Gain on Extinguishment of Notes Payable
Gain on extinguishment of notes payable for the three-month period ended March 31, 2021 of $839,945 relates to the full forgiveness of our Paycheck Protection Program (“PPP”) loan. The gain on extinguishment represents the carrying value of the loan on the forgiveness date.
Transaction cost allocated to warrant liabilities
Transaction cost allocated to warrant liabilities for the three-month period ended March 31, 2022 was $391,335.
Unrealized gain on change in fair value of the Common Warrants
Unrealized gain on change in fair value of Common Warrants for the three-month period ended March 31, 2022 of $782,500 relates to the change in fair value of the Common Warrants issued as part of the Offering (see Note E of the accompanying condensed consolidated financial statements). The gain on change in fair value represents the difference between the fair value of the Common Warrants on the issuance date compared to the fair value as of March 31, 2022.
Net Loss
Net loss increased $242,719 or 16% to $1,759,757 for the three-month period ended March 31, 2022 compared to $1,517,078 for the three-month period ended March 31, 2021 due to the factors noted above.
Comparison of Results of Operations for the Six-Month Periods Ended March 31, 2022 and 2021
Revenues
Product revenues
For the six-month periods ended March 31, 2022, and 2021, we generated $1,234,662 and $1,515,207 in revenues from product sales, respectively. Product revenues decreased by $280,545 or 19% for the six-month period ended March 31, 2022, as compared to the six-month period ended March 31, 2021. The decrease in product revenues was primarily related to an decrease of approximately $650,000 in sales of our LineaTM COVID-19 Assay Kit, which was attributable to sales pursuant to our contract with Stony Brook University Hospital offset by an increase of $411,000 of sales in the textile market relating to protecting the cotton supply chain, as well as shipment of a DNA transfer unit for the tagging of cotton in Egypt.
Service revenues
For the six-month periods ended March 31, 2022, and 2021, we generated $387,963 and $444,826 in revenues from sales of services, respectively. The decrease in service revenues of $56,863 or 13% for the six-month period ended March 31, 2022, as compared to the same period in the prior fiscal year is attributable to a decrease of approximately $110,000 for research and development projects in our pharmaceutical/nutraceutical markets offset by a $44,000 increase in biopharmaceutical markets.
Clinical laboratory service revenues
For the six-month periods ended March 31, 2022 and 2021 we generated $8,690,364 and $2,327,650 in revenues from our clinical laboratory testing services, respectively. Clinical laboratory testing service revenues increased by $6,362,714, or 273% for the six-month period ended March 31, 2022, as compared to the same period in the prior fiscal year. The increase in revenue is primarily due to an increase in demand for COVID-19 testing services during the first half of fiscal 2022 compared to the same period during fiscal 2021. Of this increase, approximately $5,308,000 in testing services related to our contract with the City University of New York, which began testing in August 2021.
Gross Profit
Gross profit for the six-month period ended March 31, 2022, increased by $766,289 or 27% from $2,831,344 for the six-month period ended March 31, 2021 to $3,597,623. The gross profit percentage was 35% and 66% for the six-month periods ended March 31, 2022