Quarterly report pursuant to Section 13 or 15(d)

Prepaid Expenses and Other Current Assets

v3.22.2.2
Prepaid Expenses and Other Current Assets
9 Months Ended
Sep. 30, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]  
Prepaid Expenses and Other Current Assets PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid expenses and other current assets consisted of the following:

September 30, 2022 December 31, 2021
Prepaid purchases(1)
$ 35,150,883  $ 24,101,695 
Less: prepaid purchases reserve(2)
(22,020,805) (23,912,025)
Prepaid purchases, net 13,130,078  189,670 
Prepaid insurance 1,203,158  2,205,608 
Right of return asset —  1,620,000 
Other 613,699  342,551 
Prepaid expenses and other current assets $ 14,946,935  $ 4,357,829 

(1) The Company’s prepaid purchases consists primarily of deposits made to our suppliers for non-recurring engineering costs, capital expenditures, and production parts. The increase in prepaid purchases as compared to December 31, 2021 is primarily due to deposits on supplier orders related to the Company’s W4CC and W750 vehicle platform.
(2) We record reserves on prepaid purchases that are significantly aged, for balances that represent deposits for certain production parts related to the Company’s C-Series vehicle platform, and for balances specifically identified as having a carrying value in excess of net realizable value. The reserve represents our best estimate of deposits on orders that we do not expect to recover.