Good afternoon. Welcome to Duos Technologies' First Quarter 2025 Earnings Conference Call. Joining us for today's call are Duos' CEO, Chuck Ferry; and CFO, Adrian Goldfarb. 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'd like to turn the call over to Duo's CEO, Chuck Ferry. Please go ahead, sir.

Welcome everyone and thank you for joining us. Earlier today, we issued our earnings press release and our 10-Q for the first quarter 2025. Copies are available in the Investor Relations section of our website. I encourage all listeners to view the press releases and our 10-Q filing to better understand some of the details we'll be discussing during today's call. Since our last earnings call in March, only 6 weeks ago, we’ve made significant progress, particularly in our Power and Edge Data Center lines of business. Let’s first talk about our Power line of business. Through our Asset Management Agreement with APR Energy, we have now successfully contracted 570 megawatts with the APR Energy’s gas turbine fleet which is an increase of 180 megawatts since our last report 6 weeks ago. I expect the contract to close on an additional 160 megawatts in the coming two weeks. Altogether, this means we will have approximately 730 megawatts of gas turbines contracted in just 5 months for entering into our Asset Management Agreement with APR Energy and Fortress Investment Group. These assets will be deployed across multiple projects in The United States and Mexico in the coming 3 months. With our Edge Data Center business called Duos Edge AI, we have previously reported contracting our first Edge Data Center in Amarillo, Texas in support of school district 16. We now have customer commitment for an additional 8 Edge Data Centers and expect to complete these installation in the coming 6 months. We remain confident in our plan to place 15 Edge Data Centers by the end of this year. Overall, we are on track to execute our strategy and meet the guidance that we have previously issued. With that, I’ll turn it over to Adrian Goldfarb, to our CFO, to get further into the financial review.

Thank you, Chuck. Before covering the specific results for the first quarter, I will make some brief introductory remarks discussing the progress that has been made during this quarter. I will also discuss some of the additional disclosure we are making in our 10-Q related to recording our financials given that we are now operating in 3 distinct segments. It is important to understand that while the results being presented are significantly improved compared to a year ago, this is just the beginning of a wholesale transformation for Duos. As a reminder, we now record financials for 3 separate divisions: Duos Technologies, which in the last few years has focused on the rail industry; Duos Edge AI, a wholly-owned subsidiary which was started last summer with the objective of moving into the Edge Data Center market with a product that is a spin-off from our railcar inspection portal; and Duos Energy, also created last summer as a vehicle for us to supply services to the behind-the-meter power business. Duos Energy now serves as a vehicle for supporting our Asset Management Agreement or AMA with New APR. Each division has a distinct role and objectives with the goal of growing Duos to becoming a much larger entity. While we have not had the success we hoped for in the rail industry, we have been successful in building some world class technologies and the reaction is universally positive to what can be accomplished. Despite the slow adoption of the rail industry, a lot of work continues with our key customers, and we also plan to roll out some new products later this year, both in software and hardware. Our Edge AI division has been extremely active in marketing the concept of a remote but highly capable data center to serve local communities…

Thank you, Adrian. As you can see from Adrian’s commentary, the business has made good progress since the beginning of the year. Let me add some additional details to my opening remarks. With our Asset Management Agreement supporting APR Energy, closing commercial contracts in both the data center space and traditional fast power jobs has gone at a lightning pace. As I said earlier, we have 570 megawatts in contract now and expect that to increase to 730 megawatts in the next 2 weeks. As a reminder, through the Asset Management Agreement, we operate approximately 850 megawatts of power generation along with balance of plant where we provide turnkey power plants normally installed within 30 to 90 days depending on the situation. Currently, we have 2 projects here in The United States fully installed and operating. One of them is with a large data center operating as part of a behind-the-meter solution. In progress currently are 2 more installations. The first is with another U.S. data center operating a behind-the-meter solution, and the second is a traditional fast power project in Mexico. We are expecting a third project that will provide a fast power solution for another U.S. customer who has an immediate need. I expect all projects to be online producing electricity in the next 90 days or so. Simultaneously, we are in discussions with multiple U.S. data center developers for longer term behind-the-meter power solutions. Our staff is also assisting APR Energy in evaluating follow on asset acquisitions to expand the fleet. The positive effect for Duos is a solid source of revenues through the Asset Management Agreement and growing the value of our 5% equity stake in APR Energy’s parent. With our Edge Data Center business, Doug Recker [ph] and his team have also made best progress…

Thank you. [Operator Instructions] And our first question comes from the line of Michael Latimore with Northland Capital Markets.

