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Duos Technologies Reports First Quarter 2018 Results and Introduces Revenue Guidance for Full Year 2018 of $9.3 Million
[May 16, 2018]

Duos Technologies Reports First Quarter 2018 Results and Introduces Revenue Guidance for Full Year 2018 of $9.3 Million

JACKSONVILLE, Fla., May 16, 2018 (GLOBE NEWSWIRE) -- Duos Technologies Group, Inc. (the "Company" or "Duos") (OTCQB:DUOT), a provider of advanced intelligent security and analytical technology solutions, reported financial results for the first quarter ended March 31, 2018. 

First Quarter 2018 and Recent Operational Highlights

  • Awarded multi-million-dollar contract from CN, a leading North American Class-1 transportation and logistics company (NYSE:CNI), to implement new measures targeted at preventative maintenance, improved reliability, dwell reduction and overall performance
  • Awarded a roughly $2.8 million contract by one of the nation's largest retail chains to streamline and automate gatehouse operations across the corporation's national distribution centers to deliver significant operational efficiencies for a rapid return on investment
  • Appointed technology entrepreneur and veteran C-Level Executive Noel A. Heiks as President and Chief Operating Officer of its wholly owned operating subsidiary, Duos Technologies, Inc.
  • Awarded contract for a pilot program to develop inspection technology for U.S. Government Emergency Housing Program, using a first of its kind rapid deployment inspection portal that validates emergency mobile housing units manufactured for the Federal Emergency Management Agency (FEMA) and ensure that they comply with manufacturing specifications
  • Completed deployment of the pilot project for New York City Transit Authority’s track intrusion detection program
  • Continued implementation of a branch and HQ security project at a Texas bank

First Quarter 2018 Financial Results

Total revenue increased 11% to $1.1 million from $1.0 million for the same period in the prior year. The increase in total revenue was largely the result of an increase in project revenue, offset by a decrease in maintenance, technical support and IT asset management services. The revenue increase in projects is a result of an ongoing transition to new offerings, including intelligent analytics and machine learning from the Company’s traditional legacy security-centric offerings.

Gross profit increased 18% to $477,000, or 42% of total revenue, compared to $404,000, or 39% of total revenue, for the same period in the prior year. The increase in gross profit was mainly the result of the increase in project revenues and the positive effect of new projects achieving gross margins close to historical norms. The increase was partially offset by certain accounting changes related to the implementation of Accounting Standards Codification (ASC) 606.

Operating expenses were $1.2 million compared to $1.3 million for the same period in the prior year. The decrease in operating expenses was mainly due to a decrease in selling and marketing expenses, professional expenses and general and administration expenses. The decrease was offset by a less than 5% increase in salaries, wages and contract labor and research and development expenses as the Company prepares for the implementation of new projects going forward.

Net loss totaled $743,000, or $(0.04) per share, compared to a net loss of $2.3 million, or $(1.21) per share, in the first quarter of 2017. The improvement in net loss was primarily attributable to the non-cash charges incurred for 2017 in debt discount expense and warrant derivative loss on debt related to bridge financing, which has now been eliminated.

Financial Outlook

For the fiscal year ending December 31, 2018, the Company expects its total revenue to be at least $9.3 million, representing a 146% increase compared to $3.9 million reported in 2017. This guidance is based on numerous contracts in backlog that are already performing and scheduled to be executed during or before the 4th quarter of this year.  Additional awards are expected during the course of the year

Management Commentary

“2017 served as a transition year for Duos and was also a prelude to the growth we anticipate in 2018 and beyond.  We have focused on maturing our various technologies under development and are now reaching the stage where we will be able to scale exponentially within our identified target markets,” said company Chief Executive Officer Gianni Arcaini. “In addition, with our now bolstered balance sheet, we believe that Duos is in prime position, and with the necessary resources to drive substantial topline expansion both this year and beyond. With recent multi-million-dollar awards in two of our target market segments, we now not only have validation for our entries into those industries, but we have also created the foundation to achieve sustainability over the long-term. Looking ahead, we now have the visibility and confidence to provide revenue guidance for the full year of 2018 of $9.3 million, which if achieved would represent a nearly 150% increase over 2017.”

Conference Call
Duos Technologies management will host a conference call on Thursday, May 17 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss these results, followed by a question and answer period.

Date: Thursday, May 17, 2018

Time: 4:30 p.m. Eastern time (1:30 p.m. Pacific time)

U.S. dial-in: (888) 419-5570

International dial-in: +(617) 896-9871

Passcode: 23287594

Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact Liolios Group at (949) 574-3860.

About Duos Technologies Group Inc.
Duos Technologies Group, Inc. (OTCQB:DUOT), based in Jacksonville, FL, through its wholly owned subsidiary, Duos Technologies, Inc., provides advanced intelligent security and analytical technology solutions with a strong portfolio of intellectual property. Duos Technologies' core competencies include intelligent technologies that combine machine learning, artificial intelligence and advanced video analytics that are delivered through its proprietary integrated enterprise command and control platform, centraco®. The Company provides its broad range of technology solutions with an emphasis on mission critical security, inspection and operations within the rail transportation, retail, petrochemical, government, and banking sectors. Duos Technologies Group also offers professional and consulting services for large data centers. For more information, visit

Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking terminology such as "believes," "expects," "may," "will," "should," "anticipates," "plans," or similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause Duos Technologies Group, Inc. actual results to differ materially from those anticipated by the forward-looking statements. These risks and uncertainties include, but are not limited to, those described in Item 1A in Duos' Annual Report on Form 10-K, which is expressly incorporated herein by reference, and other factors as may periodically be described in Duos' filings with the SEC.


