7. PROPERTY AND EQUIPMENT, NET

Property and equipment, net consists of the following:

SCHEDULE OF PROPERTY, PLANT AND EQUIPMENT 

During 2022, as a result of changing consumer habits resulting in poor performance and the ultimate closure of certain stores, the Company determined that triggering events occurred requiring management to review certain long-lived assets for impairment and determined that the carrying value of the Company’s property and equipment were impaired. As a result, an impairment charge of approximately $0.8 million was recorded for the year ended December 31, 2022, which is included in asset impairment charges in our consolidated statement of operations.

During 2021, primarily as a result of the COVID-19 outbreak that had a significant impact throughout the hospitality industry, the Company determined that triggering events occurred requiring management to review certain long-lived assets for impairment and determined that the carrying value of the Company’s property and equipment were impaired. As a result, an impairment charge of approximately $0.4 million was recorded for the year ended December 31, 2021, which is included in asset impairment charges in our consolidated statements of operations. The impact of COVID-19 varied by state/geographical area within the United States at various intervals during the pandemic and, therefore, the operating results and cash flows at the store level varied significantly.

We recognized depreciation expense of $0.5 million and $0.6 million during years ended December 31, 2022 and 2021, respectively.