Duos Technologies Group, Inc. (“Duos” or the
“Company”) (Nasdaq: DUOT), a provider of machine vision and
artificial intelligence that analyzes fast moving vehicles,
reported financial results for the first quarter (“Q1 2023”) ended
March 31, 2023.
First Quarter 2023 and Recent
Operational Highlights
- Announced an add-on award of $1.9
million for the enhancement of a planned Railcar Inspection Portal
(“rip®” or “RIP®”) system in the passenger transportation sector,
pushing the total contract value to more than $13.5 million. This
latest addition is part of a long-term installation of the
Company's most advanced RIP system, which will capture high-speed
images of railcars at up to 125 miles per hour.
- Performed over 1.7 million
comprehensive railcar scans in the first quarter across 11 portals,
of which more than 238,000 were unique railcars. This metric
encompasses all railcars scanned at locations across the U.S.,
Canada, and Mexico, representing approximately 15% of the total
freight car population in North America.
- Released eight new AI detection
models for use within the Company’s RIP solution since the
beginning of the year. The Company currently has 37 models deployed
and operational for freight and transit customers with plans to
deploy more than 50 different models by the end of 2023.
- Signed strategic partnership with a
regional railroad to identify and deploy RIPs to monitor their
railcar fleet.
- Filed two additional patent
applications related to the process and method for detecting
defects on moving trains and inspecting aircraft during ground
operations.
- Provided input to the Rail Safety
Act of 2023 on technology for wayside detection. This Bill recently
made it through the U.S. Senate Committee on Commerce, Science, and
Transportation. It is expected to be voted upon in the full
Senate.
- As of the end of the first quarter,
the Company had $9.4 million of revenue in backlog and expects $7.7
million to be recognized during the remainder 2023.
First Quarter 2023 Financial
ResultsIt should be noted that the following Financial
Results represent the consolidation of the Company with its
subsidiary Duos Technologies, Inc.
Total revenues for Q1 2023
increased 84% to $2.64 million compared to $1.44 million in the
first quarter of 2022 (“Q1 2022”). Total revenue for Q1 2023
represents an aggregate of approximately $1.82 million of
technology systems revenue and approximately $816,000 in recurring
services and consulting revenue. The increase in revenues was
driven by the manufacturing of two high-speed, bespoke RIPs for a
transit customer and the successful delivery of AI detection models
for a number of freight rail customers.
Cost of revenues for Q1 2023
increased 73% to $2.11 million compared to $1.22 million for Q1
2022. The increase in cost of revenues was driven by a similar
increase in technology systems revenue primarily stemming from the
manufacturing of two high-speed passenger RIPs.
Gross margin for Q1 2023
increased 142% to $537,000 compared to $222,000 for Q1 2022. The
improvement in gross margin was driven by higher revenues related
to two high-speed passenger RIPs coupled with additional algorithms
deployed during the first quarter of 2023.
Operating expenses for Q1 2023
decreased 6% to $2.68 million compared to $2.86 million for Q1
2022. There was an increase in sales and marketing costs related to
additional investment in staff. This was offset by a decrease in
general and administrative costs primarily due to a year-over-year
reduction in non-cash employee compensation charges.
Net operating loss for Q1 2023
totaled $2.14 million compared to net operating loss of $2.64
million for Q1 2022. The decrease in net operating loss was driven
by the improved margins noted in the recurring services as well as
project revenues as it progresses toward manufacturing and
subsequent installation activities.
Net loss for Q1 2023 totaled
$2.14 million compared to net loss of $2.64 million for Q1 2022.
The improvement in net loss was driven by higher margins stemming
from RIP projects and increased services and consulting revenues
with minimal change in operating expenses.
Cash and cash equivalents at
March 31, 2023 totaled $4.34 million compared to $1.12 million at
December 31, 2022. As of quarter end, the Company had an additional
$717,000 in receivables, bolstering its liquidity position to
approximately $5.06 million. Duos also had an additional $1.53
million in inventory as of March 31, 2023, consisting primarily of
long-lead items for future RIP installations.
In March 2023, the Company entered into a
securities purchase agreement with certain existing investors
resulting in the issuance of an aggregate of 4,000 shares of a
newly authorized Series E Convertible Preferred Stock which is
convertible common stock at an equivalent of $3.00 per share. Duos
received aggregate proceeds of $4.00 million through the
transaction.
Financial Outlook At the end of
the first quarter, the Company’s contracts in backlog represented
approximately $9.4 million in revenue, of which approximately $7.7
million is expected to be recognized during the remainder of 2023.
