Nascent Biotech Inc. - Quarter Report: 2023 September (Form 10-Q)

U.S. SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended September 30, 2023

OR

For the transition period from ______________ to ______________

Commission File Number: 000-55299

(612) 961-5656

(Registrant’s Telephone Number)

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) been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ☒   No ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated file, non-accelerated filer, or a smaller reporting company.  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 9, 2023 the Registrant had, 166,735,430 shares of common stock and no shares of Series A convertible preferred issued and outstanding.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

ITEM: 1 FINANCIAL STATEMENT

NASCENT BIOTECH, INC.

CONSOLIDATED BALANCE SHEETS

The accompanying notes are an integral part of these unaudited consolidated financial statements.

NASCENT BIOTECH, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

AS OF SEPTEMBER  30,

(Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

NASCENT BIOTECH, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

THREE AND SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

NASCENT BIOTECH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

AS OF SEPTEMBER 30,

(Unaudited)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

NASCENT BIOTECH, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS

Nascent Biotech, Inc. (“Nascent” or the “Company”) was incorporated on March 3, 2014 under the laws of the State of Nevada. The Company is actively developing Pritumumab for the treatment of brain cancer and pancreatic cancer. Nascent is also actively researching other cancers that have a high probability of benefiting from the therapeutic effects of Pritumumab because they share a common target. Pritumumab has shown to be very effective at low doses in previous clinical studies in Japan. Nascent is a phase 2 clinical trial  biopharmaceutical company that focuses on biologic drug candidates that are preparing for initial clinical testing for the treatment of brain and pancreatic cancer.

On March 31, 2017, the Company filed its IND submission with the United States Food and  Drug Administration (FDA) for clearance to begin Phase I clinical trials. On December 7, 2018, the Company received a letter from the FDA allowing it to use a specific lot of drug substance to begin phase 1 clinical trials. On March 15, 2021, the Company opened phase1  clinical trials. On August 10, 2023 the Company received clearance from the United States Food and Drug Administration to commence phase 2 clinical trials of brain cancer.

NOTE 2- BASIS OF PRESENTATION

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The Company has elected a fiscal year ending on March 31.

The accompanying unaudited interim consolidated financial statements of the Company for the three and six months ended September 30, 2023 and 2022 have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information in accordance with Securities and Exchange Commission and should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s annual report on Form 10-K for the year ended March 31, 2023. In the opinion of management, the unaudited financial statements have been prepared on the same basis as the annual financial statements and reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position and the results of operations for the interim periods presented herein. The results of operations for the interim periods are not necessarily indicative of the results to be expected for any subsequent quarters or for an entire year.

Basis of Presentation

The Company computes net loss per share in accordance with ASC 260, Earnings per Share, which requires presentation of both basic and diluted loss per share (“EPS”) on the face of the statement of operations.  Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of common shares outstanding (denominator) during the period.  Diluted EPS gives effect to all dilutive potential common shares outstanding during the period including stock options and warrants, using the treasury stock method, convertible preferred stock, and convertible debt, using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants.  Diluted EPS excludes all potentially dilutive common shares if their effect is antidilutive. 

We have identified the conversion features of certain of our convertible notes payable as derivatives.  We estimate the fair value of the derivatives using the American Option Binomial  pricing model.  We estimate the fair value of the derivative liabilities at the inception of the financial instruments, at the date of conversions to equity and at each reporting date, recording a derivative liability, debt discount, and a gain or loss on change in derivative liabilities as applicable.  These estimates are based on multiple inputs, including the market price of our stock, interest rates, our stock price volatility and variable conversion prices based on market prices as defined in the respective agreements.  These inputs are subject to significant changes from period to period and to management's judgment; therefore, the estimated fair value of the derivative liabilities will fluctuate from period to period, and the fluctuation may be material.

Revenue recognition 

In April 2016, the FASB issued ASU 2016–10 Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The amendments in this Update do not change the core principle of the guidance in Topic 606. Rather, the amendments in this Update clarify the following two aspects of Topic 606: identifying performance obligations and the licensing implementation guidance, while retaining the related principles for those areas. Topic 606 includes implementation guidance on (a) contracts with customers to transfer goods and services in exchange for consideration and (b) determining whether an entity’s promise to grant a license provides a customer with either a right to use the entity’s intellectual property (which is satisfied at a point in time) or a right to access the entity’s intellectual property (which is satisfied over time). The amendments are intended to render more detailed implementation guidance with the expectation to reduce the degree of judgement necessary to comply with Topic 606.

