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 CallDuos 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 www.duostech.com.

Regarding Forward-Looking StatementsThis 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.

Contacts:

Duos Technologies CorporateTracie HutchinsDuos Technology Group, Inc.904-652-1601 tlh@duostech.com

Investor RelationsMatt Glover or Tom ColtonLiolios949-574-3860 DUOT@liolios.com

DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS(Unaudited)

For the Three Months Ended March 31, ---------------------------- 2018 2017 ------------ ------------ REVENUES: 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 - ---------- - ---------- COST OF REVENUES: 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 - ---------- - ---------- OPERATING EXPENSES: 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 ) OTHER INCOME (EXPENSES): 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 ) - ---------- - ---------- NET LOSS APPLICABLE TO COMMON STOCK PER COMMON SHARE: Basic & Diluted $ (0.04 ) $ (1.21 ) - ---------- - ---------- WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic & Diluted 20,709,478 1,894,171 - ---------- - ----------

DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS

March 31, December 31, 2018 2017 ------------- ------------- (Unaudited) ASSETS CURRENT ASSETS: 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 OTHER ASSETS: 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 - ----------- - ----------- LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) CURRENT LIABILITIES: 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) STOCKHOLDERS' EQUITY (DEFICIT): Preferred Stock: Series B convertible cumulative preferred stock, $1,000 stated value per share, 15,000 shares authorized: 2,830 issued and 2,830,000 2,830,000 outstanding at March 31, 2018 and December 31, 2017, convertible into Duos Common stock at stated value divided by $0.50 per share 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, 20,710 20,658 2017, respectively 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 - ----------- - -----------

DUOS TECHNOLOGIES GROUP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

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 - ---------- - ----------