Real Estate, Property and Equipment, Net

6 Months Ended

Jun. 30, 2022

Property, Plant and Equipment [Abstract]

Real Estate, Property and Equipment, Net

3. Real Estate, Property and Equipment, Net

Property and equipment, net, consists of the following:

Memory Care Facilities and Corporate

	Estimated Useful Lives	June 30, 2022			December 31, 2021
Land		$	1,255,477		$	1,255,477
Building and building improvements	39 years		4,508,797			4,508,797
Furniture, fixtures, and equipment	3-7 years		6,116,223			5,127,466
Total			11,880,497			10,891,740
Less accumulated depreciation			(3,708,785	)		(3,472,904	)
Real estate, property and equipment, net		$	8,171,712		$	7,418,836

Non-core businesses classified as assets held for sale:

	Estimated Useful Lives	June 30, 2022			December 31, 2021
Land		$	1,007,735		$	1,688,070
Building and building improvements	39 years		466,447			466,447
Other	3-5 years		-			-
Total			1,474,182			2,154,517
Less: accumulated depreciation			(68,272	)		(68,272	)
Real estate, property and equipment, net		$	1,405,910		$	2,086,245

The Company recorded depreciation expense relating to real estate, property, and equipment for the Company’s memory care facilities and corporate assets in the amount of $185,044 and $372,259 for the three and six months ended June 30, 2022 respectively while depreciation for three and six months ended June 30, 2021 was $129,665 and 304,124, respectively.

The Company has reviewed the carrying value of long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If there is an indication that the value of an asset is not recoverable, the Company determines the amount of impairment loss, if any, by comparing the historical carrying value of the asset to its estimated fair value. The Company determined estimated fair value based on input from market participants, the Company’s experience selling similar assets, market conditions and internally developed cash flow models that the Company’s assets or asset groups are expected to generate, and the Company considers these estimates to be a Level 3 fair value measurement.

Based on the Company’s review of carrying value of long-lived assets included in discontinued operations, the Company concluded that a)several of its properties were sold and did not warrant consideration; b) certain properties belonging to their continuing operations segment generate revenue, are cash flow positive and have assets with low carrying values as compared to the recoverable amounts and therefore do not meet impairment requirements; and that c) several properties might be impaired due to extended closures. Both the SeaWorld and Buda hotels have experienced extended closures since March, 2020 due to the COVID-19 pandemic and this has meant significant reductions in cash flows and on the ability to repay the mortgage loans on the properties.

Clearday, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements