Good afternoon. Welcome to Duos Technologies Fourth Quarter and Full Year 2023 Earnings Conference Call. Joining us for today’s call are Duos’ CEO, Chuck Ferry; and CFO, Andrew Murphy. Following their remarks, we will open the call for your questions. Then, before we conclude today’s call, I’ll provide the necessary cautions regarding the forward-looking statements made by management during this call. Now, I would like to turn the call over to Duos’ CEO, Chuck Ferry. Sir, please proceed.

Thank you. Welcome everyone, and thank you for joining us. Earlier today, we issued a press release announcing our financial results for the fourth quarter and full year 2023 as well as other operational highlights. A copy of the press release is available in the Investor Relations section of our website. I encourage all listeners to view that release as well as our 10-K filing with the SEC to better understand some of the details we’ll be discussing during our call. Today, in addition to giving commentary on the recent financials, I’m going to update the assessment I gave during the last earnings call. During that call, I told you that I believe the company was in the best position it had ever been to achieve our strategy and long-term value for shareholders. We anticipated that short-term financial headwinds, as manifested in our results for last year, would provide additional challenges for us in executing our strategy. I am pleased to report that, despite these challenges, our mid- and long-term outlook remains unchanged, and I’m expecting much improved performance for 2024. Outside of the most recent financial results, the company continues to make significant progress on many different strategic programs, and I’ll be giving you a more comprehensive assessment in my commentary following the financial report from our CFO. What remains critical for us in the coming 12 months is to complete the transition from a volatile CapEx-only business to a technology-focused subscription business with steady recurring revenue. We’ll update you on progress with our plan and the critical milestones to achieve this after we review the financial results. Over to you, Andrew.

Thank you, Chuck. As we have discussed in previous calls, Duos has historically operated with periods of intermittent growth, interspersed with temporary lulls as large new contracts begin the execution cycle and progress through various stages of development. Our results for Q4 and the full year exemplify this volatility in revenue, underscoring the continued challenges in a purely CapEx model and supporting our ongoing efforts to focus on a primarily subscription-based model in the future. In addition, the company is currently pursuing certain opportunities that are within our technology-based expertise of machine vision and AI systems, but addressing additional industries which Chuck will speak to in his assessment. To be clear, the business results for Q4 2023 were disappointing, but anticipated based on delays out of our control with three of our existing customers. Forecasting and timing of revenues for the railroad industry that is adopting new cutting-edge technology has been challenging, and we are making adjustments to ensure we achieve break-even and make the business more predictable. We remain strongly positioned within the rail sector and now within the artificial intelligence value chain to make this company prosper. Let’s now get into our results for the quarter and for the year. Total revenue for the quarter decreased 76% to $1.52 million compared to $6.35 million in the fourth quarter of 2022. Total revenue for the year decreased 50% compared to 2022. Much of the decrease was due to customer-driven delays beyond the company’s control during the ongoing production of the two high-speed transit-focused RIPs, and thus resulting in timing delays at the overall project delivery, shifting anticipated revenues into the second half of 2024. The company also began its transition into a greater focus on AI software and support services, much of which are recurring revenue where there was…

Thank you, Andrew. We continue to be told by our current customers, potential customers, regulators, and labor unions that our railcar inspection portal is best in class in terms of performance, reliability, and standardization of the hardware, software, IT infrastructure, and artificial intelligence. We have shown the technology to a significant number of car manufacturers, owners, and shippers, and the audience is at first stunned by the capability, and then the conversation turns how to use this data, which to our knowledge has never previously been available, how it can be used to increase overall return on investment in terms of safety, cost of risk, maintenance efficiencies, and improvement to velocity and dwell metrics. Recently, I met with a senior leadership team for our large passenger customer, where they’ve been using the data from a subscription from several portals and are very excited by the excellent results they’ve received thus far. We anticipate this customer will continue to expand the use of this technology in the future. In 2023, we were requested to show the technology to more than 30 congressmen and senators on Capitol Hill and several state legislators and governors. We have also demonstrated the technology to the national leadership of Mechanical Carmen, who strongly believe this tool would greatly benefit rail safety when used by qualified mechanical personnel. We have also demonstrated our technology to the Customs and Border Patrol Agency and have shown them where we can discover suspected illegal riders with our machine vision and artificial intelligence detections. They are keen to use this solution to assist with the challenges at the border, and it can be used to increase CBP officers’ safety and help railroads get across the border faster. Our challenge is to turn that positive reaction into contracts that grow revenue and…

Thank you. [Operator Instructions] Our first question comes from the line of Ed Woo with Ascending Capital Markets. Please proceed with your question.

