DocGo Inc. (NASDAQ:DCGO) Q3 2023 Earnings Conference Call November 6, 2023 5:00 PM ET Company Participants Mike Cole - Director of Investor Relations Lee Bienstock - Chief Executive Officer Norman Rosenberg - Treasurer and Chief Financial Officer Conference Call Participants Sarah James - Cantor Fitzgerald Richard Close - Cannacord Genuity David Larsen - BTIG Mike Latimore - Northland Capital Markets David Grossman - Stifel Ryan MacDonald - Needham & Co Pito Chickering - Deutsche Bank Operator Greetings, an ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income, statements of changes in stockholders' equity, and statements of cash flows, along with their accompanying notes for DocGo Inc. and its subsidiaries for the periods ended September 30, 2023 and 2022 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) ASSETS (in USD) | ASSETS (in USD) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | Accounts receivable, net | 207,324,368 | 102,995,397 | | Total current assets | 267,146,297 | 271,080,905 | | Total assets | 419,784,142 | 393,277,628 | | LIABILITIES (in USD) | | | | Accounts payable | 8,951,261 | 21,582,866 | | Accrued liabilities | 58,883,665 | 31,573,031 | | Total current liabilities | 113,059,417 | 100,158,490 | | Total liabilities | 128,231,727 | 114,350,237 | | STOCKHOLDERS' EQUITY (in USD) | | | | Total stockholders' equity | 291,552,415 | 278,927,391 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Metric (in USD) | Metric (in USD) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenues, net | 186,552,910 | 104,319,894 | 425,042,373 | 331,730,750 | | Cost of revenues | 131,502,046 | 71,254,838 | 296,346,420 | 219,418,873 | | Income from operations | 8,707,955 | 4,199,190 | 3,381,322 | 21,751,512 | | Net income | 4,630,239 | 2,466,486 | 2,055,068 | 23,594,786 | | Net income attributable to DocGo Inc. | 4,764,921 | 3,154,430 | (712,016) | 26,519,778 | | Basic EPS | 0.05 | 0.03 | (0.01) | 0.26 | | Diluted EPS | 0.05 | 0.03 | (0.01) | 0.24 | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Total stockholders' equity increased from **$278,927,391** as of December 31, 2022, to **$291,552,415** as of September 30, 2023, primarily driven by additional paid-in capital from stock-based compensation and exercise of stock options, partially offset by a net loss attributable to stockholders for the nine months ended September 30, 2023[14](index=14&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Activity (in USD) | Cash Flow Activity (in USD) | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------ | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | (58,303,111) | 37,607,545 | | Net cash (used in) investing activities | (26,919,379) | (37,793,968) | | Net cash (used in) provided by financing activities | (11,858,533) | 685,871 | | Net (decrease) increase in cash and restricted cash | (96,853,136) | 246,594 | | Cash and restricted cash at end of period | 67,255,938 | 179,352,324 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Description of Organization and Business Operations](index=15&type=section&id=1.%20Description%20of%20Organization%20and%20Business%20Operations) DocGo Inc. is a healthcare transportation and mobile health services company operating in the U.S. and U.K., utilizing proprietary dispatch and communication technology - DocGo Inc. provides healthcare transportation and mobile health services in the U.S. and U.K. using proprietary technology[26](index=26&type=chunk) - The company operates in two segments: Mobile Health Services (home/office services, COVID-19 testing/vaccinations, event support, total care management) and Transportation Services (emergency and non-emergency transport, including ambulance and wheelchair transports)[28](index=28&type=chunk) [2. Summary of Significant Accounting Policies](index=16&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines the significant accounting policies, including the basis of presentation, principles of consolidation (including VIEs like MD1), foreign currency translation, use of estimates, self-insurance reserves, concentration of credit risk, major customers and vendors, emerging growth company status, reclassifications, cash and cash equivalents, restricted cash, fair value measurements, accounts receivable, property and equipment, software development costs, business combinations, impairment of long-lived assets, goodwill, line of credit, related party transactions, revenue recognition, stock-based compensation, earnings per share, equity method investments, leases, and income taxes - The financial statements are prepared in accordance with U.S. GAAP and SEC interim financial reporting rules, consolidating DocGo Inc. and its subsidiaries, including the variable interest entity MD1[30](index=30&type=chunk)[32](index=32&type=chunk)[34](index=34&type=chunk) - The company has significant customer concentration, with **two customers accounting for approximately 33% and 32% of sales** and **36% and 28% of net accounts receivable**, respectively, for the three months ended September 30, 2023[43](index=43&type=chunk) - Revenue is recognized from Transportation Services and Mobile Health Services, with performance obligations satisfied immediately as customers simultaneously receive and consume benefits, and is recorded net of estimated contractual allowances[83](index=83&type=chunk)[85](index=85&type=chunk) Revenue Breakdown by Geographical Markets and Service Lines | Revenue Breakdown (in USD) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | **Primary Geographical Markets** | | | | | | United States | 174,076,595 | 101,337,899 | 385,589,261 | 322,706,143 | | United Kingdom | 12,476,315 | 2,981,995 | 39,453,112 | 9,024,607 | | Total revenue | 186,552,910 | 104,319,894 | 425,042,373 | 331,730,750 | | **Major Segments/Service Lines** | | | | | | Transportation Services | 47,212,443 | 27,670,109 | 132,690,538 | 77,657,852 | | Mobile Health Services | 139,340,467 | 76,649,785 | 292,351,835 | 254,072,898 | | Total revenue | 186,552,910 | 104,319,894 | 425,042,373 | 331,730,750 | [3. Property and Equipment, Net](index=25&type=section&id=3.%20Property%20and%20Equipment%2C%20Net) This section details the composition of property and equipment, net, and the associated depreciation expenses for the periods presented, showing an increase in net property and equipment from December 31, 2022, to September 30, 2023 Category (in USD) | Category (in USD) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------ | :----------- | :----------- | | Transportation equipment | 23,327,391 | 20,773,862 | | Medical equipment | 6,864,138 | 5,177,520 | | Office equipment and furniture | 3,507,597 | 2,686,065 | | Leasehold improvements | 656,662 | 579,658 | | Buildings | 527,283 | 527,283 | | Land | 37,800 | 37,800 | | Less: Accumulated depreciation | (13,068,208) | (8,524,013) | | Property and equipment, net | 21,852,663 | 21,258,175 | - Depreciation expense for the three months ended September 30, 2023, was **$1,625,070**, up from $1,150,806 in the prior year, and for the nine months ended September 30, 2023, it was **$4,697,717**, compared to $2,592,244 in the prior year[106](index=106&type=chunk) [4. Acquisition of Businesses](index=26&type=section&id=4.%20Acquisition%20of%20Businesses) DocGo Inc. completed several acquisitions in 2022 and 2023 to expand its medical services and transportation capabilities, involving a mix of cash, stock, deferred consideration, and contingent liabilities - In 2022, DocGo acquired Government Medical Services, LLC (GMS), Exceptional Medical Transportation, LLC (Exceptional), Ryan Bros. Fort Atkinson, LLC (Ryan Brothers), Community Ambulance Services Ltd. (CAS), and Location Medical Services, LLC (LMS) to expand its services and geographic presence[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk) - In 2023, DocGo acquired **51% of Cardiac RMS, LLC (CRMS) for $10 million** (cash and stock), the remaining shares of Ambulnz-FMC North America LLC (FMC NA) for **$7 million** (cash and stock), and the remaining shares of Healthworx LLC for **$1.385 million** in cash[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) Total Consideration for Acquisitions | Consideration Type (in USD) | Total Consideration | | :-------------------------- | :------------------ | | Cash consideration | 52,979,760 | | Stock consideration | 4,000,000 | | Due to seller | 17,279,201 | | Amounts held under an escrow account | 1,333,333 | | Contingent liability | 26,377,730 | | **Total consideration** | **101,970,024** | [5. ABC and Held for Sale](index=28&type=section&id=5.%20ABC%20and%20Held%20for%20Sale) Ambulnz Health, LLC initiated an ABC liquidation process in February 2023, leading to its assets and liabilities being classified as held for sale and subsequently derecognized from the consolidated balance sheet - Health ceased business operations and initiated an ABC liquidation process, with assets transferred to an Assignee for creditor distribution[121](index=121&type=chunk) - As of December 31, 2022, Health's assets and liabilities were classified as held for sale, and by September 30, 2023, all related assets and liabilities were adjusted to zero, indicating the completion of the held-for-sale classification[122](index=122&type=chunk)[125](index=125&type=chunk) [6. Goodwill](index=30&type=section&id=6.%20Goodwill) Goodwill balances were impacted by an impairment charge related to the Health reporting unit's liquidation in 2022 and increased due to acquisitions in 2023, with a carrying value of **$47.6 million** as of September 30, 2023 - A non-cash goodwill impairment charge of **$2,921,958** was recognized in 2022 due to the ABC filing of the Health reporting unit[127](index=127&type=chunk) Goodwill (in USD) | Goodwill (in USD) | Amount | | :------------------------ | :----------- | | Balance as of Dec 31, 2022 | 38,900,413 | | Goodwill acquired during the period | 8,642,190 | | Currency translation adjustment | 51,701 | | Balance as of Sep 30, 2023 | 47,594,304 | [7. Intangibles](index=32&type=section&id=7.%20Intangibles) Intangible assets increased significantly from December 31, 2022, to September 30, 2023, primarily due to additions in customer relationships and the reclassification of trade credits, with a corresponding increase in amortization expense Intangible Asset (in USD) | Intangible Asset (in USD) | Sep 30, 2023 Net Carrying Amount | Dec 31, 2022 Net Carrying Amount | | :------------------------ | :------------------------------- | :------------------------------- | | Patents | 69,089 | 52,707 | | Computer software | 13,900 | 22,942 | | Operating licenses | 9,399,004 | 8,799,004 | | Internally developed software | 1,441,939 | 1,905,147 | | Material contracts | 62,550 | 62,550 | | Customer relationships | 25,714,946 | 11,803,653 | | Trademark | 295,070 | 323,243 | | Non-compete agreements | 90,000 | — | | Trade credits | 1,500,000 | — | | **Total Intangibles, net** | **38,586,498** | **22,969,246** | - Amortization expense for intangibles increased to **$1,515,378** for the three months ended September 30, 2023 (from $990,345 in 2022) and to **$4,295,958** for the nine months ended September 30, 2023 (from $2,269,423 in 2022)[135](index=135&type=chunk) - Trade credits of **$1,500,000** were reclassified from accounts receivable to intangible assets in June 2023, representing the remaining amount owed by a customer for mobile health services, to be amortized as advertising services are used[138](index=138&type=chunk)[139](index=139&type=chunk) [8. Accrued Liabilities](index=34&type=section&id=8.%20Accrued%20Liabilities) Accrued liabilities significantly increased from December 31, 2022, to September 30, 2023, primarily driven by higher accrued subcontractors and accrued workers' compensation and other insurance liabilities Accrued Liability (in USD) | Accrued Liability (in USD) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Accrued subcontractors | 24,121,473 | 8,101,150 | | Accrued general expenses | 13,595,062 | 11,436,462 | | Accrued workers' compensation and other insurance liabilities | 10,786,533 | 3,766,469 | | Accrued payroll | 5,707,651 | 4,245,838 | | Accrued bonus | 1,893,172 | 1,500,717 | | Accrued fuel and maintenance | 902,789 | 253,243 | | Other current liabilities | 798,826 | 706,528 | | Accrued legal fees | 550,921 | 344,417 | | Accrued lab fees | 463,008 | 584,203 | | Credit card payable | 34,941 | 78,838 | | FICA/Medicare liability | 29,289 | 555,166 | | **Total accrued liabilities** | **58,883,665** | **31,573,031** | [9. Line of Credit](index=34&type=section&id=9.%20Line%20of%20Credit) DocGo Inc. entered into a **$90 million** revolving credit facility in November 2022, with an option to increase by **$50 million**, and drew **$25 million** on October 19, 2023, with no amounts outstanding as of September 30, 2023 - On November 1, 2022, the Company entered into a revolving credit facility for an initial aggregate principal amount of **$90,000,000**, with an option to increase by an additional **$50,000,000**[142](index=142&type=chunk) - The Revolving Facility matures on November 1, 2027, and is secured by a first-priority lien on substantially all of the Company's present and future personal and intangible assets[142](index=142&type=chunk) - As of September 30, 2023, no draws had been made, but on October 19, 2023, the Company drew down **$25,000,000**[142](index=142&type=chunk) [10. Notes Payable](index=35&type=section&id=10.