ASC Topic 606 prescribes a new five-step model entities should follow in order to recognize revenue in accordance with the core principle. These five steps are:

The Company implemented the transition using the modified retrospective method of transition. The funds are not earned on milestones that have not been reached per the contract. Based on the cut off treatment of the recognition of revenue per the milestones specific to the license agreements, the Company has determined that there are no adjustments in the value of the revenue recognized from these contracts.

Derivative debt

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40). The new ASU eliminates the beneficial conversion and cash conversion accounting models for convertible instruments and supersedes the respective guidance within ASC 470-20 and ASC 740-10-55-51. With the elimination of the cash conversion and beneficial conversion feature models, more instruments will be accounted for as a single instrument rather than having their proceeds allocated between liability and equity accounting units.

The amendments in the ASU are effective for public business entities that meet the definition of an SEC filer, excluding entities eligible to be smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted at the beginning of an entity’s annual fiscal year, but no earlier than fiscal years beginning after December 15, 2020. The Company is still evaluating the effects of the adoption of the amendment.

NOTE 3 - GOING CONCERN

The Company’s consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern that contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has minimal working capital and has incurred losses from operations. The Company has no revenue to cover its operating costs and the Company will incur additional expenses in the future developing their product. These factors raise substantial doubt about the company’s ability to continue as a going concern. The Company engages in research and development activities that must be satisfied in cash secured through outside funding. The Company may offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4 – RELATED PARTY TRANSACTIONS

On September 1, 2015, the Company entered five-year employment contracts with three of its officers and directors. One of the officers and director resigned as of September 30, 2020. Under the terms of the agreements the Company issued shares of common stock to the officers and directors equaling 11% of the outstanding shares of the Company as of the date of the contracts. As additional future shares are issued, the officers and directors are entitled to additional shares, so their aggregate ownership percentage initially remained at 11% (undated to 18% as noted below) of the outstanding shares of the Company. The agreements were amended on September 1, 2020, as noted below, and the table reflects the amendment to these agreements. The following table sets forth the shares earned under these contracts for the two active officers as of September 30, 2023:

On September 1, 2020, the Company entered five-year compensation agreements with two of its officers and directors. Under the terms of the agreements the Company issued shares of common stock to the two senior officers equaling 18% of the outstanding shares of the Company as additional future shares are issued. The officers are entitled to additional future shares, so their aggregate ownership percentage remains at 18% of the future outstanding shares of the Company.

During the six months ended September 30, 2023, two officers and a director were issued 6,433,902 shares of common stock with a value of $639,951 for service.

NOTE 5 – EQUITY

Common

During the six months ended September 30, 2022, two officers and a director were issued 1,265,129 shares of common stock with a value of $371,140 for service.

During the six months ended September 30, 2022, four entities were issued 3,700,000 shares of common stock with a value of $148,000 for the exercise of 3,700,000 warrants.

During the six months ended September 30, 2022, the Company issued 37,700 shares of common stock with a value of $9,275 for accounts payable.

During the six months ended September 30, 2022, the medical director was issued 1,000,000 shares of common stock with a value of $60,000 for service.

During the six months ended September 30, 2022, the Company issued 500,000 shares of common stock with a value of $60,000 for the exercise of 500,000 warrants.

During the six months period ended September 30, 2022, the Company issued 379,080 shares of common stock with a value of $101,973 for the conversion of $100,000 of convertible notes and $1,973 in interest.

During the six months ended September 30, 2023, two officers and a director were issued 6,433,902 shares of common stock with a value of $639,951 for service.

During the six months ended September 30, 2023, the Company issued 9,537,180 shares of common stock with a value of $367,796 for the conversion of debt and accrued interest.

During the six months ended September 30, 2023, the Company issued 100,000 shares of common stock with a value of $5,600 for service.

During the six months ended September 30, 2023, the Company issued 18,720,000 shares of common stock with a value of $1,436,000 for cash.

