Leases

9 Months Ended

Sep. 30, 2022

Leases

Leases

8.            Leases

Right of use (“ROU”) assets and liabilities for operating leases 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.

Liabilities for operating lease are included in accrued and other current liabilities and other liabilities (noncurrent) in the consolidated balance sheets as of September 30, 2022 and December 31, 2021.

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).

Rent expense for the nine months ended September 30, 2022 and 2021 was $1.0 million and $1.2 million, respectively. There were no variable lease costs or sublease income for leased assets for the nine months ended September 30, 2022 and 2021.

Right of use assets and liabilities as of September 30, 2022 and December 31, 2021 on the condensed consolidated balance sheets were as follows:

	September 30,		December 31,
(In thousands)	2022		2021
Right of use assets	$	7,666	$	9,107
Accrued and other current liabilities	$	922	$	1,061
Other liabilities		634		1,105
Total lease liabilities	$	1,556	$	2,166

Supplemental cash flow information related to leases was as follows:

	Nine Months Ended September 30,
(In thousands)	2022		2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows	$	859	$	1,087
Right of use assets obtained in exchange for lease obligations:	$	421	$	1,661

All of the Company’s existing leases as of September 30, 2022 and December 31, 2021 were classified as operating leases. As of September 30, 2022 and December 31, 2021, the Company had seven and eight, respectively, material operating leases for land and facilities with remaining terms expiring from 2023 through 2069 and a weighted average remaining lease term of 37.92 years and 36.47 years, respectively. 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 as of September 30, 2022 and December 31, 2021 were 3.53% and 3.56%, respectively. 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.

A maturity analysis representing the future undiscounted cash flow of the Company’s operating leases liabilities as of September 30, 2022 is as follows:

(In thousands)
2022 (remaining three months)	$	266
2023		871
2024		456
Thereafter		12
Total		1,605
Discount factor		(49)
Lease liability		1,556
Amounts due within 12 months		922
Non-current lease liability	$	634