%20Notes%20Payable) The company's notes payable, primarily for equipment and financing loans, increased from December 31, 2022, to September 30, 2023, with varying interest rates and maturity dates through 2028 Notes Payable (in USD) | Notes Payable (in USD) | Sep 30, 2023 | Dec 31, 2022 | | :------------------------------------ | :----------- | :----------- | | Equipment and financing loans payable | 2,740,991 | 1,901,514 | | Less: current portion of notes payable | (696,053) | (664,913) | | Total non-current portion of notes payable | 2,044,938 | 1,236,601 | - Interest expense on notes payable was **$48,794** for the three months ended September 30, 2023 (up from $26,296 in 2022) and **$110,203** for the nine months ended September 30, 2023 (up from $69,804 in 2022)[144](index=144&type=chunk)[145](index=145&type=chunk) [11. Business Segment Information](index=35&type=section&id=11.%20Business%20Segment%20Information) DocGo Inc. reports in three operating segments: Transportation Services, Mobile Health Services, and Corporate, with the Corporate segment centralizing shared services and leadership costs since Q1 2023 - Beginning Q1 2023, the Company reports in three segments: Transportation Services, Mobile Health Services, and Corporate, with the Corporate segment handling shared services and senior leadership costs[146](index=146&type=chunk) Segment Operating Results (Three Months Ended September 30) | Metric (in USD) | Transportation Services (2023) | Mobile Health Services (2023) | Corporate (2023) | Total (2023) | Transportation Services (2022) | Mobile Health Services (2022) | Corporate (2022) | Total (2022) | | :-------------------------- | :----------------------------- | :---------------------------- | :--------------- | :----------- | :----------------------------- | :---------------------------- | :--------------- | :----------- | | Revenues | 47,212,443 | 139,340,467 | — | 186,552,910 | 27,670,109 | 76,649,785 | — | 104,319,894 | | Income (loss) from operations | 503,687 | 21,109,619 | (12,905,351) | 8,707,955 | (3,858,715) | 17,962,484 | (9,904,579) | 4,199,190 | | Total assets | 129,796,548 | 225,084,373 | 64,903,221 | 419,784,142 | 102,061,123 | 84,096,109 | 169,762,978 | 355,920,210 | | Depreciation and amortization expense | 2,333,426 | 1,193,187 | 809,654 | 4,336,267 | 1,688,219 | 550,034 | 776,611 | 3,014,864 | | Stock compensation | 136,472 | 274,108 | 2,950,130 | 3,360,710 | 152,163 | 80,351 | 878,689 | 1,111,203 | | Capital expenditures | 3,016,381 | 1,692,902 | 783,422 | 5,492,705 | 4,839,972 | 11,504,148 | 1,009,414 | 17,353,534 | Segment Operating Results (Nine Months Ended September 30) | Metric (in USD) | Transportation Services (2023) | Mobile Health Services (2023) | Corporate (2023) | Total (2023) | Transportation Services (2022) | Mobile Health Services (2022) | Corporate (2022) | Total (2022) | | :-------------------------- | :----------------------------- | :---------------------------- | :--------------- | :----------- | :----------------------------- | :---------------------------- | :--------------- | :----------- | | Revenues | 132,690,538 | 292,351,835 | — | 425,042,373 | 77,657,852 | 254,072,898 | — | 331,730,750 | | Income (loss) from operations | 853,164 | 52,081,169 | (49,553,011) | 3,381,322 | (11,737,903) | 71,540,872 | (38,051,457) | 21,751,512 | | Total assets | 129,796,548 | 225,084,373 | 64,903,221 | 419,784,142 | 102,061,123 | 84,096,109 | 169,762,978 | 355,920,210 | | Depreciation and amortization expense | 6,137,364 | 3,111,497 | 2,567,796 | 11,816,657 | 4,127,322 | 980,677 | 2,145,657 | 7,253,656 | | Stock compensation | 612,077 | 573,930 | 13,975,840 | 15,161,847 | 827,946 | 486,231 | 3,219,582 | 4,533,759 | | Capital expenditures | 16,460,730 | 28,109,057 | 3,159,172 | 47,728,959 | 3,317,127 | 10,884,649 | 5,908,513 | 20,110,289 | [12. Equity](index=38&type=section&id=12.%20Equity) The company's Board of Directors authorized a share repurchase program of up to **$40 million** in May 2022, under which **536,839 shares** were repurchased and cancelled in 2022, with no repurchases during the nine months ended September 30, 2023 - A share repurchase program of up to **$40,000,000** was authorized on May 24, 2022, expiring November 24, 2023[155](index=155&type=chunk) - In 2022, **536,839 shares** were repurchased for **$3,731,712** and subsequently cancelled, with no shares repurchased during the nine months ended September 30, 2023[155](index=155&type=chunk) [13. Stock-Based Compensation](index=38&type=section&id=13.%20Stock-Based%20Compensation) This section details the company's stock option and restricted stock unit (RSU) activity, including grants, exercises, cancellations, and associated compensation expenses, with significant unrecognized compensation costs remaining - As of September 30, 2023, approximately **2.9 million employee stock options** had vested, with a total unrecognized compensation of **$30,994,529** expected to be recognized over **1.85 years**[156](index=156&type=chunk)[160](index=160&type=chunk) Stock Option Activity (Nine Months Ended September 30, 2023) | Stock Option Activity | Options Shares | Weighted Average Exercise Price | | :-------------------- | :------------- | :------------------------------ | | Balance as of Dec 31, 2022 | 11,571,308 | $7.11 | | Granted/vested | 1,115,874 | $8.92 | | Exercised | (493,984) | $3.63 | | Cancelled | (551,665) | $7.66 | | Balance as of Sep 30, 2023 | 11,641,533 | $7.42 | - For RSUs, the total grant-date fair value granted during the nine months ended September 30, 2023, was **$2,130,040**, with unrecognized compensation cost for non-vested RSUs of **$3,290,875** expected to be recognized over **1.3 years**[161](index=161&type=chunk)[162](index=162&type=chunk) [14. Leases](index=40&type=section&id=14.%20Leases) The company has both operating and finance leases for office space, dispatch stations, and transportation equipment, with increased cash payments for both lease types in 2023 compared to 2022 Operating Lease Costs (in USD) | Component of Total Lease Cost | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Operating lease expense | 697,050 | 626,188 | 2,319,282 | 1,517,541 | | Short-term lease expense | 452,538 | 334,619 | 1,156,886 | 863,316 | | **Total lease cost - operating leases** | **1,149,588** | **960,807** | **3,476,168** | **2,380,857** | Finance Lease Payments (in USD) | Component of Total Lease Cost | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :---------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Finance lease payment | 782,808 | 672,975 | 2,293,330 | 2,146,857 | | Short-term lease payment | — | — | — | — | | **Total lease payments** | **782,808** | **672,975** | **2,293,330** | **2,146,857** | - As of September 30, 2023, the weighted average remaining lease term for operating leases was **4.36 years** with a discount rate of **5.76%**, and for finance leases, it was **3.58 years** with a discount rate of **5.96%**[170](index=170&type=chunk)[180](index=180&type=chunk) [15. Other Income (Expense)](index=43&type=section&id=15.%20Other%20Income%20%28Expense%29) Other income (expense) for the three and nine months ended September 30, 2023, showed a significant shift compared to the prior year, primarily due to the absence of warrant liability remeasurement losses/gains and the recognition of a contingent liability change in fair value Other Income (Expense) (in USD) | Other Income (Expense) (in USD) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Interest income (expense), net | 346,376 | 334,221 | 1,677,420 | 296,891 | | (Loss) gain on remeasurement of warrant liabilities | — | (1,831,947) | — | 1,137,070 | | Change in fair value of contingent liability | 159,974 | — | 159,974 | — | | (Loss) gain on equity method investments | (95,503) | 93,371 | (301,362) | 99,840 | | Gain on remeasurement of finance leases | 4,834 | — | 4,834 | 1,388,273 | | (Loss) gain on disposal of fixed assets | (9,983) | 42,667 | (163,452) | 42,667 | | ABC litigation | — | — | (1,000,000) | — | | Other income | 43,353 | 30,900 | 338,175 | 42,288 | | **Total other income (expense)** | **449,051** | **(1,330,788)** | **715,589** | **3,007,029** | [16. Related Party Transactions](index=45&type=section&id=16.%20Related%20Party%20Transactions) The company engages in transactions with related parties, specifically legal services provided by a firm owned by its General Counsel and Secretary, with payments made in both 2023 and 2022 - The Company made legal payments to Ely D. Tendler Strategic & Legal Services PLLC, a related party, totaling **$204,700** for the three months ended September 30, 2023 (vs. $261,185 in 2022) and **$674,970** for the nine months ended September 30, 2023 (vs. $704,593 in 2022)[189](index=189&type=chunk) [17. Income Taxes](index=45&type=section&id=17.%20Income%20Taxes) The company recorded an increased income tax provision for both the three and nine months ended September 30, 2023, compared to the prior year, primarily due to higher pretax income - Income tax provision for the three months ended September 30, 2023, was **$(4,526,767)** compared to $(401,916) in 2022[191](index=191&type=chunk) - Income tax provision for the nine months ended September 30, 2023, was **$(2,041,843)** compared to $(1,163,755) in 2022[191](index=191&type=chunk) [18. 401(k) Plan](index=45&type=section&id=18.%20401%28k%29%20Plan) The company established a 401(k) plan in January 2022 for eligible U.S. employees but has not made any employer contributions as of September 30, 2023 - A 401(k) plan was established in January 2022 for U.S. employees, but no employer contributions were made as of September 30, 2023[192](index=192&type=chunk) [19. Legal Proceedings](index=45&type=section&id=19.%20Legal%20Proceedings) The company is involved in legal actions in the normal course of business and accrues for probable and estimable losses, including a class-action lawsuit settled for **$1 million** in July 2023 - A class-action lawsuit (Stephanie Zamora, Jascha Dlugatch, et al. v. Ambulnz Health, LLC, et al.) alleging wage and hour violations was settled for **$1,000,000**, which was paid in July 2023[194](index=194&type=chunk)[195](index=195&type=chunk) [20. Risk and Uncertainties](index=46&type=section&id=20.%20Risk%20and%20Uncertainties) The COVID-19 pandemic had a mixed impact on the company, initially causing declines in non-emergency transportation but boosting Mobile Health Services, with anticipated continued demand driven by secular factors - COVID-19 initially caused a decline in non-emergency medical transportation but led to incremental transportation revenue from FEMA projects and the formation of RRT for COVID-19 testing and vaccinations[197](index=197&type=chunk)[198](index=198&type=chunk) - RRT expanded its services beyond COVID-19 testing to a wide variety of tests, vaccinations, and other procedures as COVID-19 testing activity slowed[198](index=198&type=chunk) - The company's business plan assumes increased demand for Mobile Health Services, driven by both pandemic acceleration and long-term secular factors like patient preference for out-of-hospital treatments[199](index=199&type=chunk) [21. Subsequent Events](index=46&type=section&id=21.%20Subsequent%20Events) Subsequent events include the resignation of former CEO Anthony Capone, the appointment of Lee Bienstock as new CEO, a **$25 million** draw on the revolving credit facility, and a new class-action lawsuit alleging federal securities law violations - Anthony Capone resigned as CEO on September 15, 2023, and entered a transition services agreement to serve as a consultant until March 15, 2024[200](index=200&type=chunk)[201](index=201&type=chunk) - On October 19, 2023, the Company drew **$25,000,000** under its Revolving Facility[202](index=202&type=chunk) - On October 27, 2023, a putative class action complaint was filed against the Company and its officers for alleged violations of federal securities laws, which the Company intends to vigorously defend[204](index=204&type=chunk)[206](index=206&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, operations, revenue, expenses, liquidity, capital resources, and critical accounting estimates, highlighting revenue growth and cash flow shifts [Cautionary Note Regarding Forward-Looking Statements](index=48&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) - The report contains forward-looking statements subject to substantial risks and uncertainties, which may cause actual results to differ materially from expectations[209](index=209&type=chunk) - Investors are cautioned not to place undue reliance on these statements, as the company operates in a competitive and rapidly changing environment, and new risks may emerge[210](index=210&type=chunk)[211](index=211&type=chunk) [Overview](index=49&type=section&id=Overview) - DocGo Inc. is a healthcare transportation and mobile services company operating in the U.S. and U.K., with revenue from Mobile Health Services and Transportation Services[213](index=213&type=chunk)[214](index=214&type=chunk) - The company began reporting in three operating segments in Q1 2023, adding a Corporate segment for shared services and leadership costs[214](index=214&type=chunk) Net Income (in USD) | Period | Net Income (2023) | Net Income (2022) | | :------------------------------------ | :---------------- | :---------------- | | Three months ended September 30 | 4,600,000 | 2,500,000 | | Nine months ended September 30 | 2,100,000 | 23,600,000 | [Factors Affecting Our Results of Operations](index=50&type=section&id=Factors%20Affecting%20Our%20Results%20of%20Operations) - Key factors influencing results include operating licenses, acquisition strategy, market conditions for healthcare transportation and mobile health, competitive environment, macroeconomic and geopolitical conditions, labor costs, and supplier production schedules[220](index=220&type=chunk) - The company completed **two acquisitions for $32.8 million** in the nine months ended September 30, 2023, and **three acquisitions for $34.1 million** in the same period of 2022[222](index=222&type=chunk)[223](index=223&type=chunk) - Inflation has increased expenses (wages, fuel, medical supplies), compressing gross profit margins as the company is generally unable to pass these higher costs to customers in the short term[231](index=231&type=chunk) [Components of Results of Operations](index=51&type=section&id=Components%20of%20Results%20of%20Operations) - Revenue is generated from Mobile Health Services and Transportation Services segments[236](index=236&type=chunk) - Cost of revenues includes wages, vehicle insurance, maintenance, fuel, laboratory fees, facility rent, medical supplies, and subcontractors[237](index=237&type=chunk) - Operating expenses comprise General and Administrative, Depreciation and Amortization, Legal and Regulatory, Technology and Development, and Sales, Advertising and Marketing expenses[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk)[242](index=242&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) [Comparison of the Three Months Ended September 30, 2023 and 2022](index=53&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20September%2030%2C%202023%20and%202022) DocGo Inc. saw substantial revenue growth in Mobile Health and Transportation Services for Q3 2023, increasing net income despite faster cost of revenue growth and higher operating expenses Consolidated Financial Performance (Three Months Ended September 30) | Metric (in Millions USD) | 2023 Actual Results | 2023 % of Total Revenue | 2022 Actual Results | 2022 % of Total Revenue | Change $ | Change % | | :------------------------------------ | :------------------ | :---------------------- | :------------------ | :---------------------- | :------- | :------- | | Revenues, net | 186.6 | 100.0 % | 104.3 | 100.0 % | 82.3 | 78.9 % | | Cost of revenues | 131.5 | 70.5 % | 71.3 | 68.3 % | 60.2 | 84.4 % | | Income from operations | 8.8 | 4.7 % | 4.2 | 4.0 % | 4.6 | | | Net income | 4.7 | 2.5 % | 2.5 | 2.4 % | 2.1 | | | Net income attributable to stockholders | 4.8 | 2.6 % | 3.2 | 3.0 % | 1.6 | | - Mobile Health Services revenue increased by **$62.7 million (81.8%) to $139.3 million**, driven by expansion in government customer sector, increased customer base, geographic reach, contract extensions, and broader services[246](index=246&type=chunk)[248](index=248&type=chunk) - Transportation Services revenue increased by **$19.5 million (70.6%) to $47.2 million**, due to **9.4% higher trip volumes (64,321 trips)** and an increase in average trip price from **$374 to $409**, benefiting from higher-priced transports and an **8.7% increase in Medicare reimbursement**[249](index=249&type=chunk) - Total cost of revenue increased by **84.4% (to 70.5% of revenue)**, primarily due to a **$6.3 million increase in compensation**, **$35.7 million in subcontracted labor**, and **$12.3 million in medical supplies**[250](index=250&type=chunk)[251](index=251&type=chunk) [Comparison of the Nine Months Ended September 30, 2023 and 2022](index=58&type=section&id=Comparison%20of%20the%20Nine%20Months%20Ended%20September%2030%2C%202023%20and%202022) DocGo Inc. achieved significant revenue growth in the nine months ended September 30, 2023, driven by Transportation Services despite declining COVID-19 testing revenue, but increased operating expenses led to decreased operating income Consolidated Financial Performance (Nine Months Ended September 30) | Metric (in Millions USD) | 2023 Actual Results | 2023 % of Total Revenue | 2022 Actual Results | 2022 % of Total Revenue | Change $ | Change % | | :------------------------------------ | :------------------ | :---------------------- | :------------------ | :---------------------- | :------- | :------- | | Revenues, net | 425.0 | 100.0 % | 331.7 | 100.0 % | 93.3 | 28.1 % | | Cost of revenues | 296.3 | 69.7 % | 219.4 | 66.1 % | 76.9 | 35.1 % | | Income from operations | 3.4 | 0.8 % | 21.8 | 6.6 % | (18.4) | | | Net income | 2.1 | 0.5 % | 23.6 | 7.1 % | (21.5) | | | Net income attributable to stockholders | (0.7) | (0.2)% | 26.5 | 8.0 % | (27.2) | | - Mobile Health Services revenue increased by **$38.3 million (15.1%) to $292.4 million**, despite a significant decline in COVID-19 related mass testing revenue (from **$74.0 million in 2022 to $3.0 million in 2023**)[269](index=269&type=chunk) - Transportation Services revenue increased by **$55.0 million (70.9%) to $132.7 million**, driven by a **20% increase in trip volumes (185,404 trips)** and an average trip price increase from **$362 to $405**[270](index=270&type=chunk) - Total operating expenses increased by **$34.4 million (38.4%) to $125.3 million**, primarily due to a **$21.3 million increase in total compensation** (including stock-based compensation), **$4.7 million in depreciation and amortization**, and **$3.5 million in IT infrastructure**[275](index=275&type=chunk)[276](index=276&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) - The company's liquidity sources include existing cash, operating cash flows, and a **$90 million** revolving credit facility (with an option to increase by **$50 million**), which was drawn for **$25 million** in October 2023[289](index=289&type=chunk)[290](index=290&type=chunk) - Working capital decreased by **$17.0 million (10.0%) to $154.0 million** as of September 30, 2023, primarily due to a **$104.4 million decrease in available cash**, offset by increased accounts receivable and higher current liabilities[292](index=292&type=chunk) Cash Flow Summary (Nine Months Ended September 30) | Cash Flow Activity (in Millions USD) | 2023 | 2022 | Change $ | Change % | | :------------------------------------ | :--- | :--- | :------- | :------- | | Net cash (used in) provided by operating activities | (58.3) | 37.6 | (95.9) | (255.1 %) | | Net cash (used in) investing activities | (26.9) | (37.8) | 10.9 | 28.8 % | | Net cash (used in) provided by financing activities | (11.9) | 0.7 | (12.6) | (1794.1 %) | | Net (decrease) increase in cash | (96.9) | 0.2 | (97.1) | (48526.6 %) | - Operating activities used **$58.3 million cash** in 2023 (vs. provided $37.6 million in 2022), mainly due to a **$103.5 million increase in accounts receivable** from business growth with municipalities and a **$12.6 million decrease in accounts payable**[294](index=294&type=chunk) [Critical Accounting Estimates](index=64&type=section&id=Critical%20Accounting%20Estimates) - The financial statements are prepared in conformity with U.S. GAAP, consolidating DocGo Inc. and its subsidiaries, including the variable interest entity MD1[304](index=304&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) - Business combinations are accounted for using the acquisition method, with assets and liabilities recorded at fair value, and goodwill is tested for impairment annually or more frequently if indicators suggest impairment[310](index=310&type=chunk)[311](index=311&type=chunk)[313](index=313&type=chunk) - Revenue recognition follows ASC 606, identifying performance obligations and recognizing revenue as benefits are transferred to customers, net of estimated contractual allowances[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily interest rate risk, foreign exchange risk, and concentrations of credit risk, with fixed-rate notes limiting interest rate volatility and foreign exchange risk limited to U.K. operations - The company's principal market risks are interest rate volatility (limited due to fixed-rate notes payable), foreign exchange risk (limited to U.K. operations), and concentrations of credit risk[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - Foreign exchange loss amounted to **$(582,471)** in Q3 2023, compared to a gain of $248,283 in Q3 2022[322](index=322&type=chunk) - Significant customer concentration exists, with **two customers accounting for approximately 33% and 32% of sales** and **36% and 28% of net accounts receivable**, respectively, for the three months ended September 30, 2023[325](index=325&type=chunk) [Item 4. Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023, with no material changes in internal control over financial reporting during the quarter - Management concluded that disclosure controls and procedures were effective as of September 30, 2023[327](index=327&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2023[328](index=328&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) This section reiterates information about legal proceedings, including a new putative class action complaint filed on October 27, 2023, alleging federal securities law violations against the company and its officers - A putative class action complaint was filed on October 27, 2023, in the U.S. District Court for the Southern District of New York, alleging federal securities law violations against the Company, its Chairman, current and former CEOs, and CFOs[333](index=333&type=chunk) - The company disputes the allegations and intends to defend itself vigorously, noting that it cannot reasonably estimate the potential range of loss at this early stage[333](index=333&type=chunk) [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) As of the filing date, there have been no material changes to the risk factors previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to the risk factors disclosed in the 2022 Form 10-K have occurred as of the date of this Quarterly Report on Form 10-Q[335](index=335&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) This item reports no unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities for the period - No unregistered sales of equity securities, use of proceeds, or issuer purchases of equity securities occurred during the period[336](index=336&type=chunk) [Item 3. Defaults Upon Senior Securities](index=68&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item indicates that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities during the reporting period[337](index=337&type=chunk) [Item 4. Mine Safety Disclosures](index=68&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[338](index=338&type=chunk) [Item 5. Other Information](index=68&type=section&id=Item%205.%20Other%20Information) This section details recent corporate governance updates, including amendments to the company's bylaws and the executive employment agreement for the new CEO, Lee Bienstock, and confirms no trading plans were adopted, modified, or terminated by directors or officers in Q3 2023 - The Board of Directors approved and adopted an amendment and restatement of the company's bylaws on November 2, 2023, to align with new SEC rules and Delaware General Corporation Law changes[339](index=339&type=chunk) - Lee Bienstock was appointed CEO on September 15, 2023, with an Executive Employment Agreement providing an annual base salary of **$785,000**, a target annual bonus of **100% of base salary**, and significant equity grants[343](index=343&type=chunk)[344](index=344&type=chunk) - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q3 2023, and the company did not adopt any Rule 10b5-1 trading arrangement[349](index=349&type=chunk) [Item 6. Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including corporate governance documents, executive agreements, certifications, and XBRL data files - Key exhibits include the Amended and Restated Bylaws, the Separation and Transition Services Agreement with Anthony Capone, and the Executive Employment Agreement with Lee Bienstock[351](index=351&type=chunk) - Certifications from the Principal Executive Officer and Principal Financial Officer pursuant to Exchange Act rules and Sarbanes-Oxley Act are also included[351](index=351&type=chunk) [Signatures](index=72&type=section&id=Signatures) The report is duly signed on behalf of DocGo Inc. by its Chief Executive Officer, Lee Bienstock, and Chief Financial Officer and Treasurer, Norman Rosenberg, on November 6, 2023 - The report was signed by Lee Bienstock, Chief Executive Officer, and Norman Rosenberg, Chief Financial Officer and Treasurer, on November 6, 2023[357](index=357&type=chunk)

DocGo Inc. (NASDAQ:DCGO) Q2 2023 Earnings Conference Call August 7, 2023 5:00 PM ET Corporate Participants Mike Cole - Director-Investor Relations Anthony Capone - Chief Executive Officer Lee Bienstock - President and Chief Operating Officer Norman Rosenberg - Chief Financial Officer Conference Call Participants Richard Close - Canaccord Genuity Sarah James - Cantor Fitzgerald Matt Shea - Needham & Co Mike Latimore - Northland Capital Markets David Grossman - Stifel Kieran Ryan - Deutsche Bank Operator Good ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-39618 DocGo Inc. (Exact Name of Registrant as Specified in Its Charter) | Delaware | 85-2515483 | | --- | --- ...

Financial Data and Key Metrics Changes - Total revenue for Q1 2023 was $113 million, a decline of 4% year-over-year, but a 40% increase when excluding mass COVID testing revenues [5][14] - The company recorded a net loss of $3.9 million in Q1 2023, compared to a net income of $9.4 million in Q1 2022, largely due to increased non-cash stock compensation and legal costs [15][39] - Adjusted EBITDA for Q1 2023 was $5.6 million, down from $13.6 million in Q1 2022 [62] Business Line Data and Key Metrics Changes - Medical Transportation revenue increased significantly to $40.1 million in Q1 2023, representing a 44% increase from $27.8 million in Q1 2022 [37] - Mobile Health revenue for Q1 2023 was $72.9 million, down from $90.1 million in Q1 2022, but increased by 38% when excluding mass COVID testing revenue [61] - Gross margins for the Mobile Health segment were 27.7% in Q1 2023, down from 37.3% in Q1 2022, impacted by startup costs for new projects [38] Market Data and Key Metrics Changes - The current backlog totals approximately $205 million, up from $180 million, driven by new municipal Mobile Health contracts [29][19] - The company has seen a doubling of open RFPs, with a total contract value of approximately $1.5 billion, indicating strong demand for mobile health services [28][70] Company Strategy and Development Direction - The company is transitioning from a mass COVID testing-centric business to a broader mobile health service model, focusing on chronic care management and remote patient monitoring [6][10] - A partnership with Fresenius Medical Corporation aims to enhance remote patient monitoring and chronic care management services, targeting a significant patient population [7][10] - The company anticipates providing RPM and CCM services to over 50,000 patients by the end of 2023, with a focus on cardiology and nephrology [10][76] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving revenue guidance of $500 million to $510 million for 2023, with expected adjusted EBITDA of $45 million to $50 million [5][19] - The company is experiencing a rebound in margins following a challenging start to the year, with expectations for improved gross margins in Q2 2023 [34][35] - Management noted that the macro labor market is becoming more favorable, which should support growth and margin objectives [35] Other Important Information - The company is planning an Investor Day on June 20 at the NASDAQ market site in New York [20] - Non-cash stock compensation expense was approximately $8.5 million in Q1 2023, significantly higher than the previous year [39] Q&A Session Summary Question: Can you elaborate on the increase in RFP value? - The number of outstanding RFPs has doubled, with total contract value increasing from $1.1 billion to $1.5 billion, including both federal and municipal deals [43] Question: How do you plan to reach the goal of 50,000 patients in RPM? - The majority of RPM and CCM services will come from existing cardiology practices and the newly acquired CRMS, which focuses on cardiac patients [47] Question: What is the impact of startup costs on margins? - The startup costs were higher than expected due to an accelerated launch timeline, impacting margins but expected to normalize moving forward [93]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents DocGo Inc.'s unaudited condensed consolidated financial statements for Q1 2023 and 2022, encompassing balance sheets, statements of operations, equity changes, cash flows, and detailed notes on accounting policies, operations, and acquisitions [Unaudited Condensed Consolidated Balance Sheets](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) This table presents DocGo Inc.'s financial position, detailing assets, liabilities, and equity as of March 31, 2023, and December 31, 2022 | Metric | March 31, 2023 (Unaudited, $) | December 31, 2022 (Audited, $) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $120,056,897 | $157,335,323 | | Accounts receivable, net | $131,599,567 | $102,995,397 | | Total current assets | $258,393,842 | $271,080,905 | | Total assets | $407,545,176 | $393,277,628 | | Total current liabilities | $108,974,683 | $100,158,490 | | Total liabilities | $123,624,152 | $114,350,237 | | Total stockholders' equity | $283,921,024 | $278,927,391 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20%28Loss%29%20Income) This table outlines DocGo Inc.'s financial performance, including revenue, expenses, and net income (loss) for the three months ended March 31, 2023, and 2022 | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :-------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue, net | $113,002,703 | $117,891,552 | | Total expenses | $119,905,290 | $107,796,987 | | (Loss) Income from operations | $(6,902,587) | $10,094,565 | | Net (loss) income | $(3,918,790) | $9,372,437 | | Net (loss) income attributable to stockholders of DocGo Inc. and Subsidiaries | $(3,465,670) | $10,629,694 | | Net (loss) income per share - Basic | $(0.03) | $0.11 | | Net (loss) income per share - Diluted | $(0.03) | $0.09 | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section details the changes in DocGo Inc.'s stockholders' equity, including net loss, additional paid-in capital, and foreign currency adjustments for the three months ended March 31, 2023 - For the three months ended March 31, 2023, DocGo Inc.'s total stockholders' equity increased from **$278,927,391** at December 31, 2022, to **$283,921,024** Key changes included an increase in additional paid-in capital by **$8,598,429**, a net loss attributable to stockholders of **$(3,465,670)**, and a foreign currency translation adjustment of **$243,658**[18](index=18&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This table summarizes DocGo Inc.'s cash inflows and outflows from operating, investing, and financing activities for the three months ended March 31, 2023, and 2022 | Cash Flow Activity | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :----------------- | :-------------------------------- | :-------------------------------- | | Operating Activities | $(23,117,951) | $18,264,682 | | Investing Activities | $(1,689,495) | $(1,137,040) | | Financing Activities | $(11,951,059) | $2,496,798 | | Net (decrease) increase in cash and restricted cash | $(36,590,356) | $19,618,577 | | Cash and restricted cash at end of period | $127,518,718 | $198,724,307 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed disclosures on DocGo's accounting policies, business operations, acquisitions, financial instruments, and other significant financial events for the reporting period [1. Description of Organization and Business Operations](index=12&type=section&id=1.%20Description%20of%20Organization%20and%20Business%20Operations) DocGo Inc. is a healthcare transportation and mobile health services company operating in the US and UK, utilizing proprietary technology. The company was formed through a reverse recapitalization in November 2021, with Ambulnz, Inc. being the accounting acquirer - DocGo Inc. provides healthcare transportation and mobile health services in major metropolitan cities in the United States and the United Kingdom, leveraging proprietary dispatch and communication technology[29](index=29&type=chunk) - The company's formation involved a business combination in November 2021, where Motion Acquisition Corp. merged with Ambulnz, Inc., with Ambulnz, Inc. treated as the accounting acquirer in a reverse recapitalization[26](index=26&type=chunk)[35](index=35&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section outlines DocGo's key accounting policies, including the basis of presentation under U.S. GAAP, principles of consolidation (including a Variable Interest Entity, MD1 Medical Care P.C.), foreign currency translation, use of estimates, self-insurance reserves, and fair value measurements. It also details policies for revenue recognition, stock-based compensation, earnings per share, equity method investments, and leases, and notes the company's status as an 'emerging growth company' - DocGo consolidates MD1 Medical Care P.C. as a Variable Interest Entity (VIE) because it has the power to direct MD1's activities and the obligation to absorb its losses, despite not having direct equity ownership[37](index=37&type=chunk) - The company's revenue is primarily derived from Transportation Services and Mobile Health Services, recognized when performance obligations are satisfied, typically based on fixed or usage-based fees[84](index=84&type=chunk)[85](index=85&type=chunk) Revenue Disaggregation by Geography and Service Line (Three Months Ended March 31) | Revenue Breakdown | 2023 ($) | 2022 ($) | | :---------------- | :------------ | :------------ | | **Primary Geographical Markets** | | | | United States | $98,909,521 | $115,053,431 | | United Kingdom | $14,093,182 | $2,838,121 | | **Major Segments/Service Lines** | | | | Transportation Services | $40,055,946 | $27,812,510 | | Mobile Health | $72,946,757 | $90,079,042 | | **Total revenue** | $113,002,703 | $117,891,552 | - DocGo is an 'emerging growth company' and has elected not to opt out of the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[48](index=48&type=chunk)[50](index=50&type=chunk) - The Company had one customer that accounted for approximately **46% of sales** and **62% of net accounts receivable** for the three months ended March 31, 2023, indicating a significant customer concentration[45](index=45&type=chunk) [3. Property and Equipment, net](index=24&type=section&id=3.%20Property%20and%20Equipment%2C%20net) DocGo's net property and equipment increased to $21.7 million as of March 31, 2023, from $21.3 million at December 31, 2022, with transportation equipment being the largest component. Depreciation expenses significantly increased year-over-year | Asset Category | March 31, 2023 ($) | December 31, 2022 ($) | | :--------------- | :------------- | :---------------- | | Transportation equipment | $21,907,460 | $20,773,862 | | Medical equipment | $5,835,273 | $5,177,520 | | Total property and equipment, net | $21,729,460 | $21,258,175 | | Depreciation expenses (3 months ended March 31) | $1,482,610 | $711,878 | [4. Acquisition of Businesses and Asset Acquisitions](index=24&type=section&id=4.%20Acquisition%20of%20Businesses%20and%20Asset%20Acquisitions) DocGo completed several acquisitions in 2022 and early 2023, including Government Medical Services, Exceptional Medical Transportation, Ryan Brothers Fort Atkinson, Community Ambulance Services, Location Medical Services, and Cardiac RMS. These acquisitions expanded its medical transportation and mobile health services, with Cardiac RMS (acquired March 31, 2023) marking an entry into cardiac remote monitoring - On March 31, 2023, DocGo acquired **51% of Cardiac RMS, LLC (CRMS)** for **$10 million** in cash and stock, with an additional **$15.8 million** probable contingent consideration, expanding into cardiac implantable electronic device remote monitoring and virtual care management[113](index=113&type=chunk) - In 2022, DocGo acquired Government Medical Services, Exceptional Medical Transportation, Ryan Brothers Fort Atkinson, Community Ambulance Service Ltd (UK), and Location Medical Services, LLC, totaling **$94.97 million** in consideration, primarily to expand medical transportation services and market presence[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk) - The acquisition of Community Ambulance Service Ltd resulted in a gain on bargain purchase of **$1,593,612** due to acquired net assets exceeding the purchase price[109](index=109&type=chunk)[115](index=115&type=chunk) [5. ABC Transaction and Held for Sale](index=28&type=section&id=5.%20ABC%20Transaction%20and%20Held%20for%20Sale) Ambulnz Health, LLC (Health) commenced an assignment for the benefit of creditors (ABC) on February 3, 2023, a state-governed liquidation process. As of December 31, 2022, Health's assets and liabilities were classified as held for sale, reflecting the company's intention to liquidate - Ambulnz Health, LLC (Health) initiated an assignment for the benefit of creditors (ABC) on February 3, 2023, a state-law governed liquidation process, leading to the termination of employees and transfer of assets to an assignee[117](index=117&type=chunk)[118](index=118&type=chunk) - As of December 31, 2022, Health's assets and liabilities, including **$4.48 million** in assets and **$4.48 million** in liabilities, were classified as held for sale at the lower of carrying value or fair value less costs to sell[119](index=119&type=chunk)[122](index=122&type=chunk) [6. Goodwill](index=29&type=section&id=6.%20Goodwill) DocGo recognized a non-cash goodwill impairment charge of $2.9 million for its Health reporting unit in 2022 due to the ABC transaction. Despite this, the carrying value of goodwill increased to $47.7 million by March 31, 2023, primarily from new acquisitions - A non-cash goodwill impairment charge of **$2,921,958** was recognized for the Health reporting unit in 2022, primarily due to the ABC filing, which had no impact on cash flow or liquidity[123](index=123&type=chunk)[124](index=124&type=chunk) Goodwill Carrying Value Changes | Metric | Amount ($) | | :-------------------------- | :------------- | | Balance as of December 31, 2022 | $38,900,413 | | Goodwill acquired during the period | $8,642,190 | | CTA | $126,051 | | Balance as of March 31, 2023 | $47,668,654 | [7. Intangibles](index=31&type=section&id=7.%20Intangibles) DocGo's net intangible assets significantly increased to $38.9 million as of March 31, 2023, from $23.0 million at December 31, 2022, primarily driven by additions to customer relationships and operating licenses from acquisitions. Amortization expenses also rose year-over-year | Intangible Asset Category | March 31, 2023 (Net Carrying Amount, $) | December 31, 2022 (Net Carrying Amount, $) | | :------------------------ | :----------------------------------- | :------------------------------------ | | Operating licenses | $9,399,004 | $8,799,004 | | Customer relationship | $27,322,949 | $11,803,653 | | Total intangibles, net | $38,939,054 | $22,969,246 | | Amortization expenses (3 months ended March 31) | $1,365,636 | $633,363 | - The estimated future amortization expense for definite life intangible assets is projected to be **$3.1 million** for the remainder of 2023 and **$3.8 million** in 2024[130](index=130&type=chunk) [8. Accrued Liabilities](index=33&type=section&id=8.%20Accrued%20Liabilities) DocGo's total accrued liabilities decreased slightly to $30.5 million as of March 31, 2023, from $31.6 million at December 31, 2022. Accrued subcontractors and accrued general expenses remain the largest components | Accrued Liability Category | March 31, 2023 ($) | December 31, 2022 ($) | | :------------------------- | :------------- | :---------------- | | Accrued subcontractors | $8,889,201 | $8,101,150 | | Accrued general expenses | $7,080,279 | $11,436,462 | | Accrued workers compensation and insurance liabilities | $6,564,201 | $3,766,469 | | Total accrued liabilities | $30,544,082 | $31,573,031 | [9. Line of Credit](index=33&type=section&id=9.