DUOS TECHNOLOGIES GROUP, INC. (DUOT) SPO
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|Company Name||DUOS TECHNOLOGIES GROUP, INC.|
|Company Address||6622 SOUTHPOINT DRIVE S
JACKSONVILLE, FL 32216
|CEO||Gianni B. Arcaini|
|Employees (as of 7/14/2017)||38|
|State of Inc||FL|
|Fiscal Year End||12/31|
|Shares Over Alloted||329,340|
|Shareholder Shares Offered||--|
|Lockup Period (days)||180|
|Quiet Period Expiration||--|
We estimate that the net proceeds from the sale of the common stock and warrants in the offering will be approximately $9,800,000, based on an assumed public offering price of $5.00 per share of common stock (the mid-point of the estimated offering price range described on the cover page of this prospectus) and warrants at a price of $0.01 per warrant exercisable at $_____ per share (125% of the public offering price of one share of common stock based on an assumed initial offering price of $5.00 per share, the mid-point of the estimated offering price range described on the cover page of this prospectus) after deducting the underwriting discounts and commissions and estimated offering expenses, or $11,500,000 if the underwriters exercise their over-allotment option in full. We currently expect to use the net proceeds of this offering primarily for the following purposes: · $1,842,105 to pay off in full the debt held by JMJ Financial under the terms of the Note. As disclosed under Recent Developments herein, the funding provided to the Company by JMJ Financial was in the amount of $1,750,000, is interest free and was loaned to the Company with an original issue discount of 5%; · approximately $2,900,000 for research and development for new products and improvements to existing products including, but not limited to, hiring of key personnel, and material costs for research activities; · approximately $1,400,000 to upgrade sales and marketing capabilities, including but not limited to professional relations, advertising, software implementation and adding additional staff; and · the remainder for capital expenditures, working capital and other general corporate purposes, and possibly acquisitions of other companies, products or technologies, though no such acquisitions are currently contemplated. We believe that the expected net proceeds from this offering and our existing cash and cash equivalents, together with interest thereon, will be sufficient to fund our operations for at least the next 12 months, although we cannot assure you that this will occur. The amount and timing of our actual expenditures will depend on numerous factors, including the status of our development efforts, sales and marketing activities and the amount of cash generated or used by our operations. We may find it necessary or advisable to use portions of the proceeds for other purposes, and we will have broad discretion and flexibility in the application of the net proceeds. Pending these uses, the proceeds will be invested in short-term bank deposits.
Since inception, we have implemented a strategy of diversification to mitigate the potential vulnerabilities experienced by companies with a narrow business scope. We believe many public companies in the micro- and nano-cap ecosystem suffer major challenges due to their lack of diversification, and their single product strategy has made many of these companies irrelevant in the market place. During the past several years, we have made considerable investments in, and have successfully developed, our two core technology platforms, praesidium® and centraco®. praesidium® is an open architecture, modular engine that manages an unlimited number of “back end” process and analytics frameworks. In addition to driving our own proprietary sensor and data analytics, this core technology also allows for the integration of an unlimited number of third-party technologies, systems and sub-systems. Third-party industry or task-specific processes are modularized and embedded into the praesidium® engine, thereby substantially expanding the functionality of such third-party system. While we believe most companies tailor their products and services to a specific industry, this core platform is “industry agnostic” which we believe will allow us to penetrate multiple industries. Our past and current concentration on specific target markets such as rail, retail, healthcare, utilities, chemical, gas and oil, and government has enabled us to test the markets with our innovative technology solutions. Our praesidium® platform competes currently with the following sector specific companies: Intelligent Video Analytics Rail Inspection Portal Security Mechanical Security Agent Video Intelligence Trimble Inc. (Acquired No direct competition at Ltd. Agent VI (Israel) Beena Vision Systems this time (1) Inc.) Robert Bosch GmbH, Germany Lynx Engineering Beena Vision (development Consultants Pty Ltd stage, just entering the (LYNXRAIL) - Australia market place) SightLogix, Inc. (Tracks, wheels and wayside only) IntelliVision Technologies Corp (USA) Avigilon Corporation (Video KLD Labs Inc. IQ) (Tracks, wheels and wayside only) MERMEC S.p.A - Italy Tracks, wheels and