Annual report pursuant to Section 13 and 15(d)

Revenues

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Revenues
12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Revenues

NOTE 3. REVENUES

 

Disaggregation of Revenue

 

Revenue by type consists of the following:

 

    Years Ended December 31,  
    2020     2019  
Revenue type                
Product revenue   $ 1,506,055     $ 787,386  
Shipping revenue     94,099       83,717  
Subscription revenue     1,786       11,883  
Service income     2,129       7,166  
    $ 1,604,069     $ 890,152  

 

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 December 31, 2020 and 2019. The balance at the end of each period is reported as contract liability in the Company’s consolidated balance sheet.

 

    As of December 31,  
    2020     2019  
Balance, beginning of year   $ -     $ 9,999  
Additions     183,319       -  
Transfer to revenue     (159,319 )     (9,999 )
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 December 31, 2020 and 2019, warranty reserves were recorded within accrued expenses of $43,278 and $27,375, respectively.