsinc.com). In addition, we intend to promptly
disclose (i) the nature of any amendment to the policy that applies to our
principal executive officer and principal financial officer and (ii) the nature
of any waiver, including an implicit waiver, from a provision of the policy that
is granted to one of these specified individuals, the name of such person who is
granted the waiver and the date of the waiver on our website in the future.



The other information required by this item is incorporated by reference from
the information under the caption 'Election of Directors' and the caption '
Compensation and Other Information Concerning Officers, Directors and Certain
Stockholders' and the caption '16(a) Beneficial Ownership reporting Compliance'
contained in our proxy statement for the fiscal year ended June 30, 2004 (the '
Proxy Statement').



Item 11. Executive Compensation



The information required by this item is incorporated herein by reference from
the information under the caption 'Compensation and Other Information Concerning
Officers, Directors and Certain stockholders' under the caption 'Compensation
Committee Interlocks and Insider Participation' contained in the Proxy
Statement.



Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters



Certain of the information required by this item is included in Part II Item 5
of this Annual Report and certain information is incorporated by reference from
the Information under the caption 'Security Ownership of Certain Beneficial
Owners and Management' contained in the proxy statement.



Item 13. Certain Relationships and Related Transactions



Our agreements with Novogen are each summarized below. Each of these agreements
was approved by a majority of our independent directors who did not have an
interest in the transaction. We believe that each of our agreements with Novogen
is on terms as favorable to us as we could have obtained from unaffiliated third
parties. The following description is only a summary of what we believe are the
material provisions of the agreements.



The License Agreement



Novogen's subsidiary, Novogen Research Pty Limited, has granted our subsidiary,
Marshall Edwards Pty Limited, a world-wide, non-transferable license under its
patents and patent applications and in its licensed know-how to conduct clinical
trials and commercialize and distribute phenoxodiol products. We and Novogen
have each guaranteed the obligations of our respective subsidiaries under this
license agreement. See 'Guarantee and Indemnity Agreement.' 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
August 29, 2017, and thereafter is non-exclusive for the remainder of the term
of the agreement. The license grants us the right to make, have made, market,
distribute, sell, hire or otherwise dispose of phenoxodiol products in the field
(the 'Field') of prevention treatment or cure of cancer in humans by
pharmaceuticals delivered in all forms except topical applications.



We are obliged to continue current and undertake further clinical trials of
phenoxodiol, and are responsible for paying for all materials necessary to
conduct clinical trials. We must conduct all such trials diligently and
professionally, must use reasonable endeavors to design and conduct clinical
trials to generate outcomes which are calculated to result in regulatory
approval of phenoxodiol products. We must also keep proper records of all
clinical trials and allow Novogen to inspect those records.



All intellectual property rights in the medication, trial protocols, results of
the clinical trials, case report forms and any other materials used in the
conduct of the clinical trials are assigned by us to Novogen and we must not
publish the results of clinical trials without the prior written consent of
Novogen. Each party must disclose to the other party developments, improvements,
enhancements or new know-how in relation to the phenoxodiol product which are
made or acquired by either party.



We may not sub-license, sub-contract, or engage agents without the prior written
consent of Novogen. Any proposed sub-contractors and agents must first agree in
writing to comply with certain confidentiality obligations and to assign to
Novogen all intellectual property rights in the Field created or acquired by
them in the course of their engagement.



Marketing and Commercialization



We may market and commercialize phenoxodiol products under the license in any
manner we think fit, so long as we conduct any marketing and commercialization
activities on a commercially reasonable basis in compliance with applicable laws
and regulations, comply with reasonable directions given by Novogen, act in a
manner which we consider to be most beneficial to the interests of us and
Novogen, and otherwise act in good faith to Novogen. All advertising and
promotional material must he submitted to Novogen for prior approval.





Fees, Charges and Costs



The following table summarizes our responsibility for fees, charges and costs
under the license agreement.



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:



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.



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. Amounts payable for annual milestone license fees under the license agreement
for the calendar years ended December 31 are as follows:



Calendar Year

            2005                                 $4,000,000

Each calendar year thereafter                    $8,000,000





For the fiscal year ended June 30, 2005 we have included $3,000,000 as a license
fee expense in our consolidated statements of operations.