%20Line%20of%20Credit) DocGo entered into a new $90 million revolving loan and security agreement in November 2022, maturing in November 2027, with an option to increase by $50 million. This facility replaced a previous $12 million line of credit that was repaid in December 2022. As of March 31, 2023, no amounts were outstanding under the new facility - On November 1, 2022, DocGo secured a new revolving loan and security agreement with a maximum advance of **$90 million**, maturing on November 1, 2027, and an option to increase by **$50 million**[135](index=135&type=chunk) - The new revolving facility is secured by a first-priority lien on substantially all of the Company's present and future personal and intangible assets and is subject to financial covenants[135](index=135&type=chunk) - As of March 31, 2023, DocGo had not made any draws under the new **$90 million** revolving facility, and no amounts were outstanding[135](index=135&type=chunk) [10. Notes Payable](index=34&type=section&id=10.%20Notes%20Payable) DocGo's total notes payable remained stable at approximately $1.9 million as of March 31, 2023, primarily consisting of equipment and financing loans with interest rates between 2.5% and 8%, maturing through 2027. The current portion of notes payable was $0.65 million | Metric | March 31, 2023 ($) | December 31, 2022 ($) | | :-------------------------------- | :------------- | :---------------- | | Equipment and financing loans payable | $1,922,223 | $1,901,514 | | Total notes payable | $1,922,223 | $1,901,514 | | Less: current portion | $(649,808) | $(664,913) | | Total non-current portion | $1,272,415 | $1,236,601 | - Future minimum annual maturities of notes payable are **$425,309** for the remainder of 2023, **$478,492** in 2024, and **$463,573** in 2025[139](index=139&type=chunk) [11. Business Segment Information](index=35&type=section&id=11.%20Business%20Segment%20Information) Beginning Q1 2023, DocGo reports in three segments: Transportation Services, Mobile Health Services, and Corporate. While Mobile Health Services generated higher revenue in Q1 2022, Transportation Services saw significant growth in Q1 2023. The Corporate segment, introduced for shared services, reported a substantial operating loss due to increased infrastructure and stock compensation costs - DocGo now reports in three operating segments: Transportation Services, Mobile Health Services, and Corporate, with the Corporate segment introduced in Q1 2023 to analyze shared services and personnel[141](index=141&type=chunk) Operating Results by Business Segment (Three Months Ended March 31) | Metric | Transportation Services (2023, $) | Mobile Health Services (2023, $) | Corporate (2023, $) | Total (2023, $) | Transportation Services (2022, $) | Mobile Health Services (2022, $) | Corporate (2022, $) | Total (2022, $) | | :-------------------------- | :----------------------------- | :---------------------------- | :--------------- | :----------- | :----------------------------- | :---------------------------- | :--------------- | :----------- | | Revenues | $40,055,946 | $72,946,757 | $- | $113,002,703 | $27,812,510 | $90,079,042 | $- | $117,891,552 | | Income (loss) from operations | $1,083,040 | $13,188,159 | $(21,173,786) | $(6,902,587) | $(2,538,760) | $23,402,298 | $(10,768,973) | $10,094,565 | | Total assets | $118,998,556 | $152,352,877 | $136,193,743 | $407,545,176 | $73,244,007 | $48,736,456 | $203,215,841 | $325,196,304 | - The Corporate segment's operating loss significantly increased from **$(10.8) million** in Q1 2022 to **$(21.2) million** in Q1 2023, primarily due to higher stock compensation and investments in corporate infrastructure[143](index=143&type=chunk) [12. Equity](index=35&type=section&id=12.%20Equity) DocGo's share repurchase program, authorized in May 2022 for up to $40 million, saw no repurchases in Q1 2023. In 2022, the company repurchased 536,839 shares for $3.7 million, which were subsequently cancelled - DocGo's share repurchase program, authorized for up to **$40 million**, resulted in no share repurchases during the first quarter of 2023[145](index=145&type=chunk) - In 2022, the company repurchased **536,839 shares** of common stock for **$3,731,712**, which were subsequently cancelled[145](index=145&type=chunk) [13. Stock Based Compensation](index=37&type=section&id=13.%20Stock%20Based%20Compensation) As of March 31, 2023, DocGo had 11.2 million stock options outstanding with a weighted-average exercise price of $7.15, and 3.2 million options vested. Unrecognized compensation for stock options was $32.1 million, expected to be recognized over approximately 2 years. For RSUs, 225,579 units were outstanding, with $1.9 million in unrecognized compensation cost Stock Option Activity (Three Months Ended March 31, 2023) | Metric | Options Shares | Weighted Average Exercise Price ($) | | :-------------------------- | :------------- | :------------------------------ | | Balance as of Dec 31, 2022 | 11,571,308 | $7.11 | | Exercised during the year | (96,101) | $2.60 | | Cancelled during the year | (267,539) | $7.74 | | Balance as of March 31, 2023 | 11,207,668 | $7.15 | | Options vested and exercisable at March 31, 2023 | 3,153,550 | $6.12 | - Total unrecognized compensation related to unvested stock option awards was **$32,118,556** as of March 31, 2023, expected to be recognized over a weighted-average period of approximately **2 years**[150](index=150&type=chunk) - For Restricted Stock Units (RSUs), **225,579 units** were non-vested as of March 31, 2023, with **$1,934,998** in unrecognized compensation cost expected to be recognized over approximately **1.1 years**[153](index=153&type=chunk)[154](index=154&type=chunk) [14. Leases](index=38&type=section&id=14.%20Leases) DocGo's operating lease ROU assets increased to $9.4 million and liabilities to $9.7 million as of March 31, 2023, with a weighted average remaining lease term of 4.86 years. Finance lease ROU assets were $9.2 million and liabilities $8.8 million, with a weighted average remaining lease term of 3.66 years. Cash payments for operating leases increased significantly year-over-year Operating Lease Position (March 31, 2023) | Metric | March 31, 2023 ($) | December 31, 2022 ($) | | :------------------------ | :------------- | :---------------- | | Lease right-of-use assets | $9,375,132 | $9,074,277 | | Total lease liability | $9,668,609 | $9,366,006 | | Weighted average remaining lease term | 4.86 years | | | Weighted average discount rate | 5.99% | | | Operating lease expense (3 months ended March 31) | $756,245 | $462,625 | Finance Lease Position (March 31, 2023) | Metric | March 31, 2023 ($) | December 31, 2022 ($) | | :------------------------ | :------------- | :---------------- | | Lease right-of-use assets | $9,170,429 | $9,039,663 | | Total lease liability | $8,834,857 | $8,646,803 | | Weighted average remaining lease term | 3.66 years | | | Weighted average discount rate | 5.95% | | | Finance lease payment (3 months ended March 31) | $744,030 | $622,575 | - In June 2022, the Company recognized a **$1.4 million** gain on lease remeasurement due to a reassessment of finance lease estimates for vehicle mileage and residual value, leading to a decision to purchase vehicles at lease end[167](index=167&type=chunk) [15. Other Income (Expenses)](index=41&type=section&id=15.%20Other%20Income%20%28Expenses%29) DocGo reported total other income of $853,927 for the three months ended March 31, 2023, a significant improvement from a loss of $(281,949) in the prior year. This was primarily driven by a substantial increase in net interest income | Other Income (Expenses) Category | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :------------------------------- | :-------------------------------- | :-------------------------------- | | Interest income (expense), net | $809,172 | $(135,606) | | Loss on remeasurement of warrant liabilities | $- | $(58,749) | | Loss on equity method investments | $(115,286) | $(83,341) | | Loss on disposal of fixed assets | $(54,839) | $- | | Other income (expenses) | $214,880 | $(4,253) | | Total other income (expenses) | $853,927 | $(281,949) | [16. Related Party Transactions](index=43&type=section&id=16.%20Related%20Party%20Transactions) DocGo engaged in related party transactions, including legal services from Ely D. Tendler Strategic & Legal Services PLLC (owned by the General Counsel) totaling $234,230 in Q1 2023, and subcontractor services from PrideStaff (owned by an operations manager and spouse) totaling $93,311 in Q1 2023 - DocGo paid **$234,230** for legal services to Ely D. Tendler Strategic & Legal Services PLLC, a firm owned by the Company's General Counsel, during the three months ended March 31, 2023[177](index=177&type=chunk) - Subcontractor payments to PrideStaff, a related party owned by an operations manager and spouse, amounted to **$93,311** for the three months ended March 31, 2023, a decrease from **$209,153** in the prior year[178](index=178&type=chunk) [17. Income Taxes](index=43&type=section&id=17.%20Income%20Taxes) DocGo recorded an income tax benefit of $2.1 million for the three months ended March 31, 2023, compared to an expense of $0.4 million in the prior year, reflecting a pre-tax loss in the current period and the inclusion of state income taxes from new jurisdictions Income Tax Benefit (Provision) and Effective Tax Rate | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :------------------------ | :-------------------------------- | :-------------------------------- | | Income tax benefit (provision) | $2,129,870 | $(440,179) | | Effective tax rate | 38.21% | 4.85% | [18. 401(K) Plan](index=43&type=section&id=18.%20401%28K%29%20Plan) DocGo established a 401(k) plan in January 2022 for eligible U.S. employees but did not make any employer contributions as of March 31, 2023 - DocGo established a 401(k) plan in January 2022 for eligible U.S. employees but made no employer contributions as of March 31, 2023[180](index=180&type=chunk) [19. Legal Proceedings](index=43&type=section&id=19.%20Legal%20Proceedings) DocGo recorded a $1.0 million liability as of March 31, 2023, for an agreed-upon settlement of class-based claims under California state law, stemming from wage and hour violations alleged in a consolidated lawsuit - DocGo recorded a **$1,000,000** liability as of March 31, 2023, for a preliminarily approved settlement of class-based claims related to wage and hour violations under California state law[182](index=182&type=chunk)[183](index=183&type=chunk) [20. Risk and Uncertainties](index=44&type=section&id=20.%20Risk%20and%20Uncertainties) The COVID-19 pandemic had mixed impacts on DocGo, initially decreasing transportation volumes but accelerating demand for mobile health services. While COVID-19 testing revenue has significantly declined, the company anticipates continued growth in mobile health and transportation services due to secular factors like an aging population and patient preference for at-home care - COVID-19 testing activity, a significant revenue driver in 2021 and early 2022, has slowed considerably and is expected to account for an insignificant proportion of total revenues in 2023 and beyond[186](index=186&type=chunk)[187](index=187&type=chunk) - DocGo's business plan assumes continued recovery of industry-wide transportation volumes and increased demand for Mobile Health services, driven by longer-term secular factors such as an aging population and patient desire for treatments outside traditional settings[187](index=187&type=chunk)[200](index=200&type=chunk) [21. Subsequent Events](index=44&type=section&id=21.%20Subsequent%20Events) In April 2023, DocGo acquired the remaining noncontrolling interest in FMC NA for $7.0 million, consisting of $3.0 million in equity and $4.0 million in cash, resulting in 100% ownership - In April 2023, DocGo purchased the remaining noncontrolling interest in FMC NA for **$7,000,000**, comprising **$3,000,000** in equity (**360,145 shares**) and **$4,000,000** in cash, achieving **100% ownership**[188](index=188&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Result of Operations](index=45&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Result%20of%20Operations) This section provides management's perspective on DocGo's financial condition and results of operations for the three months ended March 31, 2023, compared to 2022. It covers an overview of the business, the impact of COVID-19, factors affecting performance, detailed analysis of revenue and expenses by segment, liquidity, capital resources, and critical accounting policies [Cautionary Note Regarding Forward-Looking Statements](index=45&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section advises readers that the report contains forward-looking statements subject to risks and uncertainties, with no obligation for future updates - The report contains forward-looking statements regarding DocGo's plans, strategies, and financial prospects, which are subject to substantial risks and uncertainties beyond management's control[190](index=190&type=chunk) - DocGo explicitly states it undertakes no obligation to publicly update or revise any forward-looking statements due to new information, future events, or otherwise[192](index=192&type=chunk) [Overview](index=45&type=section&id=Overview) This section provides a general introduction to DocGo's business as a healthcare transportation and mobile services company, outlining its operating segments and recent financial performance - DocGo, founded in 2015, is a healthcare transportation and mobile services company operating in the US and UK, leveraging proprietary technology for in-person medical treatment[193](index=193&type=chunk) - Beginning Q1 2023, DocGo reports in three operating segments: Transportation Services, Mobile Health Services, and a new Corporate segment for shared services, with prior-year figures adjusted for comparability[194](index=194&type=chunk)[195](index=195&type=chunk) - For the three months ended March 31, 2023, the Company recorded a net loss of **$3.9 million**, a decline from net income of **$9.4 million** in the prior-year period[196](index=196&type=chunk) [COVID-19 Impact](index=46&type=section&id=COVID-19%20Impact) This section discusses the mixed impact of COVID-19 on DocGo's business, noting the decline in testing revenue but the acceleration and diversification of mobile health services - COVID-19 initially caused a decline in non-emergency medical transport and event-related revenues but accelerated demand for mobile health services, which has since diversified beyond COVID-19 testing[197](index=197&type=chunk)[199](index=199&type=chunk) - COVID-19 testing revenue significantly declined in Q3 and Q4 2022 and Q1 2023, becoming an insignificant proportion of total revenues as the pandemic enters an endemic phase[199](index=199&type=chunk) - The pandemic accelerated the diversification and expansion of the Mobile Health segment, which is now DocGo's larger