Good afternoon. Welcome to Duos Technologies Fourth Quarter and Full Year 2019 Earnings Conference Call. 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. Then before we conclude today's call, I will provide the necessary cautious regarding Forward-Looking Statements made by management during this call. Now, I would like to turn the call over to Duos’ Chairman and CEO Gianni Arcaini. Sir, please proceed.

Thank you, Jessie. Welcome everyone and thank you for joining us. First and foremost, our heart goes out to the many families impacted by the devastating effects of the coronavirus. Our thoughts and prayers are with you and your loved ones. I'm sure our company news may not be a priority on your mind today, so we will keep today's remark a little shorter than usual. At this point, our company remains fully operational. Earlier today, we issued a press release announcing our financial results for the fourth quarter and full year 2019 as well as other operational highlights. Copy of this press release is available in the Investor Relations section of our website. I plan to provide additional commentary on our results shortly. As you know, we provide advanced analytical technology solutions with a strong portfolio of intellectual property. In simple terms, we create highly sophisticated technology solutions for our wide range of customers. We focus on improving the business processes to ultimately provide a measurable return on investment. To that end, we have been continued to develop a broad range of proprietary technologies, which we typically deploy as turnkey systems. Our focus is increasingly shifting to advance deep machine learning, and artificial intelligence applications as well as advanced video analytics that we deliver through a combination of our image and data capture technology suite, which includes backend with processing and middleware branded as praesidium and our customer facing software platform branded as centraco. Just a side note, all of our software applications are proprietary and developed in-house. Our key focus remains on mission critical security, inspection 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…

Thank you, Gianni. On previous calls, I have discussed how the majority of our revenue is recognized as a result of our adoption of ASC 606 at the beginning of last year. Comparisons of each quarter are now on the same accounting basis and should also be noted that the financial results I’ll be discussing represent the consolidation of the Company with the subsidiaries Duos Technologies Inc and truevue360. All of our investments in the new AI subsidiary are incorporated in the Company's operating expenses. As I've also discussed in previous calls, our revenue recognition policy is based on the principles of ASC 606 using the input method. Now turning to our financial results for the fourth quarter and full year 2019, total revenue for the fourth quarter increased 125% to $5.75 million, compared to $2.56 million in the equivalent quarter in 2018. The significant increase in total revenue was partially the result of timing shifts from previous quarters and was also driven by the current strength of the projects portion of our business with additional contributions for maintenance and technical support. For the full year 2019, total revenue increased 13% to $13.64 million, compared to $12.05 million in the equivalent year ago period. Gross profit in Q4 was 3.15 million or 55% of revenues, which was an increase of 176% from $1.14 million, or 45% of revenues for the equivalent quarter in 2018. The increase in gross profit was driven by the increase in project revenues previously mentioned and the positive effect of continuing revenue increases from new projects. Gross profit for the full year 2019 was 6.48 million or 48% of revenues, an increase of 25% compared to 5.2 million or 43% of revenues for the full year 2018. The implementation of ASC 606 covering revenue contracts with…

Well, thank you, Adrian. I will now highlight some of our major achievements and wins for the year as well as provide an update on our trueview360 activities. Beginning first with our customer wins. In January of this year, we successfully implemented the first full-scale Rail Inspection Portal or rip in record time for CSX Transportation, one of the seven Class 1 Railroad operators who own and operate a combined 140,000 miles of rail track. After completion, the portal was featured in a promotional video published by CSX, highlighting their renewed and expanded commitment to safety, improvement and technological enhancements. As an existing customer, a first time buyer of our next generation rip, CSX has shown that they remain committed to working with cutting edge technology providers like Duos to ensure the highest level of safety and efficiency. The next phase of this initial project includes the addition of artificial intelligence algorithms, which when installed over the coming months will mark the completion of CSX's overall initial process. Next, we also substantially completed another rip with a different customer, which is scheduled for final acceptance at the site in Mexico before the end of this month obviously that's today or tomorrow. Overall in Q4, we completed engineering and the launch of a significant beta test installation of a state-of-the-art 3D version of Duos’ automated pantograph inspection system for we call it apis, at a transit rail location in Chicago. We recently also completed installation of an individual version of our -- so industrial version of our portal technology with specific focus on tank car inspection in Michigan. Finally, we also completed our next generation centraco platform, which will provide additional security and logistics for baking group. When we mix the truevue360, at the beginning of the first quarter of 2019,…

Thank you. Ladies and gentlemen, at this time we will be conducting a question-and-answer session. [Operator Instructions] Our first question will come from the line of Ashok Kumar with ThinkEquity. Please proceed with your question.

