4. Investment in Equity Securities, at fair value and long-term investments
The Company has an equity investment in the common stock of a publicly traded company. The fair value of this security was measured using its quoted market price, a Level 1 input, and was approximately $0.9 million as of June 30, 2020 and $0.6 million as of December 31, 2019 (see Note 16).
The following table summarizes the Company’s investment as of June 30, 2020:
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Gross
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(In thousands)
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unrealized
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Aggregate fair
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Description
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Classification
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Cost
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gains
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value
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Common stock
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Investment
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$
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—
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$
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934
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$
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934
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Unrealized gains or (losses) on the Company’s equity investment for the three and six months ended June 30, 2020 and 2019 were $324,000, $309,000, $(241,000) and $(196,000), respectively, and are recognized as change in fair value of investment in equity securities in the accompanying unaudited condensed consolidated statements of operations and comprehensive loss.
In April 2019, in conjunction with its license agreement entered into with Black Belt (see Note 2), the Company made a 2 million euros ($2,249,600) equity investment in a newly established, privately held UK Company, Black Belt Tx Ltd ("Black Belt Tx").
In June 2019, in conjunction with its license agreement entered into with Juventas (see Note 2), the Company, through its China subsidiary, made an RMB 80 million ($11,788,000) equity investment in Juventas, a privately held, China-based company.
In June 2020, the Company entered into one-year loan agreement with Juventas in the amount of RMB 30,000,000 (approximately $4,243,000) with an annual interest rate of 20%. The loan is recorded in loan receivable from a related party in the accompanying unaudited consolidated condensed balance sheets. Beijing Fuyuan Zhiyuan Biotechnology Partnership (Limited Partnership), the major shareholder of Juventas, irrevocably and unconditionally guarantees to CASI the due and punctual payment in full of the loan. For the three and six months ended June 30, 2020, the Company recognized interest income of $24,000.
As the Company does not have significant influence over operating and financial policies of Black Belt Tx Ltd and Juventas, and the equity interests do not have readily determinable fair value, the investments in Black Belt TX Ltd and Juventas are stated at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment. The Company did not record any adjustments or impairments during the three and six months ended June 30, 2020.
5. Inventories
Inventories at June 30, 2020 and December 31, 2019 consisted of the following:
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(In thousands)
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June 30, 2020
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December 31, 2019
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Finished goods
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$
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430
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$
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4,514
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Raw materials
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—
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28
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Total
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$
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430
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$
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4,542
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No provisions to write down the carrying amount of inventory have been recorded in the three and six months ended June 30, 2020 and 2019.
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 consolidated balance sheets as of June 30, 2020 and December 31, 2019.