operating segment in terms of revenues and personnel[199](index=199&type=chunk) [Factors Affecting Our Results of Operations](index=48&type=section&id=Factors%20Affecting%20Our%20Results%20of%20Operations) This section identifies key internal and external factors influencing DocGo's financial performance, including market conditions, acquisitions, competition, and macroeconomic trends - DocGo's operating results are influenced by its ability to obtain operating licenses, the success of its acquisition strategy, conditions in healthcare transportation and mobile health markets, and the competitive environment[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[208](index=208&type=chunk) - Overall macroeconomic conditions, including rising interest rates, inflation, potential recession, and financial institution instability, significantly impact DocGo's financial performance, particularly by compressing gross profit margins due to increased labor, fuel, and medical supply costs[209](index=209&type=chunk)[214](index=214&type=chunk) - Future revenue growth depends on penetrating new and existing markets, controlling expenses (especially labor and vehicle costs), and continuous investment in R&D for innovative software services and mobile applications[203](index=203&type=chunk)[213](index=213&type=chunk)[215](index=215&type=chunk) [Components of Results of Operations](index=50&type=section&id=Components%20of%20Results%20of%20Operations) This section describes the primary components of DocGo's financial results, detailing revenue and cost structures across its Transportation Services, Mobile Health Services, and Corporate segments - DocGo's business is divided into three reportable segments: Transportation Services, Mobile Health Services, and Corporate, with all revenue and cost of goods sold contained within the first two segments[217](index=217&type=chunk) - Cost of revenues primarily includes revenue-generating wages, vehicle insurance, maintenance, fuel, laboratory fees, facility rent, medical supplies, and subcontractors, expected to rise with revenue[219](index=219&type=chunk) - Operating expenses, such as general and administrative, depreciation and amortization, legal and regulatory, technology and development, and sales, advertising, and marketing, are expected to increase to support business growth and public company operations[220](index=220&type=chunk)[221](index=221&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk)[225](index=225&type=chunk) [Results of Operations (Comparison of the Three Months Ended March 31, 2023 and March 31, 2022)](index=52&type=section&id=Results%20of%20Operations%20%28Comparison%20of%20the%20Three%20Months%20Ended%20March%2031%2C%202023%20and%20March%2031%2C%202022%29) This section provides a detailed comparative analysis of DocGo's financial performance, including revenue, cost of revenue, and operating expenses, for Q1 2023 versus Q1 2022 [Consolidated Revenue](index=54&type=section&id=Consolidated%20Revenue) This section analyzes DocGo's total revenue performance, highlighting a slight decrease for the three months ended March 31, 2023, compared to the prior year | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | Change ($) | Change (%) | | :------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Revenue, net | $113.0 million | $117.9 million | $(4.9) million | (4%) | [Mobile Health Revenue](index=54&type=section&id=Mobile%20Health%20Revenue) This section details the decline in Mobile Health revenue, primarily due to reduced COVID-19 testing services, partially offset by growth in other mobile health offerings | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | Change ($) | Change (%) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Mobile Health revenue | $72.9 million | $90.1 million | $(17.2) million | (19.1%) | | Estimated COVID-19 testing revenue | $1.0 million | $38.0 million | $(37.0) million | (97.4%) | [Transportation Services Revenue](index=54&type=section&id=Transportation%20Services%20Revenue) This section highlights the significant growth in Transportation Services revenue, driven by increased trip volumes, higher average trip prices, and strategic acquisitions | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | Change ($) | Change (%) | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Transportation Services revenue | $40.1 million | $27.8 million | $12.3 million | 44% |\ | Trip volumes | 58,176 | 48,110 | 10,066 | 21% | | Average trip price | $415 | $353 | $62 | 17.6% | - The increase in average trip price was also supported by an **8.7%** increase in the average Medicare reimbursement rate for ambulance transports[231](index=231&type=chunk) [Cost of Revenue](index=54&type=section&id=Cost%20of%20Revenue) This section examines the increase in DocGo's total cost of revenue and its percentage of revenue, attributing it to higher compensation and vehicle costs, despite reduced COVID-related expenses | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | Change ($) | Change (%) | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Total cost of revenue | $81.2 million | $78.0 million | $3.2 million | 4.1% | | Cost of revenue as % of revenue | 71.9% | 66.2% | 5.7 pp | | - Key drivers for the increase in cost of revenue included a **$15.7 million** increase in total compensation and a **$0.6 million** increase in vehicle costs, partially offset by a **$1.9 million** decline in subcontracted labor, an **$8.2 million** decrease in medical supplies, and a **$3.4 million** decline in lab fees[233](index=233&type=chunk) - For Mobile Health, cost of revenues as a percentage of revenues increased to **72.3%** in Q1 2023 from **62.7%** in Q1 2022, due to declining COVID-testing revenues and higher compensation expenses[234](index=234&type=chunk) - For Transportation Services, cost of revenues as a percentage of revenues declined to **71.1%** in Q1 2023 from **77.3%** in Q1 2022, reflecting higher per-trip prices, increased standby contracts, and lower average fuel prices[235](index=235&type=chunk) [Operating Expenses](index=55&type=section&id=Operating%20Expenses) This section details the substantial increase in DocGo's operating expenses, driven by higher compensation, depreciation, legal fees, and IT infrastructure investments | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | Change ($) | Change (%) | | :-------------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Total operating expenses | $38.7 million | $29.8 million | $8.9 million | 30% | | Operating expenses as % of revenue | 34.3% | 25.3% | 9.0 pp | | - Key increases included **$6.9 million** in total compensation (driven by stock compensation), **$1.4 million** in depreciation and amortization, **$2.3 million** in legal and regulatory fees, **$1.2 million** in insurance costs, and **$1.0 million** in IT infrastructure[236](index=236&type=chunk) - These increases were partially offset by a **$3.0 million** decline in bad debt expense, a **$0.5 million** decline in commissions, and a **$0.5 million** decline in marketing costs[236](index=236&type=chunk) - Corporate segment operating expenses significantly increased from **$10.8 million** in Q1 2022 to **$21.12 million** in Q1 2023, primarily due to higher headcount and stock compensation for corporate infrastructure[239](index=239&type=chunk) [Interest Income/(Expense), Net](index=55&type=section&id=Interest%20Income%2F%28Expense%29%2C%20Net) This section reports a shift to net interest income, reflecting higher cash balances and increased market interest rates for the three months ended March 31, 2023 | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :------------------------ | :-------------------------------- | :-------------------------------- | | Interest income (expense), net | $809,172 | $(135,606) | [Gain/(loss) on Remeasurement of Warrant Liabilities](index=55&type=section&id=Gain%2F%28loss%29%20on%20Remeasurement%20of%20Warrant%20Liabilities) This section notes the absence of warrant liability remeasurement gain or loss in Q1 2023, following the redemption of warrants in the prior year | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Loss on remeasurement of warrant liabilities | $- | $(58,749) | [Gain/(Loss) on Equity Method Investment](index=55&type=section&id=Gain%2F%28Loss%29%20on%20Equity%20Method%20Investment) This section reports an increased loss from equity method investments, reflecting DocGo's share of losses from a minority-interest entity | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Loss on equity method investments | $(115,286) | $(83,341) | [Gain/(loss) on Disposal of Fixed Assets](index=56&type=section&id=Gain%2F%28loss%29%20on%20Disposal%20of%20Fixed%20Assets) This section reports a loss on the disposal of fixed assets for the three months ended March 31, 2023, with no comparable event in the prior year | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Loss on disposal of fixed assets | $(54,839) | $- | [Income Tax Benefit/(Expense)](index=57&type=section&id=Income%20Tax%20Benefit%2F%28Expense%29) This section details a shift to an income tax benefit, reflecting a pre-tax loss in Q1 2023 and the inclusion of state income taxes from new jurisdictions | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :------------------------ | :-------------------------------- | :-------------------------------- | | Income tax benefit (provision) | $2.1 million | $(0.4) million | [Net Loss Attributable to Noncontrolling Interest](index=57&type=section&id=Net%20Loss%20Attributable%20to%20Noncontrolling%20Interest) This section reports a decrease in net loss attributable to noncontrolling interests, indicating improved performance in DocGo's joint venture investments | Metric | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to noncontrolling interests | $(0.5) million | $(1.3) million | [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) DocGo's liquidity is primarily supported by existing cash, expected operating cash flows, and a $90 million revolving credit line (undrawn as of March 31, 2023). The company anticipates these resources will be sufficient for at least the next twelve months, despite a decrease in working capital and cash balances due to acquisitions and operational timing - DocGo's primary sources of liquidity include equity financing, operating cash flows, and a **$90 million** revolving loan and security agreement, which was undrawn as of March 31, 2023[246](index=246&type=chunk)[247](index=247&type=chunk) - The company anticipates that existing cash, future operating cash flows, and the available line of credit will be sufficient to meet operating requirements for at least the next **twelve months**[249](index=249&type=chunk) - Future capital requirements are dependent on potential acquisitions, technology investments, and growth rates, and may be affected by external factors like interest rates and inflation[246](index=246&type=chunk) [Capital Resources](index=58&type=section&id=Capital%20Resources) This section details DocGo's working capital and available cash, noting a decrease primarily due to reduced cash balances and increased current liabilities | Metric | As of March 31, 2023 ($) | As of March 31, 2022 ($) | Change ($) | Change (%) | | :---------------- | :------------------- | :------------------- | :--------- | :--------- | | Current assets | $258.4 million | $268.2 million | $(9.8) million | (4%) | | Current liabilities | $109.0 million | $61.0 million | $48.0 million | 79% | | Total working capital | $149.4 million | $207.2 million | $(57.8) million | (28%) | | Available cash | $120.1 million | $188.4 million | $(68.3) million | (36.3%) | - Working capital decreased by **$57.8 million** to **$149.4 million** as of March 31, 2023, primarily due to reduced cash balances and increased current liabilities from business growth and acquisition-related payables[250](index=250&type=chunk) [Cash Flows](index=58&type=section&id=Cash%20Flows) This section analyzes DocGo's cash flow activities, highlighting cash used in operating, investing, and financing activities for the three months ended March 31, 2023 | Cash Flow Activity | Three Months Ended March 31, 2023 ($) | Three Months Ended March 31, 2022 ($) | Change ($) | Change (%) | | :----------------- | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Operating Activities | $(23.1) million | $18.3 million | $(41.4) million | (226%) | | Investing Activities | $(1.7) million | $(1.1) million | $(0.6) million | (55%) | | Financing Activities | $(12.0) million | $2.5 million | $(14.5) million | (580%) | | Net (decrease) increase in cash | $(36.6) million | $19.7 million | $(56.3) million | (286%) | - Operating activities used **$23.1 million** of cash in Q1 2023, primarily due to a net loss of **$3.9 million** and a **$24.7 million** increase in accounts receivable, partially offset by non-cash charges[252](index=252&type=chunk) - Investing activities used **$1.7 million** in Q1 2023, mainly for property and equipment acquisitions (**$2.0 million**) and intangibles (**$1.4 million**), partially offset by cash from an acquisition (**$1.6 million**)[254](index=254&type=chunk) - Financing activities used **$12.0 million** in Q1 2023, driven by **$11.5 million** in deferred payments for acquisitions and **$0.8 million** in finance lease payments, partially offset by **$0.4 million** from stock option exercises[256](index=256&type=chunk) [Critical Accounting Policies](index=61&type=section&id=Critical%20Accounting%20Policies) This section outlines DocGo's key accounting policies, including consolidation, business combinations, goodwill impairment, and revenue recognition, which involve significant management judgments and estimates - DocGo's financial statements are prepared under U.S. GAAP, consolidating wholly-owned subsidiaries and Variable Interest Entities (VIEs) like MD1 Medical Care P.C., where the company has power and benefits[261](index=261&type=chunk)[264](index=264&type=chunk) - Business combinations are accounted for using the acquisition method, recording acquired assets and liabilities at fair value, with goodwill representing the excess purchase price over identifiable net assets[266](index=266&type=chunk)[267](index=267&type=chunk) - Goodwill is not amortized but tested for impairment annually or more frequently if indicators suggest impairment, such as the **$5.1 million** impairment related to Ambulnz Health, LLC's liquidation in 2022[270](index=270&type=chunk)[272](index=272&type=chunk) - Revenue recognition follows ASC 606, identifying performance obligations and recognizing revenue as benefits are consumed by the customer, typically based on fixed or usage-based fees, net of estimated contractual allowances[273](index=273&type=chunk)[274](index=274&type=chunk)[275](index=275&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) DocGo's primary market risks include interest rate risk (minimal impact due to fixed-rate notes payable and undrawn credit line), foreign exchange risk (limited due to majority USD transactions), and concentration of credit