Quarterly report pursuant to Section 13 or 15(d)

REVENUES

v3.21.2
REVENUES
9 Months Ended
Sep. 30, 2021
Revenue from Contract with Customer [Abstract]  
REVENUES

NOTE 4. REVENUES

 

Disaggregation of Revenue

 

Revenue by type was as follows:

 

                 
    Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
    2021     2020     2021     2020  
Revenue type                                
Product revenue   $ 494,011     $ 348,480     $ 1,710,579     $ 741,570  
Shipping revenue     65,359       38,381       123,040       76,249  
Subscription revenue     -       -       -       1,786  
Service income     -       1,793       36,687       1,793  
Revenue   $ 559,370     $ 388,654     $ 1,870,306     $ 821,398  

 

 

Contract Liabilities

 

The Company recognizes a contract liability when a consideration is received, or if the Company has the unconditional right to receive consideration, in advance of satisfying the performance obligation. A contract liability is the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration, or an amount of consideration is due from the customer.

 

The table below details the activity in the Company’s contract liabilities as of September 30, 2021 and December 31, 2020. The balance at the end of each period is reported as contract liability in the Company’s unaudited condensed consolidated balance sheet.

 

   

Nine Months Ended

September 30,

    Year Ended December 31,  
    2021     2020  
Balance, beginning of period   $ 24,000     $ -  
Additions     -       183,319  
Transfer to revenue     (24,000 )     (159,319 )
Balance, end of period   $ -     $ 24,000  

 

Warranty Reserve

 

The Company records a reserve for warranty repairs upon the initial delivery of vehicles to its dealer network. The Company provides a product warranty on each vehicle including powertrain, battery pack and electronics package. Such warranty matches the product warranty provided by its supply chain for warranty parts for all unaltered vehicles and is not considered a separate performance obligation. The supply chain warranty does not cover warranty-based labor needed to replace a part under warranty. Warranty reserves include management’s best estimate of the projected cost of labor to repair/replace all items under warranty. The Company reserves a percentage of all dealer-based sales to cover an industry-standard warranty fund to support dealer labor warranty repairs.

 

Such percentage is recorded as a component of cost of revenues in the statement of operations. As of September 30, 2021 and December 31, 2020, warranty reserves were recorded within accrued expenses of $69,903 and $43,278, respectively.