Duos Technologies Corporate
Tracie Hutchins
Duos Technology Group, Inc.

Investor Relations
Matt Glover or Tom Colton


  For the Three Months Ended 
  March 31, 
  2018  2017 
Project $844,714  $360,487 
Maintenance and technical support  257,447   315,327 
IT asset management services  45,769   359,916 
Total Revenues  1,147,930   1,035,730 
Project  547,799   346,128 
Maintenance and technical support  103,323   147,402 
IT asset management services  20,237   137,858 
Total Cost of Revenues  671,359   631,388 
GROSS PROFIT  476,571   404,342 
Selling and marketing expenses  41,221   68,747 
Salaries, wages and contract labor  765,870   735,602 
Research and development  135,280   87,617 
Professional fees  63,865   120,153 
General and administrative expenses  209,837   247,988 
Total Operating Expenses  1,216,073   1,260,107 
LOSS FROM OPERATIONS  (739,502)  (855,765)
Interest Expense  (5,728)  (921,314)
Gain on settlement of debt     64,647 
Warrant derivative gain (loss)     (582,388)
Other income, net  2,126   1 
Total Other Income (Expense)  (3,602)  (1,439,054)
NET LOSS  (743,104)  (2,294,819)
Series A preferred stock dividends     (5,920)
Net loss applicable to common stock $(743,104) $(2,300,739)
Basic & Diluted $(0.04) $(1.21)
Basic & Diluted  20,709,478   1,894,171 


  March 31,  December 31, 
  2018  2017 
Cash $66,841  $1,941,818 
Accounts receivable, net  1,414,268   298,304 
Contract Assets  608,287   423,793 
Prepaid expenses and other current assets  187,442   90,923 
Total Current Assets  2,276,838   2,754,838 
Property and equipment, net  115,761   65,362 
Software Development Costs, net  55,000    
Patents and trademarks, net  45,621   45,978 
Total Other Assets  100,621   45,978 
TOTAL ASSETS $2,493,220  $2,866,178 
Accounts payable $790,182  $812,618 
Accounts payable - related parties  12,598   12,598 
Notes payable - financing agreements  124,770   49,657 
Notes payable - related parties     9,078 
Line of credit  34,212   34,513 
Payroll taxes payable  158,056   149,448 
Accrued expenses  353,731   497,277 
Contract Liabilities  722,582   200,410 
Deferred revenue  343,950   438,907 
Total Current Liabilities  2,540,081   2,204,506 
Notes payable - related party     39,137 
Notes payable, net of discounts      
Total Liabilities  2,540,081   2,243,643 
Commitments and Contingencies (Note 6)        
Preferred Stock:  Series B convertible cumulative preferred stock, $1,000 stated value per share, 15,000 shares authorized: 2,830 issued and outstanding at March 31, 2018 and December 31, 2017, convertible into Duos Common stock at stated value divided by $0.50 per share  2,830,000   2,830,000 
Common stock:  $0.001 par value; 500,000,000 shares authorized 20,710,059 and 20,657,850 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively  20,710   20,658 
Additional paid-in capital  26,682,479   26,608,823 
Total stock & paid-in-capital  26,703,189   26,629,481 
Accumulated deficit  (29,432,050)  (28,688,946)
Sub-total  (2,728,861)  (2,059,465)
Less:  Treasury stock (3,280 shares of common stock)  (148,000)  (148,000)
Total Stockholders' Equity (Deficit)  (46,861)  622,535 
Total Liabilities and Stockholders' Equity (Deficit) $2,493,220  $2,866,178 


  For the Three Months Ended 
  March 31, 
  2018  2017 
Cash from operating activities:      
Net loss $(743,104) $(2,294,819)
Adjustments to reconcile net loss to net cash used in operating activities:        
Depreciation and amortization  19,071   12,191 
Gain on settlement of debt     (64,647)
Stock and warrants issued for services     15,000 
Amortization of debt discounts     844,988 
Warrant derivative loss     582,388 
Changes in assets and liabilities:        
Accounts receivable  (1,115,965)  (267,885)
Contract assets  (184,494)  329,034 
Prepaid expenses and other current assets  53,029   61,968 
Accounts payable  (22,436)  53,253 
Accounts payable-related party     1,408 
Payroll taxes payable  8,608   259,056 
Accrued expenses  (69,837)  52,233 
Contract liabilities  522,172   1,503 
Deferred revenue  (94,957)  (261,197)
Net cash used in operating activities  (1,627,913)  (675,526)
Cash flows from investing activities:        
Purchase of software  (60,000)   
Purchase of patents/trademarks  (1,000)   
Purchase of fixed assets  (63,113)  (16,266)
Net cash used in investing activities  (124,113)  (16,266)
Cash flows from financing activities:        
Proceeds from related party notes     (13,612)
Repayments of line of credit  (301)   
Repayments of related party notes  (48,215)   
Repayments of insurance and equipment financing  (74,435)  (26,287)
Repayments of notes payable     (172,500)
Proceeds of notes payable, net of $117,000 cash fees     783,000 
Net cash (used) provided by financing activities  (122,951)  570,601 
Net decrease in cash  (1,874,977)  (121,191)
Cash, beginning of period  1,941,818   174,376 
Cash, end of period  66,841   53,185 
Supplemental Disclosure of Cash Flow Information:        
Interest paid $3,519  $45,334 
Supplemental Non-Cash Investing and Financing Activities:        
Common stock issues for accrued BOD fees $73,709    
Accrued interest forgiven related to note payable settlement $  $20,697 
Debt discount related to notes payable $  $992,369 
Note issued for financing of insurance premiums $  $1,276,520 


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