General and Administrative Expenses
General and administrative expenses consist primarily of legal and professional fees, wages and stock-based compensation. General and administrative expenses increased by $0.7 million for the six months ended March 31, 2022, as compared to the six months ended March 31, 2021, primarily due to increases in professional fees, settlement costs, and wage expenses, partially offset by a decrease in stock-based compensation expense.
Research and Development Expenses
Research and development expenses consist primarily of professional fees, research, development, manufacturing expenses, wages and stock-based compensation. Research and development expenses increased by $6.0 million for the six months ended March 31, 2022, as compared to the six months ended March 31, 2021, primarily due to increases in manufacturing expenses, professional fees, employee headcount, and the ramp up of research and development activities in support of our preclinical programs.
Change in Fair Value of Warrant Liabilities
Change in fair value of warrant liabilities reflects the changes in the fair value of outstanding warrants, which is primarily driven by changes in our stock price. The fair value of warrant liabilities was $0 at March 31, 2022 and September 30, 2021, therefore, no change in fair value was recognized during the six months ended March 31, 2022. We recognized a gain of $0.7 million from the change in fair value of warrant liabilities for the six months ended March 31, 2021.
Equity in Losses on Equity Method Investment
We account for our investment in DepYmed common shares using the equity method of accounting and record our proportionate share of DepYmed’s net income and losses. As of March 31, 2022 and September 30, 2021, the carrying value of our investment in DepYmed common shares was reduced to zero, therefore, during the six months ended March 31, 2022, we recorded our share of equity losses to the extent of our investment in preferred shares of DepYmed. We will continue to monitor the operating results of DepYmed and will record equity in earnings when the equity in earnings exceeds our previously unrecognized losses. Equity in losses was $0.4 million for the six months ended March 31, 2022, and $0.06 million for the six months ended March 31, 2021.
Other Income, net
We recognized other income of $0.3 million during the six months ended March 31, 2021 related to the sale of certain intellectual property to DepYmed in exchange for shares of Series A-4 preferred stock. There was an immaterial amount of other income recognized during the six months ended March 31, 2022.
Liquidity, Capital Resources and Financial Condition
We have had no revenues from product sales and have incurred operating losses since inception. As of March 31, 2022, we had cash and cash equivalents of $39.0 million. We have historically funded our operations through the sale of common stock and the issuance of convertible notes and warrants.
We expect to continue to incur significant operating losses for the foreseeable future and may never become profitable. As a result, we will likely need to raise additional capital through one or more of the following: the issuance of additional debt or equity or the completion of a licensing transaction for one or more of our pipeline assets.
Net working capital decreased from September 30, 2021 to March 31, 2022 by $15.5 million (to $35.2 million from $50.7 million). Our quarterly cash burn has increased compared to prior periods due to increased research and development and corporate activities, and we expect it to continue to increase in future periods.
At present, we have no bank line of credit or other fixed source of capital reserves. Should we need additional capital in the future, we will be primarily reliant upon a private or public placement of our equity or debt securities, or a strategic transaction, for which there can be no warranty or assurance that we may be successful in such efforts. If we are unable to maintain sufficient financial resources, our business, financial condition and results of operations will be materially and adversely affected. This could affect future development and business activities and potential future clinical studies and/or other future ventures. Failure to obtain additional equity or debt