Termination



We may terminate the license agreement at any time, by giving three months'
notice to Novogen. We may also terminate the agreement if Novogen commits a
breach of any of its material obligations under the agreement, becomes the
subject of certain bankruptcy proceedings or is unable to lawfully perform its
obligations. Novogen may terminate the agreement if we commit a breach of any of
our material obligations under the agreement, become the subject of certain
bankruptcy proceedings or are unable to lawfully perform our obligations.
Novogen may also terminate the agreement immediately if a change of control, as
defined in the license agreement, occurs without the consent of Novogen.



The Manufacturing License and Supply Agreement



Our subsidiary, Marshall Edwards Pty Limited has granted to Novogen's
subsidiary, Novogen Laboratories Pty Limited, an exclusive, non-transferable
sub-license to manufacture and supply phenoxodiol to us in its primary
manufactured form. We and Novogen have each guaranteed the obligations of our
respective subsidiaries under this manufacturing license and supply agreement.
See 'Guarantee and Indemnity Agreement.' Novogen must not sublicense its rights
or engage agents or subcontractors to exercise its rights or perform its
obligations under the agreement without our prior written consent.





Supply of Phenoxodiol



We provide to Novogen rolling forecasts quarterly of our estimated supply
requirements for phenoxodiol, and issue purchase orders for phenoxodiol to
Novogen specifying the volume of phenoxodiol required. Novogen must confirm the
quantity it is able to supply to fulfill the purchase order within 5 business
days of receiving the purchase order. Novogen must then supply the volume of
phenoxodiol it agreed to supply, and must otherwise use all reasonable endeavors
to fulfill the purchase order. Novogen must manufacture and deliver phenoxodiol
to us at a port nominated by us. Title to the phenoxodiol does not pass to us
until we have paid the purchase price (as described below) and retention of
title arrangements apply. We are not obligated to purchase any minimum amount of
phenoxodiol from Novogen.



We must also provide to Novogen at least one year's advance written notice of
the date on which the phenoxodiol product will be first offered for sale
commercially.



If Novogen materially and persistently fails to supply the amount of phenoxodiol
ordered by us by the required date, we may manufacture (or engage a third party,
without Novogen's consent, to manufacture) the amount of the shortfall of
phenoxodiol until Novogen demonstrates that it is able to consistently supply
phenoxodiol in accordance with our requirements. In this case, Novogen must take
all reasonable steps to make available to us or the third party, on commercial
terms, the know-how necessary to enable that manufacture to occur.



Fees and Charges



The purchase price for phenoxodiol supplied is the total costs to Novogen plus a
mark-up of 50%. The purchase price may be adjusted quarterly by Novogen by
reference to the actual costs referred to above for the preceding quarter. If at
any time we do not pay any amount due to Novogen, Novogen may suspend the supply
of phenoxodiol to us until payment is received. Interest accrues daily on the
outstanding balance of all overdue amounts payable to Novogen under the
manufacturing license and supply agreement.



For the fiscal year ended June 2005, we expensed $612,000 in fees under the
manufacturing and supply agreement.



Manufacturing Developments and Improvements



Each party must disclose to the other any new developments, improvements and new
know-how relating to the manufacture of phenoxodiol which are made or acquired
by it during the term of the agreement. All intellectual property rights in
developments, improvements and new know-how made or acquired by Novogen are to
be assigned to us. We must provide to Novogen such technical information and
assistance as Novogen reasonably requests in order to exercise its rights and
perform its obligations.



Each party acknowledges that nothing in the agreement shall have the effect of
transferring or assigning to Novogen any right, title or interest in any
intellectual property rights in the phenoxodiol products licensed under the
agreement.



Novogen agrees to notify us immediately on becoming aware of any infringement of
the intellectual property rights in the licensed products or any claim by a
third party that the activities of the parties under the agreement infringe such
third party's intellectual property rights. If required, Novogen agrees to be a
party to any proceedings brought by us in relation to any infringement of
intellectual property rights in the licensed products and also agrees, at our
cost, to provide all reasonable assistance in relation to such proceedings and
to execute such documents as we reasonably require.



Termination



Either party may terminate the agreement immediately at any time if the other
party becomes the subject of certain bankruptcy proceedings, becomes unable to
carry out the transactions contemplated by the agreement or breaches its
obligations and does not cure such breach within 21 days notice. We may also
terminate the agreement immediately if the license agreement expires or is
terminated. Novogen may also terminate the agreement immediately if a change of
control, as defined in the manufacturing license and supply agreement, occurs
without the consent of Novogen.



Limitation of Liability



The liability of Novogen for breach of conditions or warranties imposed by
statute is limited to the replacement of goods, supply of equivalent goods,
repair or replacement value of goods or the re-supply or payment for re-supply
of services.





The License Option Deed



Novogen's subsidiary, Novogen Research Pty Limited has granted our subsidiary,
Marshall Edwards Pty Limited, an exclusive first right to accept and an
exclusive last right to match any proposed dealing by Novogen with its
intellectual property rights with a third party relating to certain synthetic
pharmaceutical compounds (other than phenoxodiol) developed by Novogen or its
affiliates.





Option Compounds



The rights relate to all synthetic pharmaceutical compounds, known as Option
Compounds, delivered or taken in all forms except topical applications (other
than phenoxodiol, which is the subject of the license agreement), developed
before or during the term of the deed, by or on behalf of Novogen or its
affiliates, which have known applications in the Field of prevention, treatment
or cure of cancer in humans.



Dealings in Option Compounds and Exercise of Rights



Novogen must not, and must ensure that its affiliates other than us do not,
deal, solicit entertain or discuss dealings with any intellectual property
rights in the Field or in relation to any Option Compounds without giving us an
exclusive first right to accept and an exclusive last right to match any such
dealing. If we exercise our first right to accept or last right to match,
Novogen must deal with the intellectual property rights in favor of us on the
terms and conditions proposed. We have 15 business days to exercise those rights
and, if we fail to do so, Novogen may deal with those intellectual property
rights in favor of a third party provided that the terms are no more favorable
to that third party than those first offered to us or which we declined to
match.



Protection of Intellectual Property



Novogen must act in good faith toward us in relation to its obligations under
the deed and must ensure that all persons involved in any research or
development work in the Field in relation to Option Compounds assign all
intellectual property rights relating to the Option Compounds to Novogen.
Novogen must also ensure that its affiliates, other than us, do the same.
Novogen continues to be solely responsible for the maintenance of any patent
rights in the Option Compounds, which it may maintain and enforce at its sole
discretion and expense.



Development Reports



Novogen must provide to us from time to time, and in no event less frequently
than every six months, development reports relating to the clinical trials and
development of Option Compounds, and must notify us immediately of any
regulatory approvals granted and assessments made by any government agency.



Term and Termination



The term of the deed is sixteen years from the commencement date of the
agreement, unless terminated earlier. We may terminate the deed at any time on
three months' notice to Novogen. Either party may terminate the deed immediately
at any time if the other party becomes the subject of certain bankruptcy
proceedings, becomes unable to carry out the transactions contemplated by the
agreement or breaches its obligations and does not cure such breach within 21
days notice.



Novogen may also terminate the deed immediately if a change of control, as
defined in the license option deed, occurs without the consent of Novogen.





The Services Agreement



Novogen has agreed to provide a range of services to us, or procure that its
subsidiaries provide those services.



These services include providing general assistance and advice on research and
development and commercializing phenoxodiol products and other compounds in
which we may acquire intellectual property rights in the future, such as Option
Compounds in relation to which we have exercised our rights under the license
option deed.



Novogen's obligations also include providing, within the agreed budgets
described below, our needs with respect to secretarial, marketing, finance,
logistics, administrative and managerial support. Novogen also plans, conducts
and supervises pre-clinical and clinical trials with phenoxodiol and with other
compounds in which we have intellectual property rights. Novogen also provides
scientific and technical advice on management of pre-clinical and clinical
research programs undertaken by us and manages such research provisions. We have
guaranteed the obligations of our subsidiary under the services agreement. See '
Guarantee and Indemnity Agreement.'


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. At the end of the
fiscal year an adjustment is made to reflect actual costs incurred where they
differ from budget.



For the fiscal year ended June 2005, we expensed $1,073,000 in fees under the
services agreement.



Intellectual Property and Confidentiality



All intellectual property rights created by Novogen in the performance of the
services for or at the request of us are licensed to us. Each party also has
obligations to the other party to honor the other's confidential information.



