Annual report pursuant to Section 13 and 15(d)

PREPAID EXPENSES AND OTHER CURRENT ASSETS

v3.22.4
PREPAID EXPENSES AND OTHER CURRENT ASSETS
 12 Months Ended
Dec. 31, 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:
December 31,
2022 2021
Prepaid purchases $ 34,611,649  $ 24,101,695 
Less: prepaid purchases reserve (22,163,338) (23,912,025)
Prepaid purchases, net 12,448,311  189,670 
Prepaid insurance 1,198,769  2,205,608 
Right of return asset —  1,620,000 
Other 505,401  342,551 
Prepaid expenses and other current assets $ 14,152,481  $ 4,357,829 
The Company's prepaid purchases balance consists of deposits made to our suppliers for non-recurring engineering costs and production parts. As of December 31, 2022 and 2021, the prepaid purchases balances primarily consisted of deposits made in connection with the production of our W4 CC vehicles.
As of the year ended December 31, 2022 and 2021, we had reserves of $22.2 million and $23.9 million, respectively, which were primarily driven by the Company's decision to produce the C1000 vehicle platform at low-volume before discontinuing the program as the Company transitions to its new vehicle platforms. The reserve represents our best estimate of deposits on orders that we do not expect to recover.