Duos Technologies Group, Inc. Common Stock LD Micro 20th Annual Main Event Conference

We're going to get started with our next presentation of the afternoon. I would like to introduce Doug Recker, CEO of Duos Technologies. Welcome. Hello, everyone. Thank you for coming in and listening to our little pitch today.

We appreciate it. What we're going to start out, we want to tell you a little bit about who Duos is. These slides will obviously be on an 8-K today. We have some very important information we're going to share with you. We just got the word, legal approved it, so we're going to announce it. You're the first to hear it. It'll go out to the market tonight. We're extremely proud of it. It's a huge announcement for us. But let me go through this boring stuff first, and then I'll tell you about the exciting stuff. What we do is basically, we build and operate data centers. In the very beginning, Duos Technologies, I'll give you the history.

Duos Technologies Group was a rail inspection portal business that was basically going out of business. Over my 30 years experience of building and owning and operating data centers, I sold my last company called EdgePresence, which basically deployed in tier 3 and tier 4 markets, smaller data centers. So I sold that, and in my backyard in Jacksonville, Florida, there was a company called Duos Technologies Group. They did rail inspection portals. So basically, that company was suffering. So I went to that business and I said, "Look to the shareholders and the board, let me turn this into a data center centric business. You have the platform for it.

I'll get out there and build the stock back up and build your investors get their money back." So what we did is recently, in the news you'll see in July, I sold that business off, the rail business. It was basically burning cash for years. So we got rid of that business. Now we are 100% focused on what we know how to do, which is over 30 years of building and owning and operating data centers. How we're different is in a bunch of ways. First of all, where did my little clicker go? Okay, here we go. Just to go through kind of what we do. When we build data centers, we actually aren't the hyperscale, 100 megawatt. We found a niche, which I've seen for years, which is basically the 1 to 20 megawatt range.

Now you ask yourself, "Well, who needs 1-20 megawatt if everybody is looking at 100 megawatt sites?" Who needs those are the folks that are sitting on GPU right now and need to burn them. The reason why we go to 1-20 megawatt, basically, is we go to stranded power. Where there's power already there, we go and take it down, whether it was a Bitcoin miner or in a tier 3 or tier 4 market, which is our strengths. You'll see power that's sitting at the substation that they've built out for years of growth that never happened. That is what we call stranded power, and it's power that's available. When we go to these markets, we can actually deploy in under six months. We can build a 1 megawatt facility or a 20 megawatt facility under six months.

That's the key there. The key is obviously power. The second key is fiber. If you can find both of those together, you're in a winning combination. The other piece why we're so popular and why we can get this done in six months is we build modular. If you ever looked at our website, you'll see these modular buildings that we build, but they're not really where the GPU is going in. We build modular on the actual infrastructure side. Basically, you see the long lead times, you see the issues that they're having in these 100 megawatt, 50 megawatt, gigawatt facilities, is they can't get that equipment in time. When you're in the 1-20 meg range, that's not really off the shelf, but it's pretty close to off the shelf.

I can buy 1 meg generators and parallel them to 10 meg in under four months. Really, that market you can deploy quicker and you can deploy at around-- Our latest numbers show we're deploying around $6 million-$6.5 million a meg, unlike the $12 million-$14 million that the big ones are using. The reason for that is because we build everything in a factory. What we call our E-House is our electrical components. That's our UPS, our switchgear, our main transformers, all that are built remotely. Then Trane builds our chiller plant, which is a closed loop system. They all come to the facility at one time. Basically, we have just land that we'll take, and we'll build a tilt wall building really quickly, and that's where the actual cabinets and GPU go inside.

Or we'll take over an existing building and bypass everything in the building and bring the infrastructure outside. That's really our niche on how we deploy quickly and why we're deploying in the $6 million-$6.5 million range. The next question, and like I said, we're filing an 8-K, so this whole presentation will be on there. Basically, we're the landlord, right? We build the facilities. We don't own the GPU. We really don't really care what they bring into our facility as long as they pay our rate. Our rate right now is basically, it's very strong. We charge about $180 a KW, and then we do what's called a power passthrough. It's almost like we build a powered shell for our customers. We don't mark the power up. It's a straight passthrough. When you see our numbers, Chris will go over those in a little bit.

