Duos Technologies (US:DUOT)2021-03-29 16:00Revenue Performance - For the year ended December 31, 2020, total revenues decreased by 41% to $8,039,448 compared to $13,641,315 in 2019[142] - The technology systems revenue dropped by 59% from $11,963,438 in 2019 to $4,956,130 in 2020[142] - Technical support revenue increased by 31% to $1,801,043 in 2020, while consulting services revenue decreased by 9% to $273,604[142] - The AI technologies segment recorded its first revenue in Q2 2020, with a significant contract exceeding $2 million expected to contribute to future revenues[146] Profitability and Loss - Gross profit for 2020 was $2,786,393, representing a 57% decline from $6,481,438 in 2019, with gross margin decreasing from 48% to 35%[151] - The company experienced a net loss of $6,747,435 in 2020, compared to a net loss of $2,470,882 in 2019[142] - The net loss for 2020 was $6,747,435, compared to a net loss of $2,470,882 in 2019, representing an increase of $4,276,553[157] - Management expects improvements in gross margins driven by higher sales from both existing and new customers in the coming year[151] - The company expects to achieve profitability through a strategic plan implemented in 2021, focusing on maintaining key operations and technical staff[154] Expenses and Costs - Cost of revenues decreased by 27% to $5,253,055 in 2020, with technology systems costs down 44% to $3,665,493[147] - Total operating expenses increased by 6% to $9,420,821 in 2020 from $8,887,960 in 2019, primarily due to a one-time severance charge of approximately $885,000[152] - Research and development expenses decreased by 31% to $1,022,188 in 2020 from $1,479,334 in 2019, reflecting a shift in focus after completing the TrueVue360 platform[152] - Interest expense rose to $150,137 in 2020 from $69,322 in 2019, primarily due to financing actions taken during operational slowdowns[155] Cash Flow and Financing - Cash provided in financing activities was $8,431,621 in 2020, significantly up from $3,086,083 in 2019, mainly due to proceeds from a registered direct offering and a CARES Act PPP loan[164] - Net cash used in operating activities was $4,231,439 in 2020, slightly higher than $4,019,560 in 2019, attributed to increased operating costs[162] - The company maintained a cash balance of $3,969,100 as of December 31, 2020, with an increase to approximately $7,435,000 by March 26, 2021[158][165] Financial Position - The accumulated deficit increased to $39,488,150 in 2020 from $32,740,715 in 2019, while working capital improved to $2,167,058 from a negative $607,372[169] - The company has no off-balance sheet contractual arrangements, ensuring transparency in its financial obligations[172] Revenue Recognition and Accounting Policies - The company recognizes revenue from multiple element arrangements separately based on the standalone value of each element and specific evidence of selling prices[184] - Accounts receivable are reported at estimated net realizable value, considering historical trends and specific customer issues for allowances[185] - The company evaluates long-lived assets for impairment when the net book value exceeds estimated future undiscounted cash flows[187] - No derivative instruments or hedging activities are held by the company, indicating a straightforward risk management approach[188] Strategic Focus - The company anticipates continued growth in recurring technical support revenues, which are expected to positively impact overall revenues and gross margins[151] - The company is focusing on expanding its technology base through strategic partnerships and acquisitions, particularly in the rail transportation sector[138]