During the six months ended September 30, 2023, the Company issued 180,000 shares of common stock with a value of $9,000 for service.

NOTE 6– OPTIONS

During the six months period ended September 30, 2023, the Company recognized $9,822 in option expense leaving a balance  of unrecognized option expense of $66,170.

The following sets forth the options granted and outstanding during the six months ended September 30, 2023:

The weighted average remaining life and intrinsic value of the options as of September 30, 2023, was 3.31 years and $37,900, respectively.

NOTE 7 – WARRANTS

During the year ended March 31, 2021 the Company issued 3,700,000 warrants and  used the Binomial Pricing model to estimate the fair value of the warrants as of grant date, using the following key inputs: market prices of the Company’s common stock at dates of grant between $0.08-0.11 per share, conversion price of $0.15, volatility of 312.5%-314.49% and discount rate of 0.14-0.16%. Based on the fair value of the common stock of $437,000 and  value of the warrants of $349,605 the fair value of the warrants was calculated to be 41% of the total value or $303,000. During the year ended March 31, 2021 the valuation resulted in a deemed dividend from the down round calculation of $555,000. As of September 30, 2022  3,700,000 warrants were converted into 3,700,000 shares of common stock for cash at a value for $148,000.

On April 7, 2022, the Company issued 500,000 warrants as part of a convertible note issued the same date. The Company used the Binomial  Pricing model to estimate the fair value of the warrants as of grant date using the following key inputs; market prices of the Company’s stock at date of grant  of $0.08 per share, conversion price of $0.12 per share, volatility of 132% and discount of 1.78%. The fair value of the warrants were calculated to be $ 26,000 and was used to allocate the proceeds to the two elements based on the relative fair value of the debt instruments without the warrants and of the warrants at the time of issuance. The portion of the proceeds allocated to the warrants of $21,336 is accounted for as paid in capital. As of September 23, 2022 the 500,000 warrants were converted into 500,000 shares of common stock with a value of $60,000.

On August 31, 2022 the Company issued 750,000 warrants as part of a convertible note issued the same date. The Company used the Binomial  Pricing model to estimate the fair value of the warrants as of grant date using the following key inputs; market prices of the Company’s stock at date of grant  of $0.41 per share, conversion price of $0.60 per share, volatility of 137% and discount of 3.50%. The fair value of the warrants were calculated to be $ 188,760 and was used to allocate the proceeds to the two elements based on the relative fair value of the debt instruments without the warrants and of the warrants at the time of issuance. The portion of the proceeds that were allocated to the warrants of $9,902 is accounted for as paid in capital.

On September 2, 2022 the Company issued 250,000 warrants as part of a convertible note issued the same date. The Company used the Binomial Pricing model to estimate the fair value of the warrants as of grant date using the following key inputs; market prices of the Company’s stock at date of grant  of $0.345 per share, conversion price of $0.60 per share, volatility of 137% and discount of 3.47%. The fair value of the warrants were calculated to be $50,273 and was used to allocate the proceeds to the two elements based on the relative fair value of the debt instruments without the warrants and of the warrants at the time of issuance. The portion of the proceeds were allocated to the warrants of $2,484 is accounted for as paid in capital.

The warrants contain an anti-dilution clause which become effective if any instrument is issued after the warrant  issuance is converted into common stock at a price lower than the warrant conversion price. During the six months ended September 30, 2023 the valuation resulted in a deemed dividend from the down round calculation of $550,000 with a recalculated conversion price change to $0.05 per share.

The weighted average remaining life and intrinsic value of the warrants as of September 30, 2023 was:

As of September 30, 2023 there were 1,000,000 warrants outstanding. The remaining life weighted average was 0.91 and intrinsic value of zero.

NOTE 8 - CONVERTIBLE DEBT

On August 31, 2022 the Company entered into an agreement with an unrelated third party for convertible debentures totaling $1,500,000.  The first  $500,000 was  paid at closing with the second $500,000 paid on September 20, 2022, upon filing of an S-1 Registration, and the third $500,000 paid on September 27, 2022, upon the S-1 becoming effective.  Each debenture matures one year from date of issuance.  The interest rate for each debenture is six percent (6%) per annum and the Debenture may be converted at the lesser of $0.30 per share or eighty percent (80%) of the lowest VWAP of the Company’s common stock for ten consecutive trading days immediately prior to the conversion date and carried an original discount of 3% of the debenture face value. The Company also issued a warrant to purchase 750,000 shares of the Company’s common stock for a period of two years, expiring on August 30, 2024, at an exercise price of $0.60 per share.  As part of the agreement the Company filed an S-1 registration statement registering the underlying common shares for the debenture conversion and the warrants.

The initial derivatives were calculated for each debenture as follows:

During the six months ended September 30, 2023, the Company issued to the note holder 8,205,263 shares of common stock for the conversion of $300,000 of the convertible notes plus $17,556 of accrued interest. 

On June 29, 2023 the Company signed a redemption agreement, amended on August 31, 2023, with the debentures owner pertaining to the outstanding principal balance of $400,000. Under the terms of the agreement the Company paid the debenture owner $50,000 on August 24, 2023. The terms of the agreement requires principal payments of $50,000, which was made before September 30, 2023, $50,000 to be paid on or before October 31, 2023 and the balance of $250,000 on or before December 31, 2023. The debenture owner has agreed not to convert any of the principal or interest to common stock through December 31, 2023 and if the terms of the agreement are met will forgive any interest on the outstanding amounts of the debentures. If the note is not satisfied as of December 31, 2023, the note holder could convert the outstanding balance into common stock.

On September 2, 2022 the Company entered into an agreement with an unrelated third party for convertible debentures totaling $500,000.  The first  $250,000 was advanced to the Company at closing with the second $250,000 to be paid  to the Company upon the S-1 becoming effective. Each debenture matures one year from date of issuance.  The interest rate for each debenture is six percent (6%) per annum and the Debenture may be converted at the lesser of $0.30 per share or eighty percent (80%) of the lowest VWAP of the Company’s common stock for ten consecutive trading days immediately prior to the conversion date and carried an original discount of 3% of the debenture face value. The Company also issued a warrant to purchase 250,000 shares of the Company’s common stock for a period of two years, expiring on August 30, 2024, at an exercise price of $0.60 per share.  As part of the agreement the Company filed an S-1 registration statement registering the underlying common shares for the debenture conversion and the warrants. The initial derivative was calculated using risk free interest of 3.47%, volatility of 137% and expected life of 1 year. As of September 30, 2023 the funds  for the second debenture were not received by the Company. During the six months ended September 30, 2023, the Company issued to the note holder 1,331,919 shares of common stock for the conversion of $45,000 of the convertible note plus $5,240 of accrued interest leaving a note balance of $5,000 plus accrued interest. 

During the six months ended September 30, 2023, the Company issued an aggregate of 9,537,180 shares of common stock with a value of $367,796 for the conversion of $345,000 of convertible note and $22,795 in interest. The conversion of the shares plus the principal payment noted above leaves a balance due of $305,000 in convertible notes plus accrued interest.

NOTE 9 - FAIR VALUE MEASUREMENTS AND DERIVATIVE LIABILITIES

As defined in (Financial Accounting Standards Board ASC 820), fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The Company utilized the market data of similar entities in its industry or assumptions that market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated, or generally unobservable. The Company classifies fair value balances based on the observability of those inputs. FASB ASC 820 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement).

The three levels of the fair value hierarchy are as follows:

As September 30, 2023, the Company believes the amounts reported for cash, payables, accrued liabilities and amounts due to related parties approximate their fair values, due to the nature or duration of these instruments. During the six months ended September 30, 2023, the Convertible note holder entered into an agreement in which the Company will pay the principal note balance by December 31, 2023. The note holder will not convert any amount of the outstanding notes into common stock unless the principal has not been paid per the agreement. 

The following table represents the change in the fair value of the derivative liabilities during the quarter ended September 30, 2023:

NOTE 10 –COMMITMENTS AND CONTINGENCIES

On September 30, 2016, the Company entered a cell line sales agreement with the product manufacturer. Under the terms of the agreement the Company is obligated to make future payments based on the milestones of its achievements.  These future payments may be as followed;

As of September 30, 2023 the outstanding balance was $50,090.

On March 9, 2020, the Board of Directors of the Company adapted an expense bonus program. Under the program, if an acquisition, merger or change in control is affected, 10% of the value of the transaction will be allocated to pay the expenses of the transaction including but not limited to legal, accounting, transfer fees and other miscellaneous expense. The balance of the fund after expenses will be allocated 20% to directors and 80% to officers and employees of the Company as allocated by the Chief Executive Officer and approved by the Board of Directors.

NOTE 11- LICENSE AGREEMENT

On March 31, 2021, the Company issued a license agreement for US $5,000,000 to BioRay Pharmaceutical Co, LTD, (Licensee) licensing Pritumumab internationally with the exclusion of North and Central America and the Caribbean Islands. Under the terms of the agreement the Company received $250,000 upon signing of the agreement plus $750,000 with the start of the phase 1 clinical trials , which started in March 2021. In addition, the Company received $750,000 upon the initial patient enrolled at the dosage level of 8.0 mg/kg. Further payments of $2,500,000 were to be received when the FDA approves the phase 2 clinical trials and $750,000 to receive when the phase 2 clinical trials begin. Upon commercialization by the Licensee, the Company was to receive a 9% royalty on net sales for 20 years. Since the inception of the license agreement the Company had receive payments totaling $1,750,000. On June 6, 2023 the Company and BioRay mutually agreed to terminate the license agreement, at no cost to either party, returning the worldwide rights to the Company.

NOTE 12 - SUBSEQUENT EVENTS

On October 23, 2023, the Company paid $5,000 against the outstanding convertible notes payable to Platinum Point leaving a balance due of zero.

On October 30, 2023 ,the Company paid $50,000 against the note outstanding per the settlement agreement with Yorkville leaving a balance due on December 31, 2023 of $250,000.

The Company has evaluated subsequent events to determine events occurring after September 30, 2023 through the date of this filing that would have a material impact on the Company’s financial results or require disclosure and have determined none exist other than those noted above in this footnote.

ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERTIONS

This report contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Company’s actual results could differ materially from those set forth on the forward-looking statements because of the risks set forth in our filings with the Securities and Exchange Commission, general economic conditions, and changes in the assumptions used in making such forward looking statements.

Nascent Biotech, Inc (“Nascent” or the “Company”) was incorporated on March 3, 2014 under the laws of the State of Nevada. The Company is actively developing Pritumumab for the treatment of brain cancer and pancreatic cancer. Nascent is also actively researching other cancers that have a high probability of benefiting from the therapeutic effects of Pritumumab because they share a common target.

Nascent is a phase 2 clinical stage biopharmaceutical company that develops monoclonal antibodies for the treatment of various forms of cancer. The Company focuses on biologic drug candidates that are undergoing or have already completed initial clinical testing for the treatment of cancer and then seek to further develop those drug candidates for commercial use. Nascent currently is developing for the treatment of brain cancer and pancreatic cancer both of which we hold orphan drug status granted by the FDA. Nascent has completed phase 1 clinical trials. On August 10, 2023 the Company received clearance from the United States Food and Drug Administration to commence phase 2 clinical trials for brain cancer.

In addition, Nascent, in collaboration with academic and corporate partners, has asserted the potential for pritumumab to be involved as both a treatment and a vaccine for the SARS-CoV-2 virus (responsible for COVID-19).

Overview

The Company is focused on developing pritumumab for the treatment of patients with brain cancer malignancies such as gliomas and astrocytomas. Current therapeutic strategies for brain cancer include the use of the chemotherapy, surgical intervention or radiation therapy. Because these treatments have marginal outcomes there exists a need to develop safer, more effective drugs. Temodar-the most commonly used Chemotherapeutic drug used to treat brain cancer, is attributed to only median rates of survival and many brain tumors are eligible for surgery. Moreover, even when removed, most brain tumors come back within one year post-operation. Today, with current standards of care, less than 60% of all brain cancer patients will live past the first year after diagnosis, and less than 35% of patients will live to five years. Glioblastoma, a particularly aggressive form of brain cancer that constitutes 42% of ALL brain and other nervous system cancers, has survival rates of 36.5% at 1 year and 5% at 5 years. (SEER Registry Data, September 15^th, 2016 (Central Brain Tumor Registry of the United States).

