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Redeemable Noncontrolling Interest
9 Months Ended
Sep. 30, 2020
Redeemable Noncontrolling Interest  
Redeemable Noncontrolling Interest

11.         Redeemable Noncontrolling Interest

On December 26, 2018, the Company, together with Wuxi Jintou Huicun Investment Enterprise, a limited partnership organized under Chinese law (“Wuxi LP”) established CASI Wuxi to build and operate a manufacturing facility in the Wuxi Huishan Economic Development Zone in Jiangsu Province, China. The Company holds 80% of the equity interests in CASI Wuxi and will invest, over time, $80 million in CASI Wuxi. The Company’s investment will consist of (i) $21 million in cash (paid in February 2019), (ii) a transfer of selected ANDAs valued at $30 million (transferred in May 2019), and (iii) an additional $29 million cash payment within three years from the date of establishment of CASI Wuxi. Wuxi LP holds 20% of the equity interest in CASI Wuxi through its investment in RMB of $20 million in cash (paid in March 2019). As the transfer of ANDAs valued at $30 million was to the Company’s consolidated subsidiary (CASI Wuxi), the Company recognized the transfer of the ANDAs at their carrying value and did not recognize a gain on the transfer.

The investment of Wuxi LP in CASI Wuxi is treated as redeemable noncontrolling interest and is classified outside of permanent equity on the consolidated balance sheets because (1) the noncontrolling interest is not mandatorily redeemable financial instruments, and (2) it is redeemable at the option of the holder, or upon the occurrence of an event that is not solely within the control of the Company. Accretion of the carrying amount of redeemable noncontrolling interest to the redemption value is recorded in additional paid-in capital.

Changes in redeemable noncontrolling interest during the three and nine month periods ended September 30, 2020 and 2019 are as follows:

Three Months Ended

Nine Months Ended

(In thousands)

September 30, 2020

September 30, 2019

September 30, 2020

September 30, 2019

Balance at beginning of period

    

$

21,074

    

$

20,237

$

20,670

    

$

Cash contribution by Wuxi LP

 

 

 

 

20,000

Share of CASI Wuxi (net loss)/income

(309)

 

(23)

 

(584)

 

53

Accretion of redeemable noncontrolling interest

506

 

245

 

1,185

 

406

Balance at end of period

$

21,271

 

$

20,459

$

21,271

 

$

20,459