Blüm Holdings Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS, NET

9 Months Ended

Sep. 30, 2017

NOTE 6. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS

Property, equipment, and leasehold improvements, net consists of the following:

	September 30,			December 31,
	2017			2016

Land and Building	$	1,316,087		$	1,454,124
Furniture and Equipment		3,467,647			3,141,244
Computer Hardware and Software		457,535			396,479
Leasehold Improvements		8,785,307			7,568,465
Construction in Progress		834,220			459,327

Subtotal		14,860,796			13,019,639
Less Accumulated Depreciation		(3,886,864	)		(2,554,875	)

Property, Equipment and Leasehold Improvements, Net	$	10,973,932		$	10,464,764

Depreciation expense related to property, equipment and leasehold improvements for the three months ended September 30, 2017 and 2016 was $479,686 and $453,723, respectively, and for the nine months ended September 30, 2017 and 2016 was $1,399,418 and $827,391, respectively.

During the third quarter of 2017, the Company recorded an impairment charge for land held in Nevada. In accordance with the guidance for the impairment of long-lived assets, the Company evaluated the property for recovery and recorded an impairment charge of $138,037 to adjust the carrying value of the property to our estimate of fair value. The impairment charge was recorded in other expense in our unaudited consolidated statement of operations and we allocated that charge to our eliminations and other segment, see Note 15 Segment Information for additional disclosure regarding segments.