Termination



We may terminate our rights and obligations under the services agreement on
three months' written notice to Novogen. Either we or Novogen may terminate the
agreement immediately at any time if the other party becomes the subject of
certain bankruptcy proceedings, becomes unable to carry out the transactions
contemplated by the agreement, breaches its obligations and does not cure such
breach within 21 days notice or if a change of control in the other party
occurs. Novogen may also terminate the agreement immediately if a change of
control, as defined in the services agreement, occurs without the consent of
Novogen.





Guarantee and Indemnity Agreement



We have guaranteed the payment and performance of the obligations of our
subsidiary, Marshall Edwards Pty Limited, to Novogen and its subsidiaries,
Novogen Laboratories Pty Limited and Novogen Research Pty Limited, under the
license agreement, the manufacturing license and supply agreement and the
services agreement. Novogen has guaranteed the performance of the obligations of
Novogen Research Pty Limited under the license agreement and the obligations of
Novogen Laboratories Pty Limited under the manufacturing license and supply
agreement to Marshall Edwards Pty Limited. Each of our and Novogen's obligations
in the guarantee and indemnity agreement are absolute, unconditional and
irrevocable.



Indemnification



We and Novogen have each agreed to indemnity the other if either of our
respective subsidiaries default in the performance of any obligation under the
license agreement, the manufacturing license and supply agreement or the
services agreement. The defaulting party must indemnify the other against all
losses, liabilities and expenses, including legal expenses on a full indemnity
basis, incurred, directly or indirectly, as a result of that default. The party
in default must pay the amount of those losses, liabilities and expenses on
demand to the non-defaulting party. Furthermore, if Marshall Edwards Pty Limited
defaults on its payment obligations, we must pay that money as directed by
Novogen.



Termination



This agreement is a continuing obligation, and remains in full force until all
the guaranteed obligations have been irrevocably paid and performed in full.



Item 14. Principal Accountant Fees and Services.



The information required by this item is incorporated by reference from the
information under the caption 'Principal Accountant Fees and Services' contained
in the Proxy Statement.






PART IV



Item 15. Exhibits and Financial Statement Schedules



(a)    1. Financial Statements



                        Reference is made to the Index to Financial Statements
under Item 8, Part II  hereof.





2. Financial Statement Schedules



     The Financial Statement Schedules have been omitted either because they are
not required or because the information has been included in the financial
statements or the notes thereto included in this Annual Report on Form 10-K.



            3. Exhibits



                                 Exhibit Index



Exhibits


3.1        Amended and Restated Certificates of Incorporation. (1)
3.2        Amended and Restated Bylaws. (1)
4.1        Specimen Stock Certificate. (1)
4.2        Warrant Agreement. (1)
4.3        Specimen Warrant Certificate. (1)
10.1       Amended and Restated License Agreement between Novogen Research Pty Limited and Marshall
           Edwards Pty Limited. (1)
10.2       Amended and Restated Manufacturing License and Supply Agreement between Novogen Laboratories
           Pty Limited and Marshall Edwards Pty Limited. (1)
10.3       Amended and Restated License Option Deed between Novogen Research Pty Limited and Marshall
           Edwards Pty Limited. (1)
10.4       Amended and Restated Services Agreement among Novogen Limited, Marshall Edwards, Inc. and
           Marshall Edwards Pty Limited. (1)
10.5       Guarantee and Indemnity among Marshall Edwards, Inc., Novogen Laboratories Pty Limited, Novogen
           Research Pty Limited and Novogen Limited. (1)
10.6       Marshall Edwards, Inc. Share Option Plan. (1)
21         Subsidiaries of Marshall Edwards, Inc. (1)
23.1       Consent of Ernst & Young
23.2       Consent of Ernst & Young LLP
31.1       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).



(1)    Incorporated by reference to exhibits to the Registration Statement on
Form S-1 filed on December 18, 2003, as amended (Reg. No. 333-109129).




SIGNATURES







Pursuant to the requirements of Section 13 or 15(d) 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, on September 13, 2005.



                     MARSHALL EDWARDS, INC.
                     A Delaware Corporation



               By:  /s/ Christopher Naughton




                      Christopher Naughton
                      Chief Executive Offer



Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on September 13, 2005.



