Description of Duos Technologies Group, Inc.s Securities
The following is a summary of the terms of each class of securities of Duos Technologies Group, Inc. (the Company) that is registered under Section 12 of the Securities Exchange Act of 1934, as amended.
The following summary of the terms of the Companys common stock, par value $0.001 per share (the Common Stock), is not complete and is subject to and qualified in its entirety by reference to the relevant provisions of the laws of the State of Florida, the Companys Amended and Restated Articles of Incorporation, as amended (the Articles of Incorporation), and its Amended and Restated Bylaws (the Bylaws). Copies of the Articles of Incorporation and Bylaws have been filed as exhibits with the Securities and Exchange Commission.
The total number of shares which the Company is authorized to issue is 510,000,000 shares, consisting of 500,00,000 shares of Common Stock and 10,000,000 shares of preferred stock, par value $0.001 per share (the Preferred Stock). As of March 23, 2021, we had 3,534,869 shares of Common Stock issued and outstanding and an aggregate of 6,205 shares of Preferred Stock of various series issued and outstanding.
The Common Stock is traded on the NASDAQ Capital Market under the symbol DUOT. The transfer agent for the Common Stock is Continental Stock Transfer & Trust.
Voting and Other Rights
Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held of record by such holder on all matters on which shareholders generally are entitled to vote, except as may be otherwise provided in the Articles of Incorporation (including any Certificate filed with the Secretary of State of the State of Florida establishing the terms of a series of Preferred Stock) or by the Florida Business Corporation Act (the Act). The holders of Common Stock do not have any cumulative voting rights. Subject to the Act and the rights (if any) of the holders of any outstanding series of Preferred Stock, dividends may be declared and paid on the Common Stock at such time and in such manner as the Board of Directors, in its discretion, shall determine. The Common Stock has no preemptive rights, conversion rights or other subscription rights, or redemption or sinking fund provisions. Upon the dissolution, liquidation or winding up of the Company, subject to the rights (if any) of the holders of any outstanding shares of Preferred Stock, the holders of Common Stock shall be entitled to receive the assets of the Company available for distribution to shareholders ratably in proportion to the number of shares held by them.
Anti-Takeover Effects of Florida Law and our Articles of Incorporation and Bylaws
Certain provisions of Florida law, our Articles of Incorporation and our Bylaws contain provisions that could have the effect of delaying, deferring, or discouraging another party from acquiring control of us. These provisions, which are summarized below, may have the effect of discouraging coercive takeover practices and inadequate takeover bids. The provisions are also designed, in part, to encourage persons seeking to acquire control of us to first negotiate with our Board of Directors. We believe that the benefits of increased protection of our potential ability to negotiate with any unfriendly or unsolicited acquiror outweighs the disadvantage of discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.
Board Composition and Filling Vacancies
Our Bylaws provide that, at a meeting of the shareholders called expressly for that purpose, any director or the entire Board of Directors may be removed, with or without cause, by a vote of the holders of a majority of the shares of each class or series of voting stock present in person or by proxy then entitled to vote at an election of directors. Board vacancies and newly-created directorships resulting from (i) an increase in the authorized number of directors, (ii) death, (iii) resignation, (iv) retirement, (v) disqualification, or (vi) removal from office, may be filled by a majority vote of the remaining directors then in office, although less than a quorum, or by the sole remaining director, and each director so chosen shall hold office until the next annual meeting of shareholders and until such directors successor shall have been duly elected and qualified.
Shareholder Meetings and Advance Notice Requirements
Our Bylaws establish advance notice procedures with regard to a shareholders ability to call a special meeting as well to shareholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our shareholders. These procedures provide that notice of shareholder proposals must be timely given in writing to our corporate secretary prior to the meeting at which the action is to be taken. Generally, for a shareholder proposal to be timely, notice must be received at our principal executive offices not less than 120 days nor more than 150 days prior to the first anniversary of the date the Company released its proxy materials to its shareholders for the prior years annual meeting of shareholders or any longer period provided by applicable law. Our Bylaws specify the requirements as to form and content of all shareholders notices. These requirements may preclude shareholders from bringing matters before the shareholders at an annual or special meeting.
Sections 607.0901 and 607.0902 of the Act
As a Florida corporation, we are subject to certain anti-takeover provisions that apply to public corporations under Florida law. Pursuant to Section 607.0901 of the Act, a publicly held Florida corporation, under certain circumstances, may not engage in a broad range of business combinations or other extraordinary corporate transactions with an interested shareholder without the approval of the holders of two-thirds of the voting shares of the corporation (excluding shares held by the interested shareholder).
An interested shareholder is defined as a person who together with affiliates and associates beneficially owns more than 15% of a corporations outstanding voting shares. We have not made an election in our Articles of Incorporation to opt out of Section 607.0901.
In addition, we are subject to Section 607.0902 of the Act which prohibits the voting of shares in a publicly-held Florida corporation that are acquired in a control-share acquisition unless (i) our board of directors approved such acquisition prior to its consummation or (ii) after such acquisition, in lieu of prior approval by our board of directors, the holders of a majority of the corporations voting shares, exclusive of shares owned by officers of the corporation, employee directors or the acquiring party, approve the granting of voting rights as to the shares acquired in the control-share acquisition. A control-share acquisition is defined as an acquisition that immediately thereafter entitles the acquiring party to 20% or more of the total voting power in an election of directors.
Authorized Blank Check Preferred
The Board of Directors is authorized to provide, out of the unissued shares of Preferred Stock, a series of Preferred Stock and, with respect to each such series, to fix the number of shares constituting such series, and the designation of such series, the voting and other powers (if any) of the shares of such series, and the preferences and any relative, participating, optional or other special rights and any qualifications, limitations or restrictions thereof, of the shares of such series. The powers, preferences and relative, participating, optional and other special rights of such series of Preferred Stock, and the qualifications, limitations or restrictions thereof, may differ from those of any and all other series of preferred Stock at any time outstanding. The powers and rights of any series of Preferred Stock may be superior to, or otherwise limit, the rights and powers of the Common Stock.