Basically, our profit is on that 180 per KW, which is really unheard of right now in this market. The reason customers are paying that is because we can deploy so quickly, and they can get their GPUs to work. They are not sitting on them. They are getting the pressure to burn them. It used to be the cluster had to be a megawatt. Now they are looking at clusters that are 4.5 megawatt. With that said, we just deployed our first cluster, with Axe Compute, who has a tier 1 customer, tier 1 hyperscaler, that we just deployed 4.7 megawatt in under 75 days. That customer got to revenue very quickly, got to turn their GPUs. Supermicro came in, delivered their product. We had it up in 75 days.

That gets them to revenue quickly, and it gets us to revenue quickly. It is very important that you understand that we do not own the GPU, we do not take the risk. I do not care if that GPU goes like this in price or comes down. Ours is a fixed price, and now they are 5 to 10-year terms is what we do. Basically, our model is we basically buy the facility first, or we find the powered land first, then we go to contract. We sign with the customer. The big issue you have seen in the market and you have read all about is people are not getting their GPUs up. They are signing contracts. We have a customer, a tier 1 customer, who signed 80 plus colo agreements last year. 3 of them came to fruition. 3. 3 came up.

What they are doing is they are signing with a bunch of people hoping the power is going to come up, and it is not coming up. We actually have the power. The customer goes and sees the site. We are not waiting on the utility. Usually, the transformers are already on the property, so that is a big win. Then we can actually put them in service quickly. Then they deploy their GPU, and it does not matter if it is a hyperscaler CDN, it does not matter who they are. We personally are providing a colo environment where we guarantee the power is up 24/7, the five nines, and our SLAs show that. We are bringing it back to the traditional colo player. We are just like a DataBank. We are just like a QTS, but on a smaller scale.

I used to own Colo5 data centers were just like that, the big brick and mortar data centers. But I saw that there was going to be a market for the 1 to 20. Let me give you an example. Let us just use one of my old data centers, like in Jacksonville, Florida. That was a 2 meg facility. Those customers, I sold that in 2014 to Cologix. Those customers, a majority of them are still there. But now you have customers calling and saying, "Doug, I have 120 cabinets. My average usage is 7 to 12 KW. Now I am switching to a new platform, which is AI. Now I need 60 KW." They cannot do that. They cannot upgrade the facility for several reasons. One, that facility is landlocked, so there are buildings all around. You cannot add 16 more generators out there. Plus the cooling. There's a whole new cooling plant.

That issue is huge for enterprise. Everybody's looking at hyperscalers, looking at neo clouds. What happens to the Blue Crosses of the world? Where do they go? They don't go in the Microsoft's data center. They don't go into CoreWeave's data centers. They have their own structure. They have their own networks. They have no place to go. You're going to start seeing this 1-20 MW is a very popular spot to be and a need. The great thing about that is when you are selling 1-20 MW, you go into a community, it's a lot easier to sell a 1-20 MW and show them the tax benefits and show them that you're not using their water, you're not destroying their environment. They won't even know you're there.

It's a lot easier to get in and to grow our business. That's why we're strong where we are and we're deploying. The big issue in the market right now is, hey, how are you allowed to build when nobody else is? We're in that small niche of that 1-20 range. We actually just signed a contract and deploying in Roberta, Georgia, a 4 MW customer. That 4 MW customer is a Neocloud, but it's a very well backed Neocloud. You're asking yourself, 4 MW? You'll start to see that Anthropic came out with their latest news where they're going to deploy. I would predict they're going to deploy hundreds of 1-2 to 3 MW sites for inference. That's just one. You're going to start seeing these pop up everywhere.