The Ludlow Town striker, 20, featured in last week's 2-1 reserve-team defeat to Walsall and, having trained with Shrews since, made another appearance for the second string in Wednesday night's 1-1 draw against Port Vale, scoring Shrews' opening goal.
But despite having impressed in both games and scoring against the Valiants, Simpson told the club's official website: "He did well and showed a great attitude but at present I don't think he will improve on what we've got.
"We won't be taking it any further at present and we thank Nathan. We wish him well for the future and will be keeping an eye on his development.
"He's 20 years old, which is a little older than we were originally led to believe, it's only a couple of years difference but that can make a lot of difference in football."
Meanwhile, Town suffered further injury woe during the 1-1 draw as midfielder Craig Disley had to be stretchered from the field with another knee injury. He is now being examined by the club's medical staff to assess the extent of the damage.