Leases

6 Months Ended

Jun. 30, 2021

Leases

Leases

6.            Leases

Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Rent expense is recognized on a straight-line basis over the lease term.

Operating lease liabilities (see below) are included in accrued liabilities and other liabilities (noncurrent) in the unaudited condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020.

All of the Company’s existing leases as of June 30, 2021 are classified as operating leases. As of  June 30, 2021, the Company had seven material operating leases for land and facilities with remaining terms expiring from 2021 through 2069 and a weighted average remaining lease term of 34.31 years. The Company has fair value renewal options for many of the Company’s existing leases, none of which are considered reasonably certain of being exercised or included in the minimum lease term. Weighted average discount rates used in the calculation of the lease liability is 3.60%. The discount rates reflect the estimated incremental borrowing rate, which includes an assessment of the credit rating to determine the rate that the Company would have to pay to borrow, on a collateralized basis for a similar term, an amount equal to the lease payments in a similar economic environment.

In November 2019, CASI Wuxi entered into a fifty-year lease agreement for the right to use state-owned land in China for the construction of a manufacturing facility. The land parcel is 74,028.40 square meters. The Company classifies this lease as an operating lease. The Company prepaid all of the lease payments for the land use right in 2019 in the amount of RMB 45 million (equivalent to $6.5 million).

During the six months ended June 30, 2021, two operating leases expired, of which, one operating lease was renewed.  

Rent expense for the six months ended June 30, 2021 and 2020 was $789,000 and $749,000, respectively. There were no variable lease costs or sublease income for leased assets for the six months ended June 30, 2021 and 2020.

Right of use assets and liabilities as of June 30, 2021 and December 31, 2020 in the condensed consolidated balance sheets were as follows:

	June 30,		December 31,
(In thousands)	2021		2020
Right of use assets	$	9,797	$	8,696
Accrued liabilities	$	1,262	$	939
Other liabilities		1,631		965
Total lease liabilities	$	2,893	$	1,904

Supplemental cash flow information related to leases was as follows:

	Six Months Ended June 30,
(In thousands)	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows	$	775	$	701
Right of use assets obtained in exchange for lease obligations:	$	1,615	$	—

A maturity analysis of the Company’s operating leases as of June 30, 2021 follows:

Future undiscounted cash flows:

(In thousands)
2021 (remaining six months)	$	654
2022		1,133
2023		787
Thereafter		373
Total		2,947
Discount factor		(54)
Lease liability		2,893
Amounts due within 12 months		1,262
Non-current lease liability	$	1,631