risk from cash deposits and major customers - DocGo's principal market risk is interest rate volatility on cash equivalents, but cash flows are not expected to be significantly affected due to fixed interest rates on notes payable and an undrawn revolving credit facility[278](index=278&type=chunk) - Foreign exchange risk is limited as the majority of transactions are in U.S. dollars, with a foreign exchange gain of **$243,658** in Q1 2023, and no hedging strategies are currently utilized[279](index=279&type=chunk) - The company faces concentration of credit risk, with one customer accounting for approximately **46% of sales** and **62% of net accounts receivable** for the three months ended March 31, 2023[280](index=280&type=chunk)[281](index=281&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) DocGo's management, including its principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective as of March 31, 2023. There were no material changes in internal control over financial reporting during the quarter - DocGo's disclosure controls and procedures were deemed effective as of March 31, 2023, ensuring timely and accurate reporting of information[282](index=282&type=chunk) - No material changes in internal control over financial reporting occurred during the quarter ended March 31, 2023[283](index=283&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) DocGo is subject to legal proceedings and claims in the ordinary course of business, with details provided in Note 19 of the financial statements. The company also receives information requests from government agencies and takes appropriate action - DocGo is involved in legal actions and claims arising in the ordinary course of business, with specific details referenced in Note 19 of the unaudited Condensed Consolidated Financial Statements[285](index=285&type=chunk) - The company is also subject to requests for information and investigations from government agencies related to regulatory or investigational authority[286](index=286&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) As of the filing date, there have been no material changes to the risk factors previously disclosed in DocGo's Annual Report on Form 10-K for the year ended December 31, 2022 - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the year ended December 31, 2022, have occurred as of the date of this Quarterly Report on Form 10-Q[287](index=287&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) DocGo issued $1.0 million worth of common stock in a private placement to four accredited investors as part of its acquisition of Cardiac RMS, LLC on March 31, 2023. The company also reported no share repurchases in Q1 2023 under its $40 million program, which had seen $3.7 million in repurchases in 2022 - On March 31, 2023, DocGo issued **$1,000,000** worth of common stock in a private placement to four accredited investors as part of the acquisition of **51% of Cardiac RMS, LLC**[288](index=288&type=chunk)[289](index=289&type=chunk) - No shares were repurchased during the first quarter of 2023 under the **$40 million** share repurchase program, which is set to expire on November 24, 2023[290](index=290&type=chunk) [Item 3. Defaults Upon Senior Securities](index=66&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) DocGo reported no defaults upon senior securities for the period - There were no defaults upon senior securities[291](index=291&type=chunk) [Item 4. Mine Safety Disclosures](index=66&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to DocGo Inc - This item is not applicable[292](index=292&type=chunk) [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) DocGo reported no other information for the period - There is no other information to report[293](index=293&type=chunk) [Item 6. Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, officer certifications, and XBRL-related documents - The exhibits include the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, an Offer Letter, and certifications from the Principal Executive Officer and Principal Financial Officer[295](index=295&type=chunk) - XBRL Instance Document and Taxonomy Extension documents (Schema, Calculation, Definition, Label, Presentation) are also filed as exhibits[295](index=295&type=chunk) [Signatures](index=69&type=section&id=Signatures) The report is duly signed on May 9, 2023, by Anthony Capone, Chief Executive Officer, and Norman Rosenberg, Chief Financial Officer, on behalf of DocGo Inc - The report was signed on May 9, 2023, by Anthony Capone, Chief Executive Officer, and Norman Rosenberg, Chief Financial Officer, confirming due authorization[298](index=298&type=chunk)[300](index=300&type=chunk)

Financial Data and Key Metrics Changes - In 2022, the company generated revenues of $440.5 million, up from $318.7 million in 2021, representing a growth rate of 38% [35] - Adjusted EBITDA for 2022 amounted to $41.3 million, up more than 60% from $25.1 million in 2021 [56] - Net income for 2022 was $30.7 million, up nearly 60% from $19.2 million in 2021 [56] - The company expects 2023 revenue guidance in the range of $500 million to $510 million, representing year-over-year growth of about 14% to 16% [62] Business Line Data and Key Metrics Changes - Mobile health revenue amounted to $325.8 million in 2022, up 39% from $234.4 million in 2021 [54] - Medical transportation revenue was $114.7 million in 2022, up 36% from 2021, driven by higher trip counts and average price per trip [83] - The gross margin for mobile health improved to 38.9% in 2022 compared to 38.1% in 2021, while transportation gross margins were 24.5%, virtually unchanged from 24.7% in 2021 [84] Market Data and Key Metrics Changes - The company has 34 active RFP submissions pending award totaling over $1 billion in aggregate contract value [48] - The current backlog stands at $180 million over three years, expected to be fully rolled out by the end of Q3 2023 [36] Company Strategy and Development Direction - The company is transitioning its medical transportation business to a leased hour model, which provides downside margin protection and greater visibility to revenues [12][41] - The focus is on maximizing profitability and reducing costs, with initiatives like rapid normalization to cut startup costs [50][79] - The company plans to exit lower profitability markets while repositioning assets to service more lucrative contracts [80] Management's Comments on Operating Environment and Future Outlook - Management has prepared for the expiration of the Federal public health emergency on May 11, 2023, and this is fully considered in the 2023 guidance [52] - The company anticipates continued strong demand from customers in both mobile health and transportation services [62] - Management expressed confidence in achieving a gross margin of approximately 37% by the end of 2023 [46] Other Important Information - The company plans to continue its stock buyback program, with approximately $36 million remaining in the approved program [61] - The company has been successful in securing a $94 million medical transportation contract, which is a 100% leased hour contract [37] Q&A Session Summary Question: Confirmation on leased hour contracts in transportation business KPIs - Management acknowledged the suggestion and indicated they would consider how to report those KPIs moving forward [8][9] Question: Impact of public health emergency roll-off on business - Management explained that they have planned for this and structured contracts to mitigate impacts, as they do not operate on a fee-for-service basis [15][13] Question: Startup expenses composition and reduction timeline - Management detailed that labor costs, particularly from staffing agencies and overtime, are significant contributors to startup expenses, and they expect to reduce these costs over time [94][19] Question: Transition to leased hour model and customer retention - Management indicated that customer retention during the transition is expected to be strong, as hospitals are well-informed about the changes [99][73] Question: Revenue recognition from the $180 million backlog - Management clarified that the revenue from the backlog will be recognized in a linear fashion, with full run rate expected by Q4 2023 [108][105]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-39618 DocGo Inc. (Exact name of Registrant as specified in its Charter) | Delaware | 85-2515483 | | --- | --- | | (State or other jur ...

Financial Data and Key Metrics Changes - Total revenue for Q3 2022 increased by 22% year-over-year to $104.3 million, up from $85.8 million in Q3 2021 [5][27] - Adjusted EBITDA for Q3 2022 was $8.4 million, representing 8% of revenue, compared to $4 million or 4.7% of revenue in the prior year [38] - Net income improved to $2.5 million in Q3 2022 from $800,000 in Q3 2021, with a significant increase in gross margin percentage to 31.7% from 30.1% [30][31] Business Line Data and Key Metrics Changes - Mobile health revenue for Q3 2022 was $76.6 million, up from $67.9 million in Q3 2021, representing a 13% increase [28] - Medical transportation revenue rose to $27.7 million in Q3 2022 from $17.9 million in Q3 2021, marking an increase of approximately 55% [28] - Mobile health revenue accounted for 73% of total revenue in Q3 2022, down from 79% in the prior year [29] Market Data and Key Metrics Changes - Revenue generated by the UK market grew by 15% to $3 million during Q3 2022, representing approximately 3% of total revenue [29] - The company transitioned from mass COVID testing, which accounted for mid-single digits of total revenue in Q3 2022, down from approximately 35% in Q3 2021 [6][28] Company Strategy and Development Direction - The company is focusing on population health programs, which are gaining traction with increased budgets from municipal, state, and federal programs [6] - DocGo is expanding its mobile health and medical transport businesses while developing new markets to support scalable growth [8][12] - The company plans to leverage its technology investments and strategic acquisitions to enhance service offerings and capture a larger market share [17][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong demand for mobile health and transportation services, leading to an increase in revenue guidance for 2022 to a range of $430 million to $440 million [5][41] - The company anticipates that the initial launch expenses for new projects will normalize after 90 to 120 days, leading to long-term profitability [14][88] - Management highlighted the importance of maintaining high employee satisfaction and retention rates to ensure quality service delivery [80][81] Other Important Information - The CEO announced plans to retire effective December 31, 2022, with the current president, Anthony Capone, set to assume the CEO role [43][44] - The company has successfully integrated its mobile health services with existing transportation contracts, enhancing its service offerings [56] Q&A Session Summary Question: Can you provide details on the Westpac relationship and its impact on RPM strategy? - The relationship focuses on urgent care services to prevent hospital admissions, with a pricing structure based on hourly rates and potential bonus payments for successful patient outcomes [46][48] Question: How does the Epic integration enhance mobile health services? - The integration allows for easier ordering of mobile health services alongside transportation, making it a significant differentiator in contracts with health systems [53][56] Question: What is the strategy for pacing new contract ads and potential bottlenecks? - The company has demonstrated proficiency in scaling large projects quickly, allowing for rapid contract growth without significant bottlenecks [60][62] Question: How does DocGo's business model insulate it from labor headwinds? - The company operates a lease labor model, which allows for flexibility in staffing and pricing adjustments based on inflationary pressures, unlike traditional fee-for-service models [70][75] Question: What is the company's approach to employee retention? - The company offers competitive wages, bonuses based on customer satisfaction, and equity participation, contributing to high employee retention rates [80][81]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) This section provides DocGo Inc.'s unaudited condensed consolidated financial information and management's analysis for the reported periods [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents DocGo Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations and comprehensive income, statements of changes in stockholders' equity, and statements of cash flows, along with detailed notes explaining significant accounting policies, business operations, and financial details for the periods ended September 30, 2022, and December 31, 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time Total Assets: | Metric | Sep 30, 2022 (Unaudited) | Dec 31, 2021 (Audited) | | :----- | :----------------------- | :--------------------- | | Total Assets | $355,920,210 | $309,602,652 | Total Liabilities: | Metric | Sep 30, 2022 (Unaudited) | Dec 31, 2021 (Audited) | | :----- | :----------------------- | :--------------------- | | Total Liabilities | $85,087,351 | $82,545,628 | Total Stockholders' Equity: | Metric | Sep 30, 2022 (Unaudited) | Dec 31, 2021 (Audited) | | :----- | :----------------------- | :--------------------- | | Total Stockholders' Equity | $270,832,859 | $227,057,024 | [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) This statement details the company's revenues, expenses, and net income over specific reporting periods Revenue, Net: | Period | Sep 30, 2022 | Sep 30, 2021 | Change (YoY) | | :----- | :----------- | :----------- | :----------- | | Three Months | $104,319,894 | $85,838,988 | +21.5% | | Nine Months | $331,730,750 | $197,394,379 | +68.0% | Net Income (Loss): | Period | Sep 30, 2022 | Sep 30, 2021 | Change (YoY) | | :----- | :----------- | :----------- | :----------- | | Three Months | $2,466,486 | $801,566 | +207.7% | | Nine Months | $23,594,786 | $(1,095,427) | N/A (swing to profit) | Basic EPS: | Period | Sep 30, 2022 | Sep 30, 2021 | | :----- | :----------- | :----------- | | Three Months | $0.03 | $0.06 | | Nine Months | $0.26 | $0.00 | Diluted EPS: | Period | Sep 30, 2022 | Sep 30, 2021 | | :----- | :----------- | :----------- | | Three Months | $0.03 | $0.04 | | Nine Months | $0.24 | $0.00 | [Unaudited Condensed Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement outlines the changes in the company's equity accounts over a specified period Total Stockholders' Equity: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $270,832,859 | | Dec 31, 2021 | $227,057,024 | | Sep 30, 2021 | $67,063,620 | Additional Paid-in Capital: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $301,522,213 | | Dec 31, 2021 | $283,161,216 | | Sep 30, 2021 | $143,289,262 | Accumulated Deficit: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $(37,036,937) | | Dec 31, 2021 | $(63,556,714) | | Sep 30, 2021 | $(87,117,532) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Net Cash Provided by Operating Activities: | Period | Sep 30, 2022 | Sep 30, 2021 | Change (YoY) | | :----- | :----------- | :----------- | :----------- | | Nine Months | $37,607,545 | $6,853,001 | +448.8% | Net Cash Used in Investing Activities: | Period | Sep 30, 2022 | Sep 30, 2021 | Change (YoY) | | :----- | :----------- | :----------- | :----------- | | Nine Months | $(37,793,968) | $(4,447,371) | +750.0% | Net Cash Provided by Financing Activities: | Period | Sep 30, 2022 | Sep 30, 2021 | Change (YoY) | | :----- | :----------- | :----------- | :----------- | | Nine Months | $685,871 | $6,127,746 | -88.8% | Cash and Restricted Cash at End of Period: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $179,352,324 | | Sep 30, 2021 | $43,162,495 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [1. Description of Organization and Business Operations](index=10&type=section&id=1.