The balance of contract backlog is comprised of multi-year service
and software agreements as well as project revenues spanning into
fiscal 2024.
Based on these committed contracts and near-term
pending orders that are already performing or scheduled to be
executed throughout the course of 2023 as well as the planned
expansion of the Company’s subscription business model and other
contributing factors, Duos is reiterating its previously stated
revenue expectations for the fiscal year ending December 31, 2023.
The Company expects total revenue for 2023 to range between $20.0
million and $21.0 million, representing an increase of 33% to 40%
compared to 2022.
Duos expects its improvement in operating
results to be reflected over the course of the full year in 2023.
As a result of timing and other factors, the Company expects
revenues in the second quarter of 2023 to be in-line with the first
quarter of 2023 before ramping more significantly in the latter
half of the year.
Management Commentary“We began
the year building on the significant momentum we’ve generated over
the last several quarters, which has us on track to deliver on our
financial and operational goals for 2023,” said Duos Chief
Executive Officer Chuck Ferry. “Over the last twelve months, we’ve
generated approximately $16.2 million in revenues, underscoring our
ability to deliver long-term performance over a sustained period
and outside of quarterly fluctuations. Growth has come from a
diversified pool of new customer contracts, add-on sales to
existing agreements, and an increasing stream of recurring revenues
as we expand our customer base as well as the breadth of our AI
offerings. By the end of this year, we expect to have more than 50
commercialized AI use cases covering a wide range of railcar
inspection points for both freight and passenger railcars.
“We have also remained in active discussions
with many congressional leaders, regulators, rail operators, and
other major stakeholders in providing support for potential new
legislation, which is continuing to advance through the Congress.
While our operational roadmap is not reliant on this bill, we have
seen increased levels of interest from a wide range of railcar
operators and owners who are looking to accelerate their technology
investments to improve safety standards. Looking ahead, we are
making encouraging progress in building out our new subscription
offering, which is still planned to come online later this year.
With our backlog at $9.4 million, we believe we have strong
visibility into expected performance over the coming quarters as
well as further confidence in our long-term growth outlook.”
Conference CallThe Company’s
management will host a conference call today, May 15, 2023, 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: Monday, May 15, 2023Time: 4:30 p.m. Eastern time (1:30
p.m. Pacific time)U.S. dial-in: 877-407-3088International dial-in:
201-389-0927Confirmation: 13738333
Please call the conference telephone number 5-10
minutes prior to the start time of the conference call. An operator
will register your name and organization.
If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at
949-574-3860.
The conference call will be broadcast live via
telephone and available for online replay via the investor section
of the Company's website here.
About Duos Technologies Group,
Inc.Duos Technologies Group, Inc. (Nasdaq: DUOT), based in
Jacksonville, Florida, through its wholly owned subsidiary, Duos
Technologies, Inc., designs, develops, deploys and operates
intelligent vision based technology solutions supporting rail,
logistics, intermodal and government customers that streamline
operations, improve safety and reduce costs. The Company provides
cutting edge solutions that automate the mechanical and security
inspection of fast-moving trains, trucks and automobiles through a
broad range of proprietary hardware, software, information
technology and artificial intelligence. For more information, visit
www.duostech.com.
Forward- Looking StatementsThis
news release includes forward-looking statements regarding the
Company's financial results and estimates and business prospects
that involve substantial risks and uncertainties that could cause
actual results to differ materially. Forward-looking statements
relate to future events and typically address the Company's
expected future business and financial performance. The
forward-looking statements in this news release relate to, among
other things, information regarding anticipated timing for the
installation, development and delivery dates of our systems;
anticipated entry into additional contracts; anticipated effects of
macro-economic factors (including effects relating to supply chain
disruptions and inflation); timing with respect to revenue
recognition; trends in the rate at which our costs increase
relative to increases in our revenue; anticipated reductions in
costs due to changes in the Company's organizational structure;
potential increases in revenue, including increases in recurring
revenue; potential changes in gross margin (including the timing
thereof); statements regarding our backlog and potential revenues
deriving therefrom; and statements about future profitability and
potential growth of the Company. Words such as "believe," "expect,"
"anticipate," "should," "plan," "aim," "will," "may," "should,"
"could," "intend," "estimate," "project," "forecast," "target,"
"potential" and other words and terms of similar meaning, typically
identify such forward-looking statements. Forward-looking
statements involve risks and uncertainties and there are important
factors that could cause actual results to differ materially from
those expressed or implied by these forward-looking statements.