Signatures                                            Title


By: /s/ Christopher Naughton         President, Chief Executive Officer and Director
Christopher Naughton

By: /s/ David Seaton                  Secretary, Chief Financial Officer
David Seaton

By: /s/ Graham Kelly                  Director
Graham Kelly

By: /s/ Stephen Breckenridge          Director
Stephen Breckenridge

By: /s/ David de Kretser              Director
David de Kretser

By: /s/ Paul Nestel                   Director
Paul Nestel

By: /s/ Philip Johnston               Director
Philip Johnston



Exhibit 23.1



            Consent of Independent Registered Public Accounting Firm



We consent to the incorporation by reference in the Registration Statement
(Post-Effective Amendment No.3 to Form S-1 No. 333-109129 on Form S-3) of
Marshall Edwards, Inc. and in the related Prospectus of our report dated August
13, 2004, with respect to the consolidated financial statements of Marshall
Edwards, Inc., included in this Annual Report (Form 10-K) for the year ended
June 30, 2005.



/s/ Ernst & Young





Sydney, Australia
September 12, 2005



Exhibit 23.2




          Consent of Independent Registered Public Accounting Firm





We consent to the incorporation by reference in the Registration Statement
(Post-Effective Amendment No.3 Form S-1 No. 333-109129) on Form S-3 of Marshall
Edwards, Inc. and in the related Prospectus of our report dated July 31, 2003,
with respect to the 2003 consolidated financial statements of Marshall Edwards,
Inc., included in the Annual Report (Form 10-K) for the year ended June 30,
2005.





/s/ Ernst & Young LLP



Stamford, Connecticut



September 12, 2005



Exhibit 31.1

                                 CERTIFICATION



I, Christopher Naughton, certify that:



1.       I have reviewed this report on Form 10-K of Marshall Edwards, Inc.;

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

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

4.       The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e) ) for the registrant and have:

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

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

(c)                                        Disclosed in this report any change
in the registrant's internal control over financial reporting that occurred
during the registrants fourth fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control over
financial reporting; and

5.       The registrant's other certifying officer(s) and I have disclosed,
based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the
registrant's board of directors:

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

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







Date: September 13, 2005                         /s/ CHRISTOPHER NAUGHTON
                                                 Christopher Naughton
                                                 Chief Executive Officer




Exhibit 31.2

                                 CERTIFICATION



I, David Ross Seaton, certify that:



1.       I have reviewed this report on Form 10-K of Marshall Edwards, Inc.;

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

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

4.       The registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e) ) for the registrant and have;

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

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

(c)                                        Disclosed in this report any change
in the registrant's internal control over financial reporting that occurred
during the registrants fourth fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal control over
financial reporting; and

5.       The Company's other certifying officer(s) and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors:

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

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







Date: September 13, 2005                        /s/ DAVID SEATON



                                                 David R. Seaton
                                                 Chief Financial Officer

Exhibit 32



                                 CERTIFICATION





Pursuant to the requirement set forth in Rule 13a-14(b) or Rule 15d-14(b) of the
Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of
Title 18 of the United States Code (18 U.S.C. (S) 1350), Christopher Naughton,
the President and Chief Executive Officer of Marshall Edwards, Inc.  (the '
registrant'), and David R. Seaton, the Chief Financial Officer of the
registrant, each hereby certifies that, to his or her knowledge:



1.       The registrant's Annual Report on Form 10-K for the period ended June
30, 2005, to which this Certification is attached as Exhibit 32 (the 'Periodic
Report'), fully complies with the requirements of Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934, as amended; and

2.       The information contained in the Periodic Report fairly presents, in
all material respects, the financial condition of the registrant at the end of
the period covered by the Periodic Report and results of operations of the
registrant for the period covered by the Periodic Report.



These certifications accompany the Form 10-K to which they relate, are not
deemed filed with the Securities and Exchange Commission and are not to be
incorporated by reference into any filing of the registrant under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended
(whether made before or after the date of the Form 10-K), irrespective of any
general incorporation language contained in such filing.



Dated: September 13, 2005





/s/ CHRISTOPHER NAUGHTON                         /s/ DAVID SEATON



Christopher Naughton                               David R. Seaton
Chief Executive Officer                            Chief Financial Officer



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