Duos Technologies Group Announces Sale of Rail-Tech Subsidiary

What Happened

• Duos Technologies Group, Inc. announced it entered into a Stock Transfer Agreement with Sandbank Acosta, LLC to transfer all issued and outstanding shares of its wholly‑owned rail technology subsidiary, Duos Technologies, Inc. (DTI). The agreement is dated August 5, 2026 and effective as of June 30, 2026.
• The divestiture closed on August 5, 2026, and DTI ceased to be a subsidiary of Duos Technologies Group. A press release was issued on August 6, 2026.

Key Details

• Sale structure: Company contributed intercompany balances to DTI and funded DTI with $3,500,000 in cash prior to closing.
• Consideration: At closing, DTI issued a promissory note to Duos Technologies Group for $5,435,403 principal, bearing simple interest at 5% per annum, payable in full on August 5, 2031; prepayment allowed without penalty.
• Note adjuster: The Note permits setoff for certain out‑of‑pocket costs DTI incurs to complete installation/commissioning of rail inspection portals if such costs exceed related customer payments during a defined lookback period.
• Transition terms: Duos will provide HR, payroll/benefits, and accounting coordination to DTI through December 31, 2026 on a cost‑reimbursement basis plus a 5% handling fee, and will remain employer of record for certain leased employees through year‑end 2026 with employment costs reimbursed by the purchaser.

Why It Matters

• This is a material divestiture of Duos’ legacy Technologies (rail) segment. The company has converted the subsidiary holding into a seller‑promissory note and cash adjustment rather than an all‑cash sale, which affects future cash flows and the company’s balance sheet composition.
• Investors should note near‑term operational ties remain through transition and employee‑leasing arrangements (through Dec 31, 2026) and that the promissory note’s repayment (and potential setoffs tied to customer project costs) will determine actual proceeds realized from the divestiture.
• The removal of DTI from consolidation may reduce reported revenue and costs going forward for Duos, and the company has disclosed the material agreements and a press release as exhibits to the 8‑K.