It looks like an awesome start to the year here. In terms of the Power business, it looks like gross margin was around 32%. Is that kind of a good range to think about throughout this year?

Yes. So on the on the Power business, we feel very confident in the forecast that we put together for the year on that. And yes, so that’s a that’s a good number to think about for our gross margin. Obviously, as we go through the year, we’re going to try to improve that and there’ll be some opportunities I think to try to do that.

Got it. And looks like you’re -- you’ve got really good visibility on the data center business. You know, in the past you’ve sort of talked a little bit about maybe some hyperscaler opportunities. Can you give any up update on that?

Yes. So, you know, one of the things that really kind of flipped the switch on that was we -- it was in the press, of course, was the our first Edge Data Center we put into Amarillo and Support Region 16 [ph], and that really attracted a lot of attention from a lot of these other customers down -- down in the State of Texas, and also outside of Texas. But -- so that really kind of spurred that on. It also attracted the attention of a couple of different hyperscalers that I would prefer not to disclose their names at this time but we are in active discussions with probably about 3 or 4 hyperscalers that are interested in putting their product, if you will, or their computing power into these Edge Data Centers, in support of these smaller markets. And then also, interested in behind-the-meter power, as they’re developing a larger data center part. So it’s kind of win-win for both those lines of business.

Excellent. And I guess just 2 clarification questions. Adrian, did you say you expect 2Q to be similar to 1Q in terms of revenue?

Yes. We -- as I said, we don’t normally give quarterly guidance but I am expecting that Q2 will be similar to Q1.

All right. And then -- just last one for me. What should we have stock comp and depreciation before the second quarter-end year? Just trying to back in an EBITDA number here.

Yes. So the so the stock comp is running at about it’s about $500,000 or 600,000$ a quarter. And then -- sorry, what was the other number you asked on that?

Depreciation.

Yes. The depreciation will start to increase as the Edge Data Centers come online but I don’t expect much impact for that for Q2.

Okay, great. Thanks. Congrats on the great start here.

The next question comes from the line of Ed Woo with Ascendiant Capital Markets.

Yes. Congratulations also on the progress. My question is, you know, there’s been a little bit of volatility obviously with the tariffs. Have you noticed any change in the sales cycle of trying to sign contracts either in the Edge Data Center business or with your Power business? Have you had any change in macro outlook with any of your potential customers?

No. No. We haven’t. And we’re actually in pretty good shape compared to some other companies in that regard. On the Power side, you know, APR Energy owns all of the assets and all of the assets right this moment are in The United States; and so those are literally shielded from tariffs. If APR with our assistance thinks about buying more assets than we are -- I stated that in my comments, those could potentially be subject to tariffs. But right now, it’s of no impact to us. On the Edge Data Center side, there are some raw materials that are used in those construction of the Edge Data Centers that could be subject to the tariffs. But right now, we’re kind of shielded by that based on the agreement that we have with Accu-Tech but it is something for us to watch. But, again, for right now there is no impacts to us on those 2 lines of business.

And you don’t really see people kind of holding off on signing deals or entering into agreements with you guys?

No. Not at all. In these 2 lines of business, commercially they’re both on fire right this moment which is a great thing for us. So there is no slowdown right now. And it -- well, where it has put us into an enviable position where we’re able to kind of evaluate which customers we actually want to prioritize. So right now, we’re in good shape.

Great. Great to hear that and I wish you guys good luck. Thank you.

And the next question comes from the line of Dan Weston with West Capital Management.

Congrats guys on all the progress; the transformation seems pretty astonishing. A couple of questions. The -- on the Edge Data Center, on your guidance of 150 to 200 [ph] by end of year 2027, given 15 [ph] by the end of this year, that assumes a pretty massive ramp going into the next 2 years. How do you see that playing out? In other words, would you expect all of those to be for the typical school districts that you’ve been targeting or do you have some contribution coming in from the potential hyperscaler customers you’re speaking with?