On March 31, 2017, the Company filed its IND submission with the United States Food and Drug Administration (FDA) for clearance to begin Phase I clinical trials. On December 7, 2018, the Company received a letter from the FDA allowing it to use a specific lot of drug substance to begin phase 1 clinical trials. The Company commenced human clinical trials with a major oncology hospital for brain cancer, both primary and metastatic. Phase 1 clinical trials has been completed. On August 10, 2023 the Company received clearance from the United States Food and Drug Administration to commence phase 2 clinical trials of brain cancer.

In May of 2020, Nascent announced a research collaboration to study, both in vitro and in vivo (mouse models), the ability of pritumumab to block the SARS-Cov-2 virus from infecting cells. This notion has been raised by a published article in the scientific literature (Yu et al. Journal of Biomedical Science (2016) 23:14 DOI 10.1186/s12929-016-0234-7), which specifically mentioned cell surface vimentin (the protein to which pritumumab binds selectively) as a potential target in the treatment of conditions related to coronaviruses. These preliminary studies are on-going. Further, in May of 2020, Nascent announced a joint collaboration with Manhattan BioSolutions, Inc (NY, NY) to employ Manhattan’s platform, based on the recombinant Mycobacterium bovis Bacillus Calmette-Guerin (BCG) vaccine, but engineered to target SARS-CoV-2. BCG is a live non-pathogenic bacterium that stimulates diverse innate and adaptive immune responses and is well-known for its long safety track record as a tuberculosis vaccine. Thus, with these collaborations, Nascent is investigating the potential utility of pritumumab as both a treatment for COVID-19 and a preventive vaccine for COVID-19.

Results of Operations

The Company recorded zero revenue during the three and six month periods ended September 30, 2023 and 2022, respectively.

General and administrative expenses for the three and six month periods ended September 30, 2023 was $82,036 and $169,786 compared to $81,886 and $191,689 for the periods ended September 30, 2022. Consulting expense for the three and six month periods ending September 30, 2023 was $696,190 and $925,552 compared to $213,915 and $637,065 for the same periods in 2022. This increase in expenses for the three and six month periods ended September 30, 2023 over the same period in 2022 was due primarily to increased consulting fee of $288,487 from the pricing of the shares issued to management for maintaining the percentage of ownership per their agreements. Expense was also increased by product filling cost of $136,507 for the six months period ended September 30, 2023 verse none in the same period in 2022. This is the vialing of the bulk drug product for use in the clinical trials.

Research and development expenses for the three and six month periods ended September 30, 2023 was $28,308 and $54,218 compared to $75,738 and $132,628 in the same periods in 2022. Clinical trials costs was $30,921 and $63,365 for the three and six month periods ended September 30, 2023 compared to $$149,592 and $179,689 in the same periods in 2022. Phase 1 clinical trials ended in March 2023. Until the commencing of phase 2 clinical trials, the expenses for research and development plus clinical trial expenses will be minimal.

.

Total other income expense during the three and six month periods ended September 30, 2023 was other income of $7,979 and other expense of $20,272, compared to other income of $375,571 and other expense of $304,680 in the same periods in 2022. Other expense during the six months in 2023 consisted of interest expense of $362,843, offset by a gain in debt settlement of $50,000 and a gain on the change of fair value of $292,179. Other expenses in the six months period ended September 30, 2022 consisted of gain in fair value of $375,656, offset by interest expense of $345,834 and original note discount of $329,390.

For the three month and six month periods ended September 30, 2023, our net loss was $829,476 and $1,369,700 compared to a net loss of $145,714 and $1,445,590 for the same periods in 2022. The difference between the periods was due primarily to the loss on original note discount in the six months period ending September 30, 2022 over the same period in 2023.

Liquidity and Capital Resources

The Company’s liquidity and capital is dependent on the capital it can raise to continue the Company’s testing and clinical trials of its product. The Company projects it must raise approximately $15-20 million to complete its Phase II clinical studies.