%20Description%20of%20Organization%20and%20Business%20Operations) This note outlines the company's formation, business combination, and primary service offerings - DocGo Inc. consummated a business combination with Ambulnz, Inc. on November 5, 2021, accounted for as a reverse recapitalization[32](index=32&type=chunk)[33](index=33&type=chunk) - DocGo raised **$158.0 million** of net proceeds from the business combination, comprising **$43.4 million** from Motion's trust account and **$114.6 million** from PIPE Financing[34](index=34&type=chunk) - The Company provides healthcare transportation and mobile health services in major metropolitan cities in the U.S. and U.K., performing in-person care at various non-traditional locations[35](index=35&type=chunk) [2. Summary of Significant Accounting Policies](index=10&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note details the accounting principles and methods used in preparing the financial statements - The Unaudited Condensed Consolidated Financial Statements are prepared in accordance with U.S. GAAP and SEC interim reporting rules, to be read in conjunction with the 2021 Form 10-K[37](index=37&type=chunk) - The Company consolidates MD1 Medical Care P.C. as a Variable Interest Entity (VIE) due to its controlling financial interest, having the power and rights to control all activities and absorbing all losses[43](index=43&type=chunk)[44](index=44&type=chunk) - For the nine months ended September 30, 2022, one customer accounted for approximately **33% of sales** and **35% of net accounts receivable**, and another customer accounted for **11% of sales** and **0.1% of net accounts receivable**[52](index=52&type=chunk) - DocGo is an 'emerging growth company' and has elected not to opt out of the extended transition period for new or revised financial accounting standards, which may affect comparability with other public companies[56](index=56&type=chunk)[57](index=57&type=chunk) - Revenue is generated from Transportation Services and Mobile Health services, recognized when performance obligations are satisfied, typically immediately or over time for fixed-fee Mobile Health services[94](index=94&type=chunk)[101](index=101&type=chunk) Revenue Breakdown (Nine Months Ended Sep 30, 2022 vs. 2021): | Category | Sep 30, 2022 | Sep 30, 2021 | Change (YoY) | | :----------------------- | :----------- | :----------- | :----------- | | **Primary Geographical Markets:** | | | | | United States | $322,706,143 | $190,595,217 | +69.3% | | United Kingdom | $9,024,607 | $6,799,162 | +32.7% | | **Major Segments/Service Lines:** | | | | | Transportation Services | $77,657,852 | $65,657,141 | +18.3% | | Mobile Health | $254,072,898 | $131,737,238 | +92.9% | - The Company holds **50% interests** in RND Health Services Inc. (acquired Oct 2021 for **$655,876**) and National Providers Association, LLC (acquired Nov 2021 for **$30,000**, now **50% owned**), accounted for using the equity method[107](index=107&type=chunk)[110](index=110&type=chunk) [3. Property and Equipment, net](index=21&type=section&id=3.%20Property%20and%20Equipment,%20net) This note details the company's property and equipment assets and related depreciation expenses Property and Equipment, Net: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $17,577,830 | | Dec 31, 2021 | $12,733,889 | Depreciation Expense (Nine Months Ended Sep 30): | Year | Amount | | :--- | :----- | | 2022 | $2,592,244 | | 2021 | $1,697,380 | [4. Acquisition of Businesses](index=21&type=section&id=4.%20Acquisition%20of%20Businesses) This note provides details on the businesses acquired by the company during the reporting period - On July 6, 2022, Holdings acquired **100%** of Government Medical Services, LLC (GMS) for **$20.3 million** in cash, plus **$3.0 million** upon meeting certain performance conditions[119](index=119&type=chunk) - On July 13, 2022, the Company acquired **100%** of Exceptional Medical Transportation, LLC (Exceptional) for **$13.7 million**, consisting of **$7.7 million cash** at closing and **$6 million** payable over 24 months[121](index=121&type=chunk) - On August 9, 2022, the Company acquired **100%** of Ryan Brothers Fort Atkinson, LLC (RT) for **$11.4 million**, including **$7.4 million cash** at closing and **$4.0 million** of estimated contingent consideration over 24 months[126](index=126&type=chunk) Total Consideration for Q3 2022 Acquisitions: | Acquisition | Cash Consideration | Due to Seller | Contingent Consideration | Amounts held under escrow | Total Consideration | | :---------- | :----------------- | :------------ | :----------------------- | :------------------------ | :------------------ | | Ryan Brothers | $7,422,252 | - | $4,000,000 | - | $11,422,252 | | Exceptional | $6,375,000 | $6,000,000 | - | $1,333,333 | $13,708,333 | | GMS | $20,338,789 | - | - | - | $20,338,789 | | **Total** | **$34,136,041** | **$6,000,000** | **$4,000,000** | **$1,333,333** | **$45,469,374** | [5. Goodwill](index=24&type=section&id=5.%20Goodwill) This note provides information on the company's goodwill balance and changes during the period Goodwill Carrying Value: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $34,533,363 | | Dec 31, 2021 | $8,686,966 | - Goodwill acquired during the period amounted to **$25,846,397**[131](index=131&type=chunk) [6. Intangibles](index=24&type=section&id=6.%20Intangibles) This note details the company's intangible assets and their associated amortization expenses Net Intangibles: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $20,647,790 | | Dec 31, 2021 | $10,678,049 | Amortization Expense (Nine Months Ended Sep 30): | Year | Amount | | :--- | :----- | | 2022 | $2,269,423 | | 2021 | $1,432,983 | Future Amortization Expense (as of Sep 30, 2022): | Year | Amortization Expense | | :--- | :------------------- | | 2022 (remaining) | $680,930 | | 2023 | $2,078,406 | | 2024 | $1,510,563 | | 2025 | $1,460,965 | | 2026 | $1,094,588 | | Thereafter | $4,934,074 | | **Total** | **$11,759,526** | [7. Accrued Liabilities](index=25&type=section&id=7.%20Accrued%20Liabilities) This note provides a breakdown of the company's accrued liabilities and their changes Total Accrued Liabilities: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $38,558,074 | | Dec 31, 2021 | $35,110,877 | - Key increases in accrued liabilities include payroll, general expenses, subcontractors, and workers' compensation, while accrued bonus and lab fees decreased[137](index=137&type=chunk) [8. Line of Credit](index=25&type=section&id=8.%20Line%20of%20Credit) This note details the company's revolving loan and bridge credit agreement - The Company has a revolving loan and bridge credit agreement with a maximum advance amount of **$12,000,000**[138](index=138&type=chunk) - The interest rate is the Wall Street Journal Prime Rate (**6.25%** at Sep 30, 2022) plus **1.00%**, with a minimum of **5.00%** per annum[138](index=138&type=chunk) - As of September 30, 2022, the outstanding balance on the line of credit was **$1,000,000**, drawn in January 2022 to fund operations[138](index=138&type=chunk) [9. Notes Payable](index=26&type=section&id=9.%20Notes%20Payable) This note outlines the company's notes payable, including their purpose, interest rates, and maturities Total Notes Payable: | Date | Amount | | :--- | :----- | | Sep 30, 2022 | $2,136,808 | | Dec 31, 2021 | $1,903,288 | - Notes payable are primarily for transportation equipment, with interest rates ranging from **2.5% to 8%** and maturities through 2051[141](index=141&type=chunk) Future Minimum Annual Maturities (as of Sep 30, 2022): | Year | Notes Payable | | :--- | :------------ | | 2022 (remaining) | $137,959 | | 2023 | $582,722 | | 2024 | $446,812 | | 2025 | $386,785 | | 2026 | $311,769 | | Thereafter | $270,761 | | **Total Maturities** | **$2,136,808** | [10. Business Segment Information](index=26&type=section&id=10.%20Business%20Segment%20Information) This note provides financial data for the company's operating segments: Transportation Services and Mobile Health - DocGo operates in two segments: Transportation Services and Mobile Health services, with performance evaluated by the chief operating decision maker based on revenue streams[144](index=144&type=chunk) Nine Months Ended Sep 30, 2022 Segment Performance: | Metric | Transportation Services | Mobile Health Services | Total | | :-------------------------- | :---------------------- | :--------------------- | :---------- | | Revenues | $77,657,852 | $254,072,898 | $331,730,750 | | Income (loss) from operations | $(33,035,470) | $54,786,982 | $21,751,512 | | Total assets | $173,789,449 | $182,130,761 | $355,920,210 | | Depreciation and amortization expense | $6,271,952 | $981,704 | $7,253,656 | | Stock compensation | $1,253,450 | $3,280,309 | $4,533,759 | | Long-lived assets | $19,584,744 | $53,174,239 | $72,758,983 | Three Months Ended Sep 30, 2022 Segment Performance: | Metric | Transportation Services | Mobile Health Services | Total | | :-------------------------- | :---------------------- | :--------------------- | :---------- | | Revenues | $27,670,109 | $76,649,785 | $104,319,894 | | Income (loss) from operations | $(4,213,156) | $8,412,346 | $4,199,190 | [11. Equity](index=28&type=section&id=11.%20Equity) This note describes changes in the company's equity, including stock conversions and repurchase programs - DocGo's Series A preferred stock was cancelled and converted into common stock during the November 2021 merger[152](index=152&type=chunk) - The Board authorized a share repurchase program on May 24, 2022, to purchase up to **$40 million** of common stock, expiring November 24, 2023[160](index=160&type=chunk) - During the second quarter of 2022, the Company repurchased **70,000 shares** of common stock for **$498,000**; no shares were repurchased in the third quarter of 2022[160](index=160&type=chunk) [12. Stock Based Compensation](index=29&type=section&id=12.%20Stock%20Based%20Compensation) This note details the company's stock-based compensation plans and related activity - The Company established the DocGo Inc. Equity Incentive Plan in 2021, reserving **16,607,894 shares** of common stock for issuance[163](index=163&type=chunk) Stock Option Activity (Nine Months Ended Sep 30, 2022): | Metric | Options Shares | Weighted Average Exercise Price | | :-------------------------- | :------------- | :------------------------------ | | Balance as of Dec 31, 2021 | 8,422,972 | $6.21 | | Granted/Vested during year | 2,183,026 | $5.92 | | Exercised during year | (1,637,159) | $2.04 | | Cancelled during year | (706,642) | $7.71 | | Balance as of Sep 30, 2022 | 8,262,197 | $7.04 | - Total unrecognized compensation related to unvested stock option awards was **$27,812,078**, expected to be recognized over a weighted-average period of approximately **3.73 years**[170](index=170&type=chunk) - As of September 30, 2022, the Company had **$1,241,163** in unrecognized compensation cost related to non-vested RSUs, expected to be recognized over approximately **3.1 years**[176](index=176&type=chunk) [13. Leases](index=32&type=section&id=13.%20Leases) This note provides information on the company's operating and finance leases, including costs and liabilities Total Lease Cost (Nine Months Ended Sep 30): | Year | Operating Lease Expense | Short-term Lease Expense | Total Lease Cost | | :--- | :---------------------- | :----------------------- | :--------------- | | 2022 | $1,517,541 | $863,316 | $2,380,857 | | 2021 | $1,446,067 | $256,448 | $1,702,515 | Operating Lease Liabilities (Sep 30, 2022): | Category | Amount | | :-------------------------- | :----------- | | Lease right-of-use assets | $8,185,547 | | Lease liability - current portion | $2,059,278 | | Lease liability, net of current portion | $6,406,246 | | Total lease liability | $8,465,524 | Finance Lease Liabilities (Sep 30, 2022): | Category | Amount | | :-------------------------- | :----------- | | Lease right-of-use assets | $9,421,196 | | Lease liability - current portion | $2,858,968 | | Lease liability, net of current portion | $6,086,521 | | Total lease liability | $8,945,489 | - A gain of **$1.4 million** was recorded in June 2022 from the remeasurement of finance leases, resulting from a decision to purchase vehicles at the end of their lease terms[191](index=191&type=chunk) [14. Other Expense](index=36&type=section&id=14.%20Other%20Expense) This note details other non-operating expenses, including warrant liability remeasurement - For the three months ended September 30, 2022, the Company recorded a loss of approximately **$1.8 million** from the remeasurement of warrant liabilities, reflecting an increase in DocGo's stock price[199](index=199&type=chunk) - All outstanding warrants were redeemed in September 2022[199](index=199&type=chunk) [15. Related Party Transactions](index=36&type=section&id=15.%20Related%20Party%20Transactions) This note discloses transactions with related parties, including legal and subcontractor services Legal Services Payments to Ely D. Tendler Strategic & Legal Services PLLC (owned by General Counsel): | Period | Amount | | :----- | :----------- | | Nine Months Ended Sep 30, 2022 | $704,593 | | Nine Months Ended Sep 30, 2021 | $476,293 | Subcontractor Payments to Pride Staff (owned by operations manager and spouse): | Period | Amount | | :----- | :----------- | | Nine Months Ended Sep 30, 2022 | $364,844 | | Nine Months Ended Sep 30, 2021 | $592,417 | [16. Income Taxes](index=37&type=section&id=16.%20Income%20Taxes) This note provides information on the company's income tax expense and its drivers Income Tax Expense (Nine Months Ended Sep 30): | Year | Amount | | :--- | :----------- | | 2022 | $1,163,755 | | 2021 | $613,531 | - The increase in income tax expense resulted from higher pretax income and state income taxes in new jurisdictions[206](index=206&type=chunk) [17. 401(K) Plan](index=37&type=section&id=17.%20401(K)%20Plan) This note describes the company's 401(k) plan for eligible U.S. employees - The Company established a 401(k) plan in January 2022 for eligible U.S. employees[207](index=207&type=chunk