These factors include, but are not limited to, the Company's
ability to continue as a going concern, the Company's ability to
generate sufficient cash to continue and expand operations, the
competitive environment generally and in the Company's specific
market areas, changes in technology, the availability of and the
terms of financing, changes in costs and availability of goods and
services, economic conditions in general and in the Company's
specific market areas, changes in federal, state and/or local
government laws and regulations potentially affecting the use of
the Company's technology, changes in operating strategy or
development plans and the ability to attract and retain qualified
personnel. The Company cautions that the foregoing list of risks,
uncertainties and factors is not exclusive. Additional information
concerning these and other risk factors is contained in the
Company's most recently filed Annual Reports on Form 10-K,
subsequent Quarterly Reports on Form 10-Q, recent Current Reports
on Form 8-K, and other filings filed by the Company with the U.S.
Securities and Exchange Commission (the "SEC"), which are available
at the SEC's website, http://www.sec.gov. The Company believes its
plans, intentions and expectations reflected in or suggested by
these forward-looking statements are based on reasonable
assumptions. No assurance, however, can be given that the Company
will achieve or realize these plans, intentions or expectations.
Indeed, it is likely that some of the Company's assumptions may
prove to be incorrect. The Company's actual results and financial
position may vary from those projected or implied in the
forward-looking statements and the variances may be material. Each
forward-looking statement speaks only as of the date of the
particular statement. We do not undertake or accept any obligation
or undertaking to release publicly any updates or revisions to any
forward-looking statements to reflect any change in our
expectations or any change in events, conditions or circumstances
on which any forward-looking statement is based, except as required
by law. All subsequent written and oral forward-looking statements
concerning the Company or other matters attributable to the Company
or any person acting on its behalf are expressly qualified in their
entirety by the cautionary statements above.
DUOS TECHNOLOGIES GROUP, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF OPERATIONS |
(Unaudited) |
|
|
|
|
|
|
|
For the Three Months Ended |
|
|
|
March 31 |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
REVENUES: |
|
|
|
|
Technology systems |
|
$ |
1,827,764 |
|
|
$ |
783,269 |
|
Services and consulting |
|
|
816,524 |
|
|
|
656,047 |
|
|
|
|
|
|
|
Total Revenues |
|
|
2,644,288 |
|
|
|
1,439,316 |
|
|
|
|
|
|
|
COST OF REVENUES: |
|
|
|
|
Technology systems |
|
|
1,767,209 |
|
|
|
865,487 |
|
Services and consulting |
|
|
339,907 |
|
|
|
351,762 |
|
|
|
|
|
|
|
Total Cost of Revenues |
|
|
2,107,116 |
|
|
|
1,217,250 |
|
|
|
|
|
|
|
GROSS MARGIN |
|
|
537,172 |
|
|
|
222,066 |
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
Sales and marketing |
|
|
307,577 |
|
|
|
283,894 |
|
Research and development |
|
|
404,885 |
|
|
|
436,717 |
|
General and Administration |
|
|
1,971,508 |
|
|
|
2,143,073 |
|
|
|
|
|
|
|
Total Operating Expenses |
|
|
2,683,970 |
|
|
|
2,863,684 |
|
|
|
|
|
|
|
LOSS FROM OPERATIONS |
|
|
(2,146,798 |
) |
|
|
(2,641,618 |
) |
|
|
|
|
|
|
OTHER INCOME (EXPENSES): |
|
|
|
|
Interest expense |
|
|
(1,180 |
) |
|
|
(3,180 |
) |
Other income, net |
|
|
4,295 |
|
|
|
182 |
|
|
|
|
|
|
|
Total Other Income (Expenses) |
|
|
3,115 |
|
|
|
(2,998 |
) |
|
|
|
|
|
|
NET LOSS |
|
|
$ |
(2,143,683 |
) |
|
$ |