Yes. No, Dan. Thanks for the question. I would see it as a combination of both. So right now we’re focused -- because we’re just getting a lot of a lot of activity on these school districts down in Texas which are in a good position where they have federal and state funds to kind of pull these things in. It allows us to go and install on their property and not have to pay a whole lot from a real estate perspective. And then it attracts a lot of customers from that local market now to fill out that educated center [ph]. So it’s a win-win scenario there. As I said before, we are in discussion with a couple different hyperscalers. What we’re seeing in this data center space is that because there’s not enough power for the -- for many of the larger data center parks to be had right this moment. Many of the data center hyperscalers are taking a real hard look at go using Edge Data Centers which don’t require as much power in one location. In other words, they’re kind of distributed out amongst a particular area; it’s easier to get power for them. And so they’re looking at not only individual Edge Data Centers at a particular location but potentially small -- what we call, pod farms [ph], where you have 5, 10 -- or maybe upto 20 of these things in a single location that they don’t draw nearly as much power and they get the computing put out closer to where the customers need it. So I -- we’re going to see more of that and I anticipate we’ll probably be able to commercially talk about that in more detail. I’m going to bet here in the next quarter or 2 for sure based on those discussions.

No. I appreciate that, Chuck. You mentioned the scarcity of power for the large data center parks. Can you provide any updates relating to your project out in Tampa, the large park there? Any additional commentary or timing you’re expecting to have that operational?

Yes. We publicly talked -- we’re absolutely committed to developing APR Energy with Fortress Investment Group as their sponsor, and of course, we’re a part of that. The plans right now are going to develop that data center park. We have progressed it to the point where we will close on actually owning the property there, probably in the next 2 months. And then, all of the studies and all the prep work that goes in is ongoing right now. So APR and their -- what will make their final decision to progress that here in the next month or so. And when they do, they’ll announce that. But I would tell you that there are other similar opportunities that look a lot like Tampa as well. So, you know, kind of watch this space because this is an opportunity where we’ll be assisting APR and providing, obviously, the temporary bridging behind-the-meter power, very likely a permanent power solution and then the actual buildout of the data center park itself for 1 or 2 of the key hyperscalers that we’re in discussions with right now.

Yes. I really appreciate that color, Chuck. You forget the -- maybe the remedial question but considering the current portfolio of power is soon to be sold out, if you will, how do you see that playing out in terms of allocating for new projects, whether it be Tampa or others and that come on-stream? Anything that you can talk to would be appreciative.

Yes. So the -- so our fleet of power turbines, obviously, it’s finite. And again, you’ll -- it will be obvious to those who are familiar with that business. I’ve been careful not to tell folks, at least in this call, the length of term of contracts and things like that. So, you know, very broadly, a lot of the work that we’ve contracted is for work to be performed this year and it’ll allow us to -- it’ll allow APR Energy and we’ll benefit through the Asset Management Agreement to monetize assets very, very quickly; shortly after this -- shortly after the acquisition of these things. And then we have probably 3 or 4 very large behind-the-meter data center projects that are already lined up to take these assets. So effectively, what we’re trying to is we’re trying to maintain a very high utilization rate of those assets. That’s the name of the game in that business; it is high utilization rate. I will say that the demand for this is so high, we are assisting APR Energy in evaluating opportunities to acquire additional assets so we can actually grow the overall value of the APR business. And, of course, for us, we benefit from that 5% ownership stake in that business. So it’s a win-win for both companies.

I appreciate that, Chuck, answering the questions. And congrats, again. The progress has been really amazing. So, good luck. Thanks very much.

Thanks, Dan. Appreciate it.

Thank you. Ladies and gentlemen, this concludes the question-and-answer session. I’ll hand the call back to Mr. Ferry for closing remarks.

Yes. Thanks very much, operator. Again, thanks to everybody that’s on the call today. And then and again, just want to reiterate my thanks to all of our partners, our shareholders, our Board members. And then, a special thank you to the Duos leadership and employee team that’s making all this good stuff happen. Thank you very much.

Before we conclude today's call, I would now like to provide Duos Safe Harbor statement that includes important cautions regarding forward-looking statements made during the 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 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 the accuracy of these statements and the projections upon which the statements are based and could cause 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 1-A in Duos 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 on for Duos Technologies Group's first quarter 2025 earnings call. You may now disconnect.