Yes, thank you for taking my question, and congratulations on the progress. As we move further and further away from the major train accident in East Palestine, Ohio last year, what’s the regulatory environment, and do you see that the legislative Congress is still putting train safety as a high priority?

Yes, it’s good to hear from you. So, I think just a brief update, so you’ve got the Railway Safety Act Bill 2023 waiting its turn on the Senate floor, and then it’s still in committee over on the House side. I think as we’ve, as you said, gotten further away from East Palestine and gotten closer to the national elections, I think the likelihood, and I think the consensus is pretty common amongst all the industry stakeholders, that the likelihood that that Railway Safety Act goes through, I think, is diminishing. I think what we have, though, said publicly a number of times is that despite that fact, the railroads in general, the rail industry, has gotten a lot more focused on safety in general. We’ve seen a lot of our Class 1 customers, as well as short lines, make investments quietly into additional wayside detection technologies. We’re in discussion with a lot of them about ours. I think you’ve also got what we’ve said before, that our strategy to expand our technology on a larger scale into this industry should not rely, and does not rely, on the passage of that bill. Since East Palestine, we’ve gotten a lot more commercial activity. We’ve said before, it takes a little while to move from inquiry to contract here with large Class 1s, but we are making progress, and I expect to announce some of that in the coming quarters. Hopefully that answers the question.

Yes, it does. Thank you, and I wish you guys good luck. Thank you.

Okay, appreciate it. Thank you, Ed. I don’t see any other questions. I’ll just forward right this moment. I’m sorry, go ahead, moderator.

Apologies. Management will now take select listeners submitted questions.

Okay, so we took some written questions in, and I’ll work through a couple of them that I think are appropriate here. One of the questions was, there’s been several articles recently published in Railway Trends’ websites regarding Crisi [ph] grants and potential inspections of machine vision projects. Can you comment if Duos has been awarded in Crisi-related projects? So, that’s a good question, and we did see some recent press release related to Crisi projects. At this point right now, we cannot confirm any awards related to Crisi projects. However, we can say that several of our existing customers, potential new customers, appear to either be expecting to receive Crisi money, or in some cases, actually receive some Crisi money. And we believe some of those will bear fruit for us here in 2024. The next question, again, which is a good one, I alluded to it in my comments. It says, you’ve mentioned before about diversifying the business to enhance Duos’s position with AI and machine vision. And can you further elaborate on this? So, Duos has already had and continues to establish a reputation for delivering fast, real-time, data-driven results for our rail customers. Part and parcel with our railcar inspection portal, we’ve now got years of experience conducting edge computing where we’re doing this AI edge processing and inferencing is what they call it. And all that sits out in those edge data centers. And so, we’ve gotten a lot of experience in that. And recently, in partnership with both Dell and NVIDIA, we’ve been introduced to a different set of folks in the telecommunications industry that are interested in seeking our assistance in placing edge data centers out. This is something we’ve been quietly working on for the last year. But now we think we’re…

Thank you. At this time, this concludes our question-and-answer session. I’d now like to turn the call back over to Mr. Ferry for his closing remarks.

Yes, I really appreciate everybody joining the call, and we look forward to follow-on calls to give you updates on the business. Thank you.

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 within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking terminology such as believes, expects, may, will, should, anticipates, 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 the accuracy of the statements and the projections upon which the statements are based and could cause Duo’s Technologies Group Inc. 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 1A in Duo’s annual report on Form 10-K, which is expressly incorporated herein by reference and other factors as may periodically be described in Duo’s filings with the SEC. Thank you for joining us today for Duo’s Technologies Group’s fourth quarter and full year 2023 earnings call. You may now disconnect.