Property and Equipment (Net of Accumulated Depreciation)

6 Months Ended

Jun. 30, 2016

Notes to Financial Statements

Property and Equipmentr (Net of Accumulated Depreciation)

NOTE 6 – PROPERTY AND EQUIPMENT, NET

Property and equipment consist of the following:

		June 30			December 31
		2016			2015
Building located in Calabasas, California	$	8,321,180		$	8,217,477
Furniture, fixtures and equipment		2,665,603			2,251,623
Accumulated depreciation and amortization		(2,443,941	)		(2,204,027	)
Land located in Calabasas, California		1,787,485			1,787,485
Computer software under development		172,944			168,162
Property and equipment, net	$	10,503,271		$	10,220,720

Depreciation on the Calabasas building, owned by Crusader, is computed using the straight line method over 39 years. Depreciation on furniture, fixtures and equipment in the Calabasas building is computed using the straight line method over 3 to 15 years. Amortization of leasehold improvements in the Calabasas building is being computed using the shorter of the useful life of the leasehold improvements or the remaining years of the lease.

Depreciation and amortization expense on all property and equipment for the three and six months ended June 30, 2016, was $124,631 and $239,914, respectively, and for the three and six months ended June 30, 2015, was $116,894 and $234,345, respectively.

The Calabasas building has generated rental revenue from non-affiliated tenants in the amount of $56,628 and $116,034 for the three and six months ended June 30, 2016, respectively, and $39,109 and $88,966 for the three and six months ended June 30, 2015, respectively. This rental revenue is included in “Other income” from insurance company operation in the Company’s Consolidated Statements of Operations.

The Calabasas building has incurred operating expenses (including depreciation) in the amount of $164,360 and $336,237 for the three and six months ended June 30, 2016, respectively, and $165,125 and $344,204 for the three and six months ended June 30, 2015, respectively. These operating expenses are included in “Other operating expenses” in the Company’s Consolidated Statements of Operations.