Duos Technologies (US:DUOT)2025-05-15 20:45Financial Performance - Total revenues for Q1 2025 reached $4,952,185, a 363% increase compared to $1,070,680 in Q1 2024[275] - The net loss for Q1 2025 was $2,079,663, compared to a net loss of $2,752,309 in Q1 2024, indicating an improvement in financial performance[275] - Revenues for the three months ended March 31, 2025, were $4,952,185, a 363% increase compared to $1,070,680 in the same period of 2024[282] - The net loss for the three months ended March 31, 2025, was $2,079,663, a 24% decrease from $2,752,309 in the same period of 2024[286] - Gross margin improved to $1,313,659 in Q1 2025, representing a 1,288% increase from $94,632 in Q1 2024, primarily due to revenue from the Asset Management Agreement with New APR[282] Revenue Sources - Services and consulting revenue surged by 510% to $4,887,501 in Q1 2025, primarily due to the execution of the Asset Management Agreement (AMA) with New APR[276][277] - The Railcar Inspection Portal (RIP) is being transitioned to a modular and subscription-based model, enhancing recurring revenue streams[273] - The company anticipates continued growth in services revenue from both rail and power businesses throughout 2025[278] Operational Activities - The cost of revenues increased by 273% to $3,638,526 in Q1 2025, driven by the support of the AMA and increased operational activities[279] - Total operating expenses increased by 9% to $3,103,287 in Q1 2025, up from $2,855,678 in Q1 2024, with sales and marketing expenses decreasing by 47%[283] Capital and Financing - Cash flows provided by financing activities were $2,788,033 in Q1 2025, primarily from gross proceeds of $3,954,940 from the At-The-Market offering program[290] - The company has raised over $11,500,000 from the sale of Series E and F Preferred Stock in 2023 and approximately $3,954,940 in gross proceeds during the first two months of 2025[295] - The company expects to continue executing its revenue diversification strategy and anticipates sufficient capital to support operations over the next twelve months[291][296] Future Plans and Expansion - The company is expanding into Edge Computing and power generation markets, with a focus on leveraging existing technology infrastructure[268] - A long-term agreement with a major Class 1 railroad was secured, enabling new subscription-based services for over 3,000 railcar owners and lessors[269] - The company plans to deploy six Edge Data Centers in the first half of 2025, with an additional nine sites expected in the second half of 2025[273] - Duos Energy is managing approximately 850 MW of generating capacity and has a two-year AMA valued at approximately $42 million with New APR[273] Deferred Revenue and Intangible Assets - The Company recorded $7.2 million of deferred revenue for services to be performed under the AMA agreement, with no revenue recognized during the year ended December 31, 2024[305] - The Company recognized $199,008 of deferred revenue related to a completed pilot program, with the remaining deferred revenue being recognized over the 5-year term[312] - An intangible asset with a fair value of $11,161,428 was recorded in May 2024, representing non-monetary consideration under a 5-year customer contract for maintenance services[310] - The fair value of the intangible asset was determined based on the standalone selling price of the service and goods to be provided under the contract[311] - There is no indication of impairment for the intangible asset at March 31, 2025[315] Cash Flow and Working Capital - Net cash used in operating activities was $4,673,425 for Q1 2025, compared to $2,032,719 in Q1 2024, driven by increased non-cash add-backs and a significant build-up in accounts receivable[288] - The company had a working capital deficit of $6,502,554 as of March 31, 2025, with an accumulated deficit of $76,447,672[287][294] Management and Impairment - Management believes that the anticipated steady cash flow from the Asset Management Agreement will mitigate concerns regarding the company's ability to continue as a going concern[297] - The Company assesses its equity method investment for impairment whenever events indicate that the carrying amount may not be recoverable[309] - No impairment losses were recognized during the year ended December 31, 2024, or the three months ended March 31, 2025[309]