Deer Valley Corp
The Company, through its wholly owned subsidiaries DVH and DVHRS, design and
manufacture factory built homes which are marketed in 14 states through a network
of independent dealers, builders, developers and government agencies located
primarily in the southeastern and south central regions of the United States.
Our financial subsidiary, DVFC, provides dealer inventory-secured financing
for our factory built homes to qualified retail dealers and developers.
We produce all of our factory-built homes at our plant in Guin, Alabama.
The Company manufacturers homes that are designed as primary residences ready
for immediate occupancy. Most of our homes are customized at the Company’s
factory to the home buyers’ specifications. The Company has concentrated
on the medium to higher priced segments of the manufactured housing market.
While our homes are constructed with many of the same components and building
materials used in site-built homes, we utilize a cost-efficient assembly line
manufacturing process which enables us to produce a quality home at a significantly
lower cost per square foot than a traditional, site-built home. Lower costs
are achieved through bulk quantity purchase of building materials, production
workforce is trained and managed more efficiently and effectively than the system
of contract labor typical in the construction industry. The indoor building
process allows work crews to avoid delays caused by outside factors, such as
inclement weather, vandalism and theft that are common at traditional home sites.
The principal raw materials used in the production of our homes include wood,
wood products, panels, steel, sheetrock, vinyl siding, gypsum wallboard, fiberglass
insulation, carpet, appliances, electrical items, windows, roofing materials,
electrical supplies, roof trusses, and plumbing fixtures. We believe that the
raw materials used in the production of our factory-built homes are readily
available from a wide variety of suppliers and that the loss of any single supplier
would not have a material adverse effect on our business.
Because the cost of transporting a factory-built home is significant, substantially
all of our homes are sold to dealers within a 500 mile radius of our manufacturing
facility. DVH arranges, at dealers’ expense, for the transportation of
finished homes to dealer locations using independent trucking companies. Customary
sales terms are cash-on-delivery or guaranteed payment from an inventory-secured
financing source. Dealers or other independent installers are responsible for
placing the home on site and connecting utilities.
The Company offers inventory-secured financing for its products to a limited
number of qualified retail dealers and developers. Products shipped to dealers
under the Company’s inventory-secured financing program are recorded by
the Company as sales and the dealers’ obligations to the Company are reflected
as inventory finance notes receivable.
Finance contracts typically require periodic installments of principal and interest
over periods of up to twenty-four months. These notes are secured by a first
priority secured interest in the inventory collateral and other security depending
on borrower circumstances. Dealers who sell products utilizing inventory-secured
financing are required to make immediate payment for those products to the Company
upon sale to the retail customer.
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