(2,644,616 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Net Loss Per Share |
|
$ |
(0.30 |
) |
|
$ |
(0.49 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Shares-Basic and Diluted |
|
|
7,156,876 |
|
|
|
5,353,620 |
|
|
|
|
|
|
|
DUOS TECHNOLOGIES GROUP, INC. AND
SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31 |
|
December 31 |
|
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash |
|
|
$ |
4,340,947 |
|
|
$ |
1,121,092 |
|
|
Accounts receivable, net |
|
717,345 |
|
|
|
3,418,263 |
|
|
Contract assets |
|
|
1,426,312 |
|
|
|
425,722 |
|
|
Inventory |
|
|
1,529,530 |
|
|
|
1,428,360 |
|
|
Prepaid expenses and other current assets |
|
532,381 |
|
|
|
441,320 |
|
|
|
|
|
|
|
|
|
|
Total Current Assets |
|
8,546,516 |
|
|
|
6,834,757 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
579,689 |
|
|
|
629,490 |
|
|
Operating lease right of use asset |
|
4,612,830 |
|
|
|
4,689,931 |
|
|
Security deposit |
|
|
600,000 |
|
|
|
600,000 |
|
|
|
|
|
|
|
|
|
OTHER ASSETS: |
|
|
|
|
|
Patents and trademarks, net |
|
75,017 |
|
|
|
69,733 |
|
|
Software development costs, net |
|
454,280 |
|
|
|
265,208 |
|
|
Total Other Assets |
|
|
529,297 |
|
|
|
334,941 |
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
14,868,332 |
|
|
$ |
13,089,119 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
Accounts payable |
|
$ |
1,282,184 |
|
|
$ |
2,290,390 |
|
|
Notes payable - financing agreements |
|
193,094 |
|
|
|
74,575 |
|
|
Accrued expenses |
|
|
367,652 |
|
|
|
453,023 |
|
|
Equipment financing payable-current portion |
|
11,566 |
|
|
|
22,851 |
|
|
Operating lease obligations-current portion |
|
764,820 |
|
|
|
696,869 |
|
|
Contract liabilities |
|
|
2,066,861 |
|
|
|
957,997 |
|
|
|
|
|
|
|
|
|
|
Total Current Liabilities |
|
4,686,177 |
|
|
|
4,495,705 |
|
|
|
|
|
|
|
|
|
|
Equipment financing payable, less current portion |
|
- |
|
|
|
- |
|
|
Operating lease obligations, less current portion |
|
4,466,884 |
|
|
|
4,542,943 |
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
9,153,061 |
|
|
|
9,038,648 |
|
|
|
|
|
|
|
|
|
Commitments and Contingencies (Note 4) |
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS' EQUITY: |
|
|
|
|
Preferred stock: $0.001 par value, 10,000,000 shares authorized,
9,476,000 shares available to be designated |
|
|
|
Series A redeemable convertible preferred stock, $10 stated value
per share, |
|
|
|
|
500,000 shares designated; 0 issued and outstanding at March 31,
2023 and December 31, 2022, respectively, |
|
|
|
convertible into common stock at $6.30 per share |
|
|
|
|
Series B convertible preferred stock, $1,000 stated value per
share, |
|
|
|
|
15,000 shares designated; 0 and 0 issued and outstanding at March
31, 2023 |
|
|
|
|
and December 31, 2022, respectively, convertible into common stock
at $7 per share |
|
|
|
|
Series C convertible preferred stock, $1,000 stated value per
share, |
|
|
|
|
5,000 shares designated; 0 and 0 issued |
|
|
|
|
and outstanding at March 31, 2023 and December 31, 2022,
respectively, |
|
|
|
|
convertible into common stock at $5.50 per share |
|
|
|
|
Series D convertible preferred stock $0.001 par value, $1,000
stated value per share, |
|
1 |
|
|
|
1 |
|
|
4,000 shares designated; 1,299 and 1,299 issued |
|
|
|
|
and outstanding at March 31, 2023 and December 31, 2022,
respectively, |
|
|
|
|
convertible into common stock at $3 per share |
|
|
|
|
Series E convertible preferred stock, $1,000 stated value per share
$1,000 stated value, |
|
|
|
|
30,000 shares designated; 4,000 and 0 issued |
|
|
|
|
and outstanding at March 31, 2023 and December 31, 2022,
respectively, |
|
4 |
|
|
|
- |
|
|
convertible into common stock at $3 per share |
|
|
|
|
Common stock: $0.001 par value; 500,000,000 shares authorized, |
