NIH Contract

3 Months Ended

Mar. 31, 2022

NIH ContractIn 2020, we were awarded the NIH Contract under the RADx program to support the expansion of our production capacity and throughput capabilities for COVID-19 testing with our microfluidics technology. We completed the required milestones in 2021 and received the total NIH Contract value of $34.0 million. Proceeds from the NIH Contract have been used primarily for capital expenditures to expand production capacity and, to a lesser extent, to offset applicable operating costs. Grant proceeds that exceed the cost of the capital expenditures and expenses that have been and are expected to be incurred are recorded in other non-operating income.

The following table summarizes the activity under the NIH Contract as of March 31, 2022 and December 31, 2021 (in thousands):


	March 31, 2022		December 31, 2021
Cash receipts from milestones achieved	$	34,016	$	34,016
Cumulative amounts applied against operating costs (excluding depreciation)	(4,526)		(4,522)
Cumulative amounts applied against depreciation expense for assets placed in service	(1,510)		(703)
Cumulative amounts recognized as non-operating income	(7,140)		(7,140)
Total deferred grant income	$	20,840	$	21,651


Assets placed in service, gross	$	20,425	$	16,890
Construction-in-progress	937		3,909
Cumulative amounts applied against depreciation expense	(1,510)		(703)
Carrying value of property and equipment, net	19,852		20,096

Estimated future capital expenditures	988		1,555
Total deferred grant income	$	20,840	$	21,651


Deferred grant income, current	$	3,603	$	3,535
Deferred grant income, non-current	17,237		18,116
Total deferred grant income	$	20,840	$	21,651

Deferred grant income, current on the condensed consolidated balance sheet represents amounts expected to be offset against depreciation expense over the next twelve months. Deferred grant income, non-current includes amounts expected to be offset against depreciation expense in later periods.

We expect to spend $22.4 million on capital expenditures associated with the NIH Contract. We have incurred $21.4 million of capital expenditures through March 31, 2022, of which $20.4 million has been placed in service, while the remaining $0.9 million is included in construction-in-progress (See Note 8). We expect to place the remaining equipment in service by the end of the first half of 2022.