Good afternoon, Adrian and Gianni. Two questions just and the first is. Could you address the long-term drivers of your financials, the rising ASPs and margins and initiatives in new industries? And two is relatively to your original 2020 revenue forecast of 20 million. Would it be safe to say that you do have the things in place to support those revenues as the timing of it is uncertain? Thank you.

Thank you, Ashok. I'll take the first part of the question. So the current improvements in gross margin, as I addressed in my comments, are related to an overall increase in selling price. That's not necessarily because we're increasing prices, but the configurations of a lot of our systems are getting more extensive, now as we move into the AI sector. Of course, we're producing more systems and certainly did in year 2019. And so, there are certain economies of scale that come along with that. And overall, as we get a little bit more efficient, that drives an overall increase in gross margins. Related to the second part of your question, which in terms of the original 20 million guidance and whether their bookings in place, I think our comments addressed it. We obviously take our guidance extremely seriously. We maintain a lot of detail analysis to show whether we're going to meet or exceed certain guidance. But at this time, there's so much uncertainty around that that we're being very cautious about any statements that were given. As I mentioned, our first half revenues are probably likely to be lower than the equivalent period last year just because of the uncertainty. And at this time, there's no as Gianni mentioned, there's no actionable information that would say that we would change the 20 million other than it's not prudent for us at this time to make any further comment on that.

Yes, as a follow on to what Adrian said, Ashok. We actually, internally have a pipeline that is much higher than 20 million, but the caution is really geared towards the function ability of our customers given you an example. Some of our customers as part of the immediate coronavirus workflow changes would not allow people to go to the active tracks, because they don't have sufficient flag people to help others like Kohl's or other logistics companies where we were hoping to do some of the revenue in the first quarter. Second quarter obviously they have shut down like Macy's. They just put 120,000 people. TJ Maxx closed. They all closed operations for the time being. So we don't believe that this will impact us significantly because we looked at what are the potential negative impact of delays. We just believe that our third and fourth quarter will be real hectic. We like it. Last year, we almost doubled revenue in the fourth quarter and we are going to be staffed adequately. So at this point in time, we don't want to read the alarm bell, but just a cautionary note, as you all know what's going on worldwide.

Gianni and Adrian, this is a takeaway, there is due to the macro headwinds, the purchase orders related to the bookings could take longer to execute?

Sorry, could you repeat the question, Ashok?

So, the takeaway is because of the macro headwinds, the purchase audience related to the bookings to take longer to execute?

Not longer, but we will shift later in the year.

[Operator Instructions] Our next question comes from the line of Michael Legg with the Benchmark Company.

Could you guys just talk a little bit about the rip platform and all the different elements that can be incorporated into it from the high end price point and what entry level is? And then talk a little bit about what you're seeing on the order side from that and where the price point maybe in the middle?

The basic system price point is about 1.8 million. We are negotiating with one of our customers to now add very significant detection capabilities. If you remember, maybe you don’t, but the total detection targets, number of detection targets about 100. If you go to the FAA and look at what they expect to be detected and to be automatically detected to replace the manual inspection, it's a total of little 100 detection targets. We are teaming up with IBM on this in fact CN has engaged IBM, who is working very hard on developing some of the algorithms, and we will of course integrate all these into our platform centraco. So, the expanded system or the system expansion itself is about 1.2 million. So, if you look at the long term, the rip total cost of ownership -- not cost of ownership, but the cost to acquire the new version is between $2.5 million and $3 million.

Thank you. [Operator Instructions] Thank you. At this time, this concludes our question-and-answer session. I'd now like to turn the call back over to Mr. Arcaini for any additional closing comments. Mr. Arcaini, if you'd like to conclude the call.

Sorry, we had put it on mute not to disturb you. So as I said, I would wish that we would have a call under better circumstances. Our team is ready and able to complete any project that comes our way, even in this interim period, the fact we are dispatching some of our team members up to Tennessee to add some technology to some of our customer sites. There's one opportunity that I can't quantify exactly, but the transit transportation is now more able to give us a track time. So, there might be a silver lining on the sky for immediate revenue. So, thanks again everybody. Please feel free to call us directly, if you have any questions. You know you can always call Adrian or myself. Thank you very much.

Thank you. Before we conclude today's call, I would like to provide you Duos’ Safe Harbor statement that includes important cautions regarding Forward-Looking Statements made during this call. This earnings call contains forward-looking statements within 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 Inc.'s 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 fourth quarter and full year earnings conference call. You may now disconnect.