Item 2. Properties
ITEM 2. PROPERTIES
Commencing January 2021, NeoVolta
moved into a new dedicated headquarters and manufacturing facility in Poway, California, just north of San Diego. This state-of-the-art,
energy-efficient facility has ample square footage, shipping and receiving space, and office spaces to support the company’s growth
by providing double the production capability and increases shipping efficiency from that of our previous facility. We believe this facility
will accommodate our growth for at least three years. The facility was secured under a sublease agreement with our contract manufacturer.
Under the terms of the sublease agreement, we are required to make rental payments of $10,350 per month during the initial one-year term
of the agreement. The sublease agreement is renewable upon mutual agreement of both parties for up to four additional years at a modest
increase in the monthly rent, however, we are under no obligation to renew it.
All of NeoVolta’s products
are manufactured in-house at our Poway, CA facility. We manufacture our products in an efficient build-to-order model, keeping very little
finished-goods inventory. We sublease and share our facility with our contract manufacturer, ConnectPV, creating a seamless transition
from sub-components to finished goods that are ready for shipping in a short amount of time.
We issue build orders to ConnectPV,
they pull raw materials from the warehouse, assemble the final units and prepare them for shipment or pick-up. Our timeline from order
to delivery is usually less than two-weeks.
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The end-product is then picked
up or shipped from our docks, signed off by our installer and logged into our system when installed for system monitoring.
We run multiple quality checks
throughout the process and have systems to track components and end-units from Asia to San Diego to the end-user’s location. Our
manufacturing partner records all component serial numbers, all torque settings, and annotates all required item numbers and functionality
prior to packaging.
We do not own any real property.
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