Good afternoon. Welcome to Duos Technologies Second Quarter 2019 Earnings Conference Call. During the presentation your lines will remain on listen-only mode. [Operator Instructions]. Joining us for today's call are Duos’ Chairman and CEO, Gianni Arcaini and CFO Adrian Goldfarb. Following their remarks we will open up the call for your questions. And before we conclude today's call, I will provide necessary cautious regarding Forward-Looking Statements made by management during this call. I would like to turn the call over to Duos’ Chairman and CEO Gianni Arcaini. Sir, please proceed.

Well, thank you very much Christen. Welcome everyone and thank you for joining us today. Earlier today, we issued a press release announcing our financial results for the second quarter of 2019 as well as other operational highlights. A copy of this press release is available in the Investor Relations section of our website. Additionally, as some of you may have seen, we also issued an additional press release relating to a new contract win for Rail Inspection Portal business. I plan to provide additional commentary on our results as well as this new win shortly But before we begin with a discussion of our results, I would like to take a few minutes as we always do to provide a brief overview of who we are and what we do, particularly for those of you who may be less familiar with our Company. At Duos we provide advance medical technology solutions with a strong portfolio of intellectual property. In simple terms, we create highly sophisticated technology solutions for a wide range of customers. We focus on improving their business processes to ultimately provide a measurable ROI. To that end, we have been continue to develop a broad range of proprietary technologies, which we typically deploy as turnkey systems. These advanced tools include machine learning and other forms of artificial intelligence as well as advanced video analytics that we deliver through a combination of our image capture technologies suite, which includes backend, processing and middleware Praesidium and our customer facing software platforms blended as centraco. Our key focus remains in mission-critical security, inspections and operational applications. Our target markets predominantly include the rail transportation, retail distribution, critical infrastructure security and law enforcement sectors. We estimated the total addressable market opportunity in our combined core target markets exceeds about a $100…

Thank you, Gianni. Before getting into my discussion of the Q2 results, I would like to give some perspective between this quarter's results and the very strong quarter we recorded in Q1. On previous calls, I discussed how the majority of our revenue is recognized and our adoption of ASC 606 at the beginning of last year. Comparisons of each quarter are now on the same accounting basis. Our results last quarter were positively impacted by several factors including early completion of certain projects. Conversely, our Q2 results were negatively impacted by delays in completing customer installations due to external factors. In addition, one anticipated major contract was delayed substantially awaiting sign offs related to the multi country nature of the project. And we are pleased to report that as announced this morning, the specific contract has now been executed and will be substantially completed this year as scheduled. As I have also discussed in previous calls, our revenue recognition policy is based on the principles of ASC 606 using the input method. Although ASC 606 was not effected during this quarter, our results can vary substantially between measurement periods, and are highly dependent on the stages of completion of our project business. This will become less pronounced as the business grows. Our revenues are spread between a greater number of projects and recurring revenues portion of our business becomes more meaningful. Now turning to our financial results for the second quarter of 2019. Total revenue for the second quarter decrease 58% to 1.4 million compared to 3.2 million in the equivalent quarter in 2018. The decrease in total revenue was primarily due to execution delays by one customer acceptance in the projects portion of our business. As well as an additional delay by another customer to the start of…

Well, thanks, Adrian. I would like to provide some key updates from the quarter, as well as expanding up on our outlook in the remainder of the year. As I mentioned in my opening remarks, we continue to make incremental progress on our product roadmap. Starting in Q1, we formed a dedicated team of development engineers to focus specifically on expanding our existing technology roadmap. I'm pleased to report that the early efforts from this group have already translated into promising results, as we announced a number of new products offerings during the quarter. First in May, we announced apis3D, which is our next generation automated Pantograph Inspection System employing 3D technology as well as algorithmic defect analysis for transit and light rail train inspection. This solution is in high demand in the United States and we are working on several projects opportunities with a number of national rail operators. We believe this product has the potential to accelerate the rail industries ongoing transition to Automated Inspection Systems. In June, we announced the release of our next generation Automated Logistics Information System, or ALIS, which now includes AI capabilities enabling automation of critical gatehouse processing for trucks and train likes in the distribution centers of our staging yards. The growth of distribution center operations throughout the country is driving ever increasing demand for technology advancements that provide additional cost savings and efficiencies. That addition of AI to ALIS system is expected to increase gate throughput. Address loss prevention challenges, provide a secure entry and exit, as well as a reduction in yearly expenses and costs and also ensure the protection of Company assets. Our product development team is currently working on a number of technology upgrades and new technologies we will discuss at a later date. While we of course…

Thank you. [Operator Instructions] thank you. We have an incoming question coming from the line of [Peter Brafe] (Ph) private investor.

Hello, since I heard during presentation at the Trickle Research Conference here in Denver last spring and got interested in following the story ever since. So this new contract that you announced in the press release today for 2.3 million, is this one of the contracts you referred to as being one that did not close in the second quarter?

Yes.

And I don't know if you could answer this enough, but is this a U.S., railroad customer?

Yes. That is a U.S. railroad.

Okay. Now do you report a backlog figure? I didn't see it in the press release.

Yes. So we don't officially report a backlog figure in our investor presentations, which typically would present at like events like you, you were in the Trickle Research, and also the other conferences. As part of the presentation, I gave kind of an overview of our backlog pipeline and I do update that. Every quarter, there will be an update coming out probably in the next couple of weeks. That is not an official number. It is just to give some guidance, because as you can see, with this nature of the project businesses we have mentioned, things can shift between quarters, now I have often spoken about that.