|
|
|
|
7,169,339 and 7,156,876 shares issued, 7,168,015 and 7,155,552 |
|
7,168 |
|
|
|
7,156 |
|
|
shares outstanding at March 31, 2023 and December 31, 2022,
respectively |
|
|
|
|
Additional paid-in-capital |
|
60,371,067 |
|
|
|
56,562,600 |
|
|
Total stock & paid-in-capital |
|
60,378,240 |
|
|
|
56,569,757 |
|
|
Accumulated deficit |
|
(54,505,517 |
) |
|
|
(52,361,834 |
) |
|
Sub-total |
|
|
5,872,723 |
|
|
|
4,207,923 |
|
|
Less: Treasury stock (1,324 shares of common stock |
|
|
|
|
at September 30, 2022 and December 31, 2021) |
|
(157,452 |
) |
|
|
(157,452 |
) |
Total Stockholders' Equity |
|
5,715,271 |
|
|
|
4,050,471 |
|
|
|
|
|
|
|
|
|
Total Liabilities and Stockholders' Equity |
$ |
14,868,332 |
|
|
$ |
13,089,119 |
|
|
|
|
|
|
|
|
|
DUOS TECHNOLOGIES GROUP, INC. AND
SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited) |
|
For the Three Months Ended |
|
March 31 |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
Cash from operating activities: |
|
|
|
Net loss |
$ |
(2,143,683 |
) |
|
$ |
(2,644,616 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
Depreciation and amortization |
|
116,588 |
|
|
|
73,628 |
|
Stock based compensation |
|
75,128 |
|
|
|
250,577 |
|
Stock issued for services |
|
32,500 |
|
|
|
40,000 |
|
Capital of operating lease right of use asset |
|
77,101 |
|
|
|
77,636 |
|
Changes in assets and liabilities: |
|
|
|
Accounts receivable |
|
2,700,917 |
|
|
|
1,449,908 |
|
Contract assets |
|
(1,000,590 |
) |
|
|
(264,223 |
) |
Inventory |
|
(101,167 |
) |
|
|
(24,426 |
) |
Prepaid expenses and other current assets |
|
228,941 |
|
|
|
(264,687 |
) |
Accounts payable |
|
(1,008,207 |
) |
|
|
(95,708 |
) |
Accrued expenses |
|
(85,371 |
) |
|
|
(30,622 |
) |
Operating lease obligation |
|
(8,108 |
) |
|
|
70,094 |
|
Contract liabilities |
|
1,108,864 |
|
|
|
534,706 |
|
|
|
|
|
Net cash used in operating activities |
|
(7,086 |
) |
|
|
(827,733 |
) |
|
|
|
|
Cash flows from investing activities: |
|
|
|
Purchase of patents/trademarks |
|
(7,339 |
) |
|
|
(600 |
) |
Purchase of software development |
|
(212,067 |
) |
|
|
- |
|
Purchase of fixed assets |
|
(41,738 |
) |
|
|
(101,478 |
) |
|
|
|
|
Net cash used in investing activities |
|
(261,144 |
) |
|
|
(102,078 |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
Repayments of insurance and equipment financing |
|
(201,485 |
) |
|
|
(128,437 |
) |
Repayment of finance lease |
|
(11,285 |
) |
|
|
(23,959 |
) |
Proceeds from common stock issued |
|
- |
|
|
|
6,095,000 |
|
Issuance cost |
|
(299,145 |
) |
|
|
(576,650 |
) |
Proceeds from preferred stock issued |
|
4,000,000 |
|
|
|
- |
|
|
|
|
|
Net cash provided by financing activities |
|
3,488,085 |
|
|
|
5,365,954 |
|
|
|
|
|
Net increase (decrease) in cash |
|
3,219,855 |
|
|
|
4,436,143 |
|
Cash, beginning of period |
|
1,121,092 |
|
|
|
893,720 |
|
Cash, end of period |
$ |
4,340,947 |
|
|
$ |
5,329,863 |
|
|
|
|
|
Supplemental Disclosure of Cash Flow
Information: |
|
|
|
Interest paid |
$ |
1,180 |
|
|
$ |
3,180 |
|
Taxes paid |
$ |
- |
|
|
$ |
- |
|
|
|
|
|
Supplemental Non-Cash Investing and Financing
Activities: |
|
|
|
Notes issued for financing of insurance premiums |
$ |
320,004 |
|
|
$ |
242,591 |
|
|
|
|
|
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/5aae4ae6-f020-4046-a4c5-9367e165e3ea
Contacts
Corporate
Fei Kwong, Director, Corporate Communications
Duos Technologies Group, Inc. (Nasdaq: DUOT)
904-652-1625
fk@duostech.com
Investor Relations
Matt Glover or Tom Colton
Gateway Investor Relations
949-574-3860
DUOT@gatewayIR.com
Duos Technologies (NASDAQ:DUOT)
과거 데이터 주식 차트
부터 4월(4) 2024 으로 5월(5) 2024
Duos Technologies (NASDAQ:DUOT)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024