wayside only) (1) We believe we are the first to develop the concept of an intelligent rail inspection portal used for comprehensive inspection of security threats and at this time we are unaware of any competitor in this sector. Recently, the AAR, through its technology research subsidiary TTCI, has engaged us to adapt our security portal technology to an automated mechanical inspection system. We are currently in stage 2 of 3 of this development. We believe our potential competitors in this area are currently focusing chiefly on the inspection of wheels, bearings, breaks and track alignment. We expect that any competitor interested in expanding their inspection technologies to the ones we have developed over the past four years would require at least 2-3 years of research and development before being able to produce similar systems for real time testing. We believe the testing cycle will take at least an additional 1-2 years for potential competition. The AAR/TTCI is currently conducting beta testing only with our systems. Similarly, the CBP (US Customs and Border Protection) and Union Pacific Railroad are using our systems as their only security inspection infrastructure at the US border. centraco® is an open architecture aggregator and “fusion” engine which functions as a comprehensive “front end” user interface. This framework combines our proprietary modules with an unlimited number of 3d-party technologies. In addition to a wide range of proprietary embedded features, such as video management (VMS), alarm management (AMS), LDAP network access credentialing and many more, centraco® intelligently manages unlimited types of data sources and allows control and monitoring of this wide array of sensors and data from a single unified interface. This platform includes both the traditional Physical Security Information Management (PSIM) systems as well as a full-scale Enterprise Information Management System (EIMS). We believe we are at an advantage because none of our competitors’ product offerings include both PSIM and EIMS, nor do any of the competing products allow for the integration of embedded engineered solutions. Our competitors in this area include: PSIM · · Qognify (Formerly NICE) CNL · · VidSys Proximex · · IDV/Everbridge Axxon We believe the PSIM market is rapidly expanding and we expect that capability requirements will substantially increase. Companies increasingly require expanded capabilities to justify the investment in their digital infrastructure for use by multiple corporate disciplines (security, building management, IT, network access control management).
The Company, through its wholly owned subsidiary DTI, focuses on the design, development and turnkey delivery of proprietary “intelligent technologies” that enable our customers to derive measurable increases in return on investment for their business. Our technologies integrate with our customer’s
existing business process and create actionable information to streamline mission critical operations. Our target market is the largest transportation, industrial and retail corporations representing over $100 billion in total available market. Our technologies have been verified by multiple government and private organizations including Johns Hopkins University Applied Physics Laboratory (JHU/APL), the Department of Homeland Security (DHS), and the Transportation Technology Center, Inc., a wholly owned subsidiary of the Association of American Railroads, and a transportation research and testing organization (TTCI). The Company has worked with these organizations over the past several years where we have supplied funded prototypes of our technologies to verify technology and operating parameters. The Company provides a broad range of sophisticated intelligent technology solutions with an emphasis on security, inspection and operations for critical infrastructure within a variety of industries including transportation, healthcare, retail, law enforcement, oil and gas and utilities sectors. Our business operations are in two business units: intelligent technologies and IT asset management. Our proprietary applications, specific to critical infrastructure, include but are not limited to: Intelligent Rail Inspection Portal . A suite of several sub-systems for the automated inspection of freight or transit railcars while in motion. The objective is to automatically detect a variety of anomalies such as open or missing hatches, open cargo doors, illegal riders hiding in cargo wells, and foreign objects hidden under a car undercarriage, all while the train is traveling through various strategic areas (i.e. border crossings or inspection areas). Tunnel and Bridge Security . A suite of artificial intelligence-based homeland security applications for the security of critical tunnels and bridges. Virtual Security Shield . A suite of artificial intelligence-based homeland security applications for the security of critical areas and buffer zones. This application includes intrusion detection zone, Radio Frequency Identification (RFID) tracking and discriminating “Friend or Foe” modules (Friend or Foe refers to a Radio