Duos Technologies divests rail unit to firm tied to its CFO

Duos Technologies Group (NASDAQ: DUOT) completed the sale of its legacy rail technology subsidiary, Duos Technologies, Inc. (DTI), to Sandbank Acosta, LLC on August 5, 2026, under a Stock Transfer Agreement effective June 30, 2026.

The purchaser, Sandbank Acosta, is owned 50% by Adrian Goldfarb, the company's Interim Chief Financial Officer, and 50% by Javier G. Acosta, a private investor. The company's Board of Directors reviewed and approved the transaction, which is classified as a related party transaction.

Under the terms of the agreement, Duos Technologies contributed all outstanding intercompany balances to DTI as a capital contribution and funded $3,500,000 in cash into DTI's accounts prior to closing. At closing, DTI issued a promissory note to the company in the principal amount of $5,435,403, bearing simple interest at 5% per annum, due in full on August 5, 2031, with no prepayment penalty. The note's principal was calculated to equal DTI's net asset value following the $3,500,000 cash contribution.

The note is subject to a right of setoff for certain out-of-pocket costs incurred by DTI to complete the installation and commissioning of rail inspection portals under specified customer contracts, to the extent such costs exceed related customer payments received during a defined lookback period.

In connection with the closing, Duos Technologies and the purchaser entered into a Transition Services Agreement under which the company will provide DTI with human resources, payroll and benefits administration, and accounting coordination support through December 31, 2026, on a cost-reimbursement basis plus a 5% handling fee. The parties also entered into an Employee Leasing Agreement under which the company will remain the employer of record for certain DTI employees through December 31, 2026, with employment costs reimbursed by the purchaser.

Following the closing, officers and directors of DTI affiliated with Duos Technologies resigned from their DTI positions. Goldfarb resigned as President of DTI but retained his role as Chairman of DTI, while continuing as Interim CFO of Duos Technologies.

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