United States securities and exchange commission logo
January 6, 2023
Larry Zhang
Principal Financial Officer
CASI Pharmaceuticals, Inc.
9620 Medical Center Drive
Suite 300
Rockville, MD 20850
Re: CASI
Pharmaceuticals, Inc.
Form 10-K for the
Fiscal Year Ended December 31, 2021
Form 10-Q for the
Interim Period Ended September 30, 2022
File No. 000-20713
Dear Larry Zhang:
We have reviewed your December 16, 2022 response to our comment
letter and have the
following comments. In some of our comments, we may ask you to provide
us with information
so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response to these comments, we may have
additional
comments. Unless we note otherwise, our references to prior comments are
to comments in our
December 7, 2022 letter.
Form 10-K for the Fiscal Year Ended December 31, 2021
Part I
Item 1. Business, page 4
1. We note your proposed
revisions in response to prior comment 1. In future filings, please
revise the diagram of
your corporate structure to indicate who owns the remaining 20%
of CASI Pharmaceuticals
(Wuxi) Co., Ltd.
2. We note your proposed
revisions to the risk factors section in response to prior comment
2. In future filings,
please also revise Item 1. Business to provide prominent disclosure
about the legal and
operational risks associated with being based in or having the majority
of the company s
operations in China. Your disclosure should make clear whether these
Larry Zhang
FirstName LastNameLarry
CASI Pharmaceuticals, Inc.Zhang
Comapany
January NameCASI Pharmaceuticals, Inc.
6, 2023
January
Page 2 6, 2023 Page 2
FirstName LastName
risks could result in a material change in your operations and/or the
value of your
securities or could significantly limit or completely hinder your
ability to offer or continue
to offer securities to investors and cause the value of such
securities to significantly
decline or be worthless. Your disclosure should address how recent
statements and
regulatory actions by China s government, such as those related to
data security or anti-
monopoly concerns, have or may impact the company s ability to
conduct its business,
accept foreign investments, or list on a U.S. or other foreign
exchange.
3. We note your proposed revisions to the risk factors section in
response to prior comment
3. In future filings, please also revise Item 1. Business to
prominently disclose that your
auditor is subject to the determinations announced by the PCAOB on
December 16,
2021 and disclose whether and how the Holding Foreign Companies
Accountable Act and
related regulations will affect your company. In addition, disclose
that trading in your
securities may be prohibited under the Holding Foreign Companies
Accountable Act if the
PCAOB determines that it cannot inspect or investigate completely your
auditor, and that
as a result an exchange may determine to delist your securities.
4. We note your proposed revisions in response to prior comment 4. In
future filings, please
also revise Item 1. Business to provide a clear description of how
cash is transferred
through your organization. Disclose your intentions to distribute
earnings. Quantify any
cash flows and transfers of other assets by type that have occurred
between the holding
company and its subsidiaries, and direction of transfer. Quantify any
dividends or
distributions that a subsidiary has made to the holding company and
which entity made
such transfer, and their tax consequences. Similarly quantify
dividends or distributions
made to U.S. investors, the source, and their tax consequences. Your
disclosure should
make clear if no transfers, dividends, or distributions have been made
to date. Describe
any restrictions on foreign exchange and your ability to transfer cash
between entities,
across borders, and to U.S. investors. Describe any restrictions and
limitations on your
ability to distribute earnings from the company, including your
subsidiaries, to the parent
company and U.S. investors. We also note your disclosure that CASI
Pharmaceuticals,
Inc. paid service fees of $19.5 million to CASI Pharmaceuticals
(China) Co., Ltd. in the
year ended December 31, 2021 and that no assets other than cash were
transferred through
the organization during that time. Please revise to make it clear
whether the service fees
were the only cash that was transferred during the fiscal year. If
not, please specifically
disclose the other transfers that were made.
5. We note your proposed revisions to the risk factors section in
response to prior comment
5. In future filings, please also revise Item 1. Business to disclose
each permission or
approval that you or your subsidiaries are required to obtain from
Chinese authorities to
operate your business and to offer securities to foreign investors.
State whether you or
your subsidiaries are covered by permissions requirements from the
China Securities
Regulatory Commission (CSRC), Cyberspace Administration of China (CAC)
or any
other governmental agency that is required to approve your operations,
and state
affirmatively whether you have received all requisite permissions or
approvals and
Larry Zhang
CASI Pharmaceuticals, Inc.
January 6, 2023
Page 3
whether any permissions or approvals have been denied. Please also
describe the
consequences to you and your investors if you or your subsidiaries:
(i) do not receive or
maintain such permissions or approvals, (ii) inadvertently conclude
that such permissions
or approvals are not required, or (iii) applicable laws, regulations,
or interpretations
change and you are required to obtain such permissions or approvals in
the future.
Item 1 A. Risk Factors, page 20
6. We note your proposed revision to add a risk factor in response to
prior comment 6 and
re-issue. In your summary of risk factors, disclose the risks that
your corporate structure
and being based in or having the majority of the company s
operations in China poses to
investors. In particular, describe the significant regulatory,
liquidity, and enforcement
risks. For example, specifically discuss risks arising from the legal
system in China,
including risks and uncertainties regarding the enforcement of laws
and that rules and
regulations in China can change quickly with little advance notice;
and the risk that the
Chinese government may intervene or influence your operations at any
time, or may exert
more control over offerings conducted overseas and/or foreign
investment in China-based
issuers, which could result in a material change in your operations
and/or the value of
your securities. Acknowledge any risks that any actions by the Chinese
government to
exert more oversight and control over offerings that are conducted
overseas and/or foreign
investment in China-based issuers could significantly limit or
completely hinder your
ability to offer or continue to offer securities to investors and
cause the value of your
securities to significantly decline or be worthless.
General
7. Please provide us with a copy of your proposed disclosure for comments
one through six
in your response letter.
You may contact Christine Torney at 202-551-3652 or Kevin Vaughn at
202-551-3494 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Ada Sarmento at 202-551-3798 or Joe McCann at 202-551-6262 with any
other
questions.
FirstName LastNameLarry Zhang Sincerely,
Comapany NameCASI Pharmaceuticals, Inc.
Division of
Corporation Finance
January 6, 2023 Page 3 Office of Life
Sciences
FirstName LastName