Sure. And also, you mentioned at the time, I believe you mentioned that the New York Subway System was one of several Municipal Systems that are evaluating your stuff. Is the Chicago Metra, I don't know is that the Chicago Subway System that was Metra is?

Yes, it is.

So do you think that - I mean, that sounds like a pretty significant event to sign them on, are you continuing to see a lot of interest in other transit systems in other major cities, either in the U.S., or in other parts of the world?

Well, currently we are focusing on the U.S. market. And there is a strong desire by U.S., transit organizations to stay in Made in America. That gives a little bit of an advantage to some competitors, which are all overseas. One of the reasons we have accelerated the development of some of the transit solutions such as the apis3D and Support is really at urge of some of the larger transit systems in the United States. And there is a lot of activity there. There is probably about 12, 13 very large transit systems and I can tell you we are talking to all of them.

And the nature of these businesses is it initial contract, which if everybody is happy will expand into a longer term relationship with follow-on orders that would increase the magnitude of the overall value overtime?

Yes, that is a fair assessment. Yes.

Okay. Alright. Well, good. I will continue to follow you guys and thank you. Good progress.

Thank you.

Thanks for joining.

Okay. [Operator Instructions] Thank you. Okay, so the next question is coming from the line of [William Bremer] (Ph) [indiscernible] Capital.

I want to get a sense of your capital allocation given your balance sheet at this time, in terms of capital needs for the next say 12 to 18 months what do you see given the bookings that are starting to develop?

So that is good question, so we originally did - just to give you a little bit of history. We originally did a capital raise back at the end of 2017 and that was at the time sufficient capital for us to execute the business with a two-year outlook. So were about where we are with that. And the way that that works is that we started off with about $2 million thereabouts in working capital and as we go through the project phases, we will draw down and build up on that. Obviously with some of the delays with this balance sheet particularly at the end of Q2 we have gone to the lower end of that which is pretty typical for us in this project cycle. Now as we go forward, we are obviously going to evaluate that if the business looks like the growth is accelerating, which the early indication that it are, we will obviously evaluate what our capital needs going forward, but I can tell you from my standpoint, the management hasn’t made yet any assessment on ultimately what we are going to do in that area.

And maybe I follow-up on that. We always have to be very conservative in what we disclose during these call. As a Chairman I’m anxious to tell you much more, but I get pull backed by attorneys and our CFO and CAO. The thing is that typically, the rule of thumb we have based on our history is about 20% off your top revenue, of your annual revenue as working capital. So we gave guideline of about 50 million for this year, which we believe we are going to achieve. So if you calculate 20% of that it’s about three million. We were able to convert some of the warrants, so we had an inflow this year of about $2.3 million. However most of that was used for the startup cost of truevue360, which was really the purpose of this initial additional rates. So at this point in time let me put it this way, we feel that we will have enough runway for this year, we are not cash-in-cash, we are not ready to go to the cash swimming pool, but we are used to live a kite life and we will certainly reach out at the end of the year. Between now and next year we are not give you a guidance at this point, but next year looks like would be a significant growth and we will have to adjust our capital needs for that purpose. Now remember, one of the things that we have always announced is we also are planning to up listing to NASDAQ which we have disused in detail because it is a known factor. With this up listing to NASDAQ, we have a number of strategic plans in-line and you probably will see very soon some of our thoughts and strategies.

I wish you all the very best in terms of getting to NASDAQ and I do hope that your next raise or two given your bookings and the strength of the Company as its turning you do get better economics.

That really we are certainly planning to, you know when we did the raise in 2017, because of time delays of the capital raise and all these things, our backs were a little bit to wall. But we have a totally different situation today. And I agree with you, we probably will be much more aggressive in terms of pricing and support.

My last question is, is there any place on the website that gives investors an opportunity to know where you will be presenting to come see you going forward?

Yes, we have on our investor website I believe, there is a section of - on the right side there is a section where we say where we are either presenting or any other events. We have an event coming up in September, we are presenting in September. So but if you have any additional question, please feel free to call Adrian, he can help you and tell you exactly when we are where. Or Gateway, you can call Gateway as they know to track us down, but Gateway will not know the industry events. But they are published in our website.

And also we put out press releases when we are going to present it in the background as well ahead of time.

But feel free to call us anytime.

Thank you very much, gentlemen. Good luck.

Thank you.

At this time, this concludes our question-and-answer session. I would now like to turn the call back over to Mr. Arcaini for closing remarks.

Alright, thank you very much, Christian. So I hope that our presentation was helpful for all of you. And as I said before, please feel free anytime to either call Adrian, if you want financial information. You can call me if you need strategic information or then Gateway who knows both. Again, thank you for joining us today. It is pleasure to thank our employees, partners and investors for their continued support. We look forward to updating you on our next call. Operator.

Before we conclude today's call, I would like to provide you a Safe Harbor statement that includes important cautions regarding Forward-Looking Statements made during this call. This earnings call contains forward-looking statements between the meaning of the Private Securities Litigation Reform Act of 1995. Forward looking terminology such as beliefs, expects, may, will, should, anticipate, plans and their opposites or similar expressions are intended to identify forward-looking statements. We caution you that these statements are not guarantees of future performance or events and are subject to a number of uncertainties, risks and other influences many of which are beyond our control, which may influence in the accuracy of the statements and the projections upon which the statements are based and could cause the Duos Technologies Group 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 One A, induce 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. Thank you for joining us today for the Duos Technologies Group 2019 second quarter earnings conference call. You may now disconnect.