S-1/A: Nascent Biotech Seeks to Raise $4.175 Million Through Stock Offering to Fund Clinical Trials

Nascent Biotech aims to raise capital for Phase 2 clinical trials and administrative expenses through a stock offering involving the sale and resale of common stock and warrants.

Summary

• Nascent Biotech has filed an amendment to its Form S-1 registration statement to register the sale and resale of up to 32,250,000 shares of common stock.
• This includes 20,000,000 shares offered by the company at a fixed price of $0.12 per share, 1,250,000 shares issuable upon conversion of convertible debentures, 1,000,000 shares issuable upon exercise of warrants at $0.05 per share, and 10,000,000 shares held by a selling security holder.
• The company intends to use the proceeds from the sale of its shares to fund Phase 2 clinical trials of its drug and for general and administrative expenses.
• The offering is self-underwritten on a best efforts basis, with no minimum number of shares required to be sold.
• The offering will commence upon the SEC declaring the prospectus effective and will continue for 365 days, unless terminated earlier by the board of directors.
• The company's common stock is quoted on the OTCQB under the symbol NBIO, with the last reported sale price on March 11, 2024, at $0.15.
• The company is an emerging growth company and a smaller reporting company, which allows it to take advantage of certain reduced public company reporting requirements.

Sentiment

Score: 4

Explanation: The document presents a mixed picture. While the company has achieved some milestones, such as FDA clearance for Phase 2 clinical trials, it faces significant financial challenges, including a history of operating losses, negative working capital, and substantial doubt about its ability to continue as a going concern. The need for additional capital raises and the competitive landscape add to the uncertainty.

Positives

• The company has been cleared to begin Phase 2 clinical trials by the United States Federal Drug administration in October 2023.
• The company has regained worldwide rights for development and distribution of Pritumumab.
• The company has been granted orphan drug designation for use of Pritumumab against gliomas and pancreatic cancer by the US Food & Drug Administration.

Negatives

• The offering price of $0.12 per share bears no relationship to the company's assets, book value, earnings, or any other customary investment criteria.
• The company has a history of operating losses and no meaningful operations upon which to evaluate its business.
• The company's auditors have expressed substantial doubt about its ability to continue as a going concern.
• The company's stock is considered a penny stock, which makes it more difficult for investors to sell their shares.

Risks

• Investing in the company's common stock involves a high degree of risk.
• The company currently has no product revenues and no products approved for marketing.
• The company will need to raise additional capital to operate its business, which may not be available on favorable terms.
• The outcome of the lengthy and complex process of developing new products is inherently uncertain and involves a high degree of risk and cost.
• The company's stock price may be volatile.
• The company may in the future issue additional shares of its common stock, which would reduce investors' ownership interests in the company and which may dilute its share value.

Future Outlook

The company expects to incur substantial losses and negative operating cash flow for the foreseeable future as it commences clinical trials of its drug candidates, which it does not expect will be commercially available for several years, if at all.

Industry Context

The development and commercialization of new products to treat cancer is highly competitive, and the company expects considerable competition from major pharmaceutical, biotechnology, and specialty cancer companies.

Comparison to Industry Standards

• The company's potential competitors include Genentech, Merk, Roche, Takeda, Array Biopharma and Ambit Biosciences.
• Many of these competitors have substantially more resources than Nascent Biotech, including both financially and technically.
• Many of the company's competitors have more experience in clinical development, manufacturing, regulatory and global commercialization.

Related Party Transactions

• The company has entered into compensation agreements with its officers and directors, issuing shares of common stock to maintain their ownership percentage.
• During the year ended March 31, 2023, the company issued 3,815,414 shares of common stock with a value of $624,320 to three related parties for services.

Stakeholder Impact

• Shareholders may experience dilution due to the issuance of additional shares of common stock.
• The company's ability to continue as a going concern is dependent on raising additional financial support.
• The company's success is dependent on the ability of its officers and directors to develop pharmaceutical products.

Next Steps

• Commence Phase II clinical trials in the United States with Pritumumab.
• Continue to evaluate the application of Pritumumab in the treatment of other unmet ectodomain vimentin positive cancer types such as pancreatic.
• Seek a partner to continue development of Pritumumab as an aerosol type treatment for viral infections.

Key Dates

Keywords

common stock, clinical trials, Pritumumab, offering, biotech, Nascent Biotech, warrants, convertible debt, securities, FDA