Material Agreement Form 8 K

Item 1.01 Entry into a Material Definitive Agreement

On July 22, 2024, Duos Technologies Group, Inc. (the "Company") and Duos Edge AI, Inc. ("Edge"), a wholly-owned subsidiary of the Company, entered into secured promissory notes (the "Notes") with two institutional investors in the Company. Under the Notes, Edge received an aggregate of $2.2 million. The Notes mature on December 31, 2025, and bear interest at the rate of 10% per annum. All principal and accrued interest under the Notes are due and payable on the maturity date.

Edge will use the proceeds under the Notes solely to pay for the equipment and any services necessary to complete the installation of its previously-announced edge data centers. As security for the Notes, Edge and the Company entered into a Security Agreement (the "Security Agreement"), pursuant to which Edge granted a first priority security interest in the equipment installed at the edge data centers, as well as all revenues from such equipment, and the Company pledged all proceeds from its previously-announced "at-the-market" offering of its common stock pursuant to the prospectus dated May 17, 2024. All of the pledged revenues from the equipment and the at-the-market offering will be deposited in a blocked account and used solely to repay the Notes.

In connection with the Notes, the Company issued warrants (the "Warrants") to purchase an aggregate of 300,000 shares of common stock. The Warrants are exercisable at $3.00 per share (subject to adjustment) and expire in five years. In the event the Notes are not paid by the maturity date, the interest rate on the Notes will increase to 18% per annum and the Company will issue additional warrants (with the same terms as the Warrants) to purchase an aggregate of 75,000 shares of common stock for each 30 days that the Notes are not paid after maturity.

The Company has guaranteed all of Edge's obligations under the Notes pursuant to the terms of a Guaranty (the "Guaranty"). The Notes, Security Agreement and Guaranty contain customary representations, warranties, agreements, and indemnification rights and obligations of the parties.

The foregoing descriptions of the Notes, the Security Agreement, the Warrants, and the Guaranty do not purport to be complete and are subject to, and qualified in their entirely by, such documents, forms of which are attached as exhibits to this Current Report on Form 8-K and incorporated herein by reference.