There are no agreements or understandings about future loans by or with the officers, directors, principals, affiliates, or shareholders of the Company. The Company will continue to raise outside capital through loans, equity sales and possible licensing agreements. These factors raise substantial doubt about the company’s ability to continue as a going concern

At September 30, 2023, the Company had working capital deficit of $6,410. Current assets consist of cash of 1,003,968 and prepaid of $38,693 with current liabilities $1,049,071 consisting of accounts payable and accrued expense of $510,082, convertible notes, net of discount of $305,000, derivative liability of $179,989 and due to related parties of $54,000.

Net cash used in operating activities in the six months period ended September 30, 2023 was $504,218 compared to net cash used of $777,502 in the same period in 2022. The variance between the same periods in 2023 and 2022 relates mainly to a lower loss in the six months period ended September 30, 2023 over the same period in 2022.

Net cash provided by financing activities for the six months period ended September 30, 2023 was $1,336,000 compared to net cash provided by financing activities of $1,865,000 in the same period in 2022. Cash provided in the six months period ended September 30, 2023 consisted of common stock sold for cash of $1,436,000 offset by repayment of convertible notes of $100,000, compared to proceeds from convertible notes of $1,932,000 and warrant conversion of $208,000, offset by payment of convertible notes of $275,000 during the same period in 2022.

As of September 30, 2023, the Company had total assets of $1,042,661 and total liabilities of $1,049,071. Stockholders’ deficit as of September 30, 2023 was $6,410. This compares to a stockholders’ deficit of $1,296,137 as of March 31, 2023. Liabilities decreased in 2023 mainly as a function of lower convertible notes, net of discount and lower derivative liability.

NEED FOR ADDITIONAL FINANCING:

The Company is engaged in research and development activities that must be satisfied in cash secured through outside funding. The Company will offer noncash consideration and seek equity lines as a means of financing its operations. If the Company is unable to obtain revenue producing contracts or financing or if the revenue or financing it does obtain is insufficient to cover any operating losses it may incur, it may substantially curtail or terminate its operations or seek other business opportunities through strategic alliances, acquisitions or other arrangements that may dilute the interests of existing stockholders.

Our current capital needs are estimated to be approximately $15-20 million. This will take us through Phase II clinical trials which is scheduled to begin in in 2024.

Off-Balance Sheet Arrangements

We had no off-balance sheet arrangements or guarantees of third party obligations at September 30, 2023

Inflation

We believe that inflation has not had a significant impact on our operations since inception.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Not applicable.

ITEM 4: CONTROLS AND PROCEDURES

Under the supervision and the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation as of September 30, 2023, of the effectiveness of the design and operation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were not effective as of September 30, 2023. Such conclusion reflects the identification of material weakness as follows: (1) lack of accounting proficiency of our chief executive officer who is our sole officer and our principal accounting officer which has resulted in a reliance on part-time outside consultants to perform substantially all of our accounting functions, (2) a lack of adequate segregation of duties and necessary corporate accounting resources in our financial reporting process and accounting function, and (3) lack of control procedures that include multiple levels of review. Until we can remedy these material weaknesses, we have engaged third party consultants and accounting firm to assist with financial reporting.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during the three months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1: LEGAL PROCEEDINGS

None

ITEM 1A: RISK FACTORS

There have been no material changes to Nascent Biotech’s risk factors as previously disclosed in our most recent Form 10-K filing.

ITEM 2: UNREGISERED SALES OF EQUITY AND USE OF PROCEEDS.

During the six months ended September 30, 2023, two officers and a director were issued 6,433,902 shares of common stock with a value of $639,951 for service.

During the three months ended September 30, 2023, the Company issued 9,537,182 shares of common stock with a value of $367,796 for the conversion of debt and accrued interest.

During the three months ended September 30, 2023, the Company issued 100,000 shares of common stock with a value of $5,600 for service.

During the six months ended September 30, 2023, the Company issued 18,720,000 shares of common stock with a value of $1,436,000 for cash.

During the six months ended September 30, 2023, the Company issued 180,000 shares of common stock with a value of $9,000 for service.

.

ITEM 3: DEFAULT ON SENIOR SECURITIES

None

ITEM 4: MINE SAFETY INFORMATION

None

ITEM 5: OTHER INFORMATION

None.

ITEM 6: EXHIBITS

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.