Frequency - based tagging system that validates individuals authorized to be in a specific area). Facility Safety and Security . A suite of artificial intelligence-based homeland security applications for the “hardening” or safety and resilience of facilities against natural or man originated threats for the protection of critical facilities (energy, water, chemical facilities). The Company and all of its staff are CFATS (Chemical Facility Anti-Terrorism Standards) certified. Remote Bridge Operation . Proprietary system for remote control of draw bridges. Collision Alert, Monitoring and Impact Analysis System . A system designed to automatically detect, document and record maritime vessels colliding with bridge structures, thereby causing significant damages, in real-time. Pantograph Inspection System . A system designed to inspect pantographs (structure connecting transit locomotives to high voltage power lines) for the detection of excessive depletion of carbon liners, which may cause power line ruptures. Vehicle Undercarriage Examiner (Security) . A system that builds upon our current undercarriage inspection technology. This second generation unit is able to inspect the undercarriage of railcars (both freight and transit rail) traveling at speeds of up to 70 miles per hour. Vehicle Undercarriage Examiner (Mechanical Inspection) . Under a similar development grant from the TTCI (the technology evaluation arm of the American Association of Railroads (“AAR”)), we developed a prototype targeting mechanical and structural anomalies of undercarriage components. The addition of algorithms for an increasing number of automated detection of anomalies is a continuing development, which once completed and successfully tested, may have a significant impact on our revenues. The next version upgrade is scheduled to be completed by the end of the second quarter of 2017. Multi-Layered Enterprise Command and Control Interface . Aggregator and central point for information consolidation, systems management and communications of our proprietary systems and third-party applications. Several significant new programs and technologies are currently under development and in various stages of maturity. Some of the more significant developments are: Neural Network Modeling for detection algorithms . A neural network is a powerful computational data model, able to capture and represent complex input/output relationships. The neural network includes the development of an artificial system that could perform "intelligent" tasks like those performed by the human brain, including the acquisition of knowledge through deep learning, which is stored within inter-neuron connection strengths known as synaptic weights. Automated Retail Facility Logistics . We are currently in the process of developing a comprehensive system to automate facility security gate operations. Transit Rail Platform Analytics . We have been selected by the New York City Transit Authority (“NYCT”) to provide a pilot (proof of concept) of our Platform Analytics Technology concept. The technology is designed to automatically detect objects falling on tracks adjacent to transit passenger platforms and to alert incoming rail traffic to that effect. Intelligent Pedestrian Identification Portal . A system that will integrate several biometric data points from inbound and outbound pedestrians to and from the US. The system will enable US Customs to automatically capture critical biometric data from visitors “entering” and “leaving” the country without slowing down pedestrian traffic. The data will be processed by our combined praesidium® and centraco® platforms and result in the capability of tracking inbound visitors that overstay their permitted visa duration. We have submitted a comprehensive proposal to receive an award for a pilot system for proof of concept during the current fiscal year. --- We were incorporated on May 31, 1994 in the State of Florida as Information Systems Associates, Inc. Initially, our business operations consisted of consulting services for asset management of large corporate data centers and development and licensing of Information Technology (IT) asset management software. On April 1, 2015, we completed a reverse triangular merger, pursuant to an Agreement and Plan of Merger (the “Merger Agreement”) among Duos Technologies, Inc., a Florida corporation (“DTI”), the Company, and Duos Acquisition Corporation, a Florida corporation and wholly owned subsidiary of the Company (“Merger Sub”). Under the terms of the Merger Agreement, the Merger Sub merged with and into DTI, whereby DTI remained as the surviving corporation and a wholly-owned subsidiary of the Company (the “Merger”). On the same date, TrueVue 360, Inc. a Delaware corporation became a wholly owned subsidiary of the Company. In connection with the Merger, on July 10, 2015, the Company effected a name change to Duos Technologies Group, Inc. --- Duos Technologies Group, Inc. 6622 Southpoint Drive South, Suite 310 Jacksonville, Florida 32216 Telephone number: (904) 652-1616 Our website: www.duostech.com.
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