Quarterly report pursuant to Section 13 or 15(d)

Property and Equipment, Net

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Property and Equipment, Net
 3 Months Ended
Mar. 31, 2021
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net

4. PROPERTY AND EQUIPMENT, NET

 

Property and equipment, net consists of the following:

 

    March 31, 2021     December 31, 2020  
Leasehold improvements   $ 6,920,113     $ 7,301,908  
Restaurant furniture and equipment     1,978,555       2,132,726  
Construction in progress     650       5,450  
Office and computer equipment     112,073       125,535  
Office furniture and fixtures     59,635       59,635  
      9,071,026       9,625,254  
Accumulated depreciation and amortization     (5,899,016 )     (5,922,360 )
    $ 3,172,010     $ 3,702,894  

 

The COVID-19 outbreak in the United States has resulted in a significant impact throughout the hospitality industry. The impact has varied by state/geographical area within the United States at various intervals since the pandemic has been declared. Accordingly, the operating results and cash flows at the store level have varied significantly leading to an analysis of impairment at the store level for each quarter end beginning at the end of the first quarter of 2020 and continuing through March 31, 2021. Several stores were permanently or temporarily closed during 2020 and 2021 while others are operating at reduced capacity. Based on the assessment of recoverability, an impairment charge of approximately $255,000 was recorded for property and equipment during the three months ended March 31, 2021. No impairment was recorded during the three months ended March 31, 2020.

 

Depreciation expense was $277,563 and $324,872 for the three months ended March 31, 2021 and 2020, respectively.