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

NASCENT BIOTECH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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

NASCENT BIOTECH, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(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.

In July, 2014, Jin-En entered into an Exchange Agreement with an entity formerly known as Nascent Biotech, Inc., a Nevada corporation which is now known as Nascent Biologics, Inc. (“Biologics”).  As part of the Exchange Agreement, Jin-En changed its name to “Nascent Biotech Inc.” and the entity formerly known as “Nascent Biotech, Inc.”, changed its name to Nascent Biologics, Inc. and became the Company’s wholly owned subsidiary.

The Company is actively developing its primary asset 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 pre-clinical stage 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. Due toOn March 15, 2021, the low potency testing of the initial lot, this drug substance will not be used in theCompany opened phase1 clinical trials.

On October 30, 2020 the Company filed additional data requests and additional testing of the product and additional materials to answer specific questions from the FDA to remove the partial clinical hold.

The Company has an open clinical trial to begin clinical trials on brain cancer patients projected to start January, 2021.

NOTE 2 -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 SeptemberJune 30, 2020 and 20192021 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, 2020.2021. 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.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Nascent Biotech, Inc. and its wholly-owned subsidiary Nascent Biologics, Inc. All intercompany accounts and transactions have been eliminated.

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases. The main provisions of ASU No. 2016-02 require management to recognize lease assets and lease liabilities for all leases. ASU 2016-02 retains a distinction between finance leases and operating leases. The classification criteria for distinguishing between finance leases and operating leases are substantially similar to the classification criteria for distinguishing between capital leases and operating leases in the previous release’s guidance. The result of retaining a distinction between finance leases and operating leases is that under the lessee accounting model, the effect of leases in the statement of comprehensive income and the statement of cash flows is largely unchanged from previous U.S. GAAP. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures.

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 Black-Scholes 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’smanagement'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 Company accountsamendments 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 stock-based compensationthose areas. Topic 606 includes implementation guidance on (a) contracts with customers to employeestransfer goods and consultantsservices 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 FASB ASC 718. Stock-based compensation to employees is measured at the grant date, basedcore 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 faircut 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 award, and isrevenue recognized as expense over the requisite employee service period. The Company accounts for stock-based compensation to other than employees in accordance with FASB ASC 505-50. Equity instruments issued to other than employees are valued at the earlier of a commitment date or upon completion of the services, based on the fair value of the equity instruments and is recognized as expense over the service period. The Company estimates the fair value of stock-based payments using the Black Scholes option-pricing model for common stock options and warrants and the closing price of the Company’s common stock for common share issuances.from these contracts.

The Company has one revenue stream, which is the milestone payments of the license agreement with BioRay Pharmaceutical which is not earned or billed until the milestone per the agreement is met.

Accounts receivable

Accounts receivable are carried at face value less any provisions for uncollectible amounts. Accounts receivable are receivables from a license agreement. No allowance for bad debt was considered necessary for the three months ended June 30, 2021 and 2020, respectively.

Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts payable and accrued expenses and shareholder loans. The carrying amount of these financial instruments approximates fair value due either to length of maturity or interest rates that approximate prevailing market rates unless otherwise disclosed in these financial statements.

Financial assets and liabilities recorded at fair value in our condensed consolidated balance sheets are categorized based upon a fair value hierarchy established by GAAP, which prioritizes the inputs used to measure fair value into the following levels:

Level 1 –1– Quoted market prices in active markets for identical assets or liabilities at the measurement date.

Level 2 –2– Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable and can be corroborated by observable market data.

Level 3 –3– Inputs reflecting management’s best estimates and assumptions of what market participants would use in pricing assets or liabilities at the measurement date. The inputs are unobservable in the market and significant to the valuation of the instruments.

A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

The following table summarizes the change in the fair value of the derivative liabilities during the three and six months ended June 30, 2020:2021:

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 a working capital deficit 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 remains at 11% of the outstanding shares of the Company. The following table sets forth the shares earned under these contracts for the two active officers as of SeptemberJune 30, 2020:2021:

DuringAs of June 30, 2021, the year ended March 31, 2020 the Board of Directors amended the compensation plan so that the total amount per the officer agreements allow for the accrual of the full amountCompany had $55,500 due each officer per their contract. The table below sets forth the annual amounts per the contracts:to officers and directors.

On June 5, 2019, two officers and directors of the Company converted $99,000 of accrued fees into 639,536 shares of common stock at $0.1548 per share.

On July 11, 2019, an officer and director of the Company advanced the Company $10,000. The advance was on demand and bears no interest. On July 26, 2019, the Company repaid the $10,000 advance to the officer and director of the Company.

During the six months ended September 30, 2019 the Company issued 165,372 shares of common stock to three officers and a director for service with a value of $29,241.

During the six month period ended September 30, 2019 the Company paid the related parties (three officers and directors) $59,000 in consulting fees in cash and accrued $120,710 of the consulting fees for a total of $179,710. In addition $6,209 in expenses were accrued for the related parties.

During the six months period ended September 30, 2019, Company paid $4,000 plus had an outstanding accrual of $9,000 with a related party and Chairman of the Scientific Board. During the same period in 2018, Company paid the same related party $9,000 in consulting fees and accrued $6,000 of the fees.

During the six months ended September 30, 2020 four officers and directors were issued 2,925,115 shares of common stock with a value of $247,655 for service.

During the six months period ended September 30, 2020 three officers of the Company converted $1,387,872 of accrued compensation into 13,831,101 shares of common stock of the Company.

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 officers and directors equaling 18% of the outstanding shares of the Company as additional future shares are issued. The officers and directors are entitled to additional future shares so their aggregate ownership percentage remains at 18% of the future outstanding shares of the Company. In addition,Company

During the officers ae entitled to future bonuses including a signing bonus totaling $170,000 which was accrued during the period ending Septemberthree months ended June 30, 2020 plus additional bonuses based on their performance.three officers and directors were issued 2,007,000 shares of common stock with a value of $190,915 for service.

During the three months period ended June 30, 2020 three officers of the Company converted $1,387,872 of accrued compensation into 13,831,101 shares of common stock of the Company.

During the three months ended June 30, 2021 three officers and directors were issued 568,719 shares of common stock with a value of $59,716 for service.

During the three months period ended June 30, 2021 a director of the Company converted $23,332 of accrued compensation into 307,010 shares of common stock of the Company.

NOTE 5 -– EQUITY

Preferred

On July 25, 2019, the Company issued 110,000 shares of series A convertible preferred to one entity with a value of $110,000 for cash. Each share of series A preferred is convertible after 180 days to four shares of common stock or at the lowest of: (i) the fixed conversion price; (ii) the equitant of 70% of the lowest closing price for the 20 days prior to the conversion of the preferred shares.

shares plus 7% per annum interest. 

During the six months period ended September 30, 2020 the Company issued 740,000 shares of Series A preferred stock and 3,700,000 warrants; 640,000 for $640,000 in cash and $100,000 for debt. The stock is convertible into common stock at 10 cents per share or 50% of the lowest trading price, whichever is lower 5 days prior to conversion. The Company has the right to convert the shares nine months after the issuance. The warrants are convertible at $0.15 per share within two years of issuance. In addition the Company agreed to filing an S-1 by September 21, 2020 for the common stock to be converted and the underlying common shares for the warrants. The S-1 has not been filed.

During the sixthree months ended SeptemberJune 30, 2020 the Company issued 1,352,529 shares of common stock for the conversion of 60,000 shares of preferred stock. As of June 30, 2020 the number of preferred shares outstanding was zero.

Common

On June 5, 2019, two officers and directors of the Company converted $99,000 of accrued fees into 639,536 shares of common stock at $0.1548 per share.

During June 2019, two warrant holders exercised 21,427 warrants for common stock at $0.05 per share for cash of $1,071.

During the six months period ended September 30, 2019 Company issued 300,000 shares of common stock to two entities with a value of $47,300 for service.

During the sixthree months ended September 30, 2019, the Company issued 165,372 shares of common stock to three officers and a director for service with a value of $29,241.

During the six months ended SeptemberJune 30, 2020 the Company issued 98,71535,715 shares of common stock with a value of $10,875$5,000 for settlement of accounts payable.

During the Sixthree months ended SeptemberJune 30, 2020 the Company issued 1,405,572677,000 shares of common stock with a value of $136,245$85,440 for service.

During the sixthree months ended SeptemberJune 30, 2020 the Company issued 1,352,529 shares of common stock for the conversion of 60,000 shares of preferred stock.

During the sixthree months ended SeptemberJune 30, 2020 three officers and a directordirectors were issued 2,925,1152,007,000 shares of common stock with a value of $247,655$190,915 for service.

During the six months ended September 30, 2020, the Company issued 2,677,397 shares of common stock for the conversion of $150,000 of convertible debt.

During the sixthree months period ended SeptemberJune 30, 2020 three officers of the Company converted $1,387,872 of accrued compensation into 13,831,101 shares of common stock of the Company.

During the three months ended June 30, 2021 three officers and directors were issued 568,719 shares of common stock with a value of $59,716 for service.

During the three months period ended June 30, 2021 a director of the Company converted $23,332 of accrued compensation into 307,010 shares of common stock of the Company.

During the three months ended June 30, 2021 the Company issued 50,000 shares of common stock with a value of $5,250 for service.

NOTE 6 -– OPTIONS

As of June 30, 20192021, there was no option expenses recognized by the Company and the balance of unrecognized option expense was zero.

The following sets forth the options granted and outstanding during the sixthree months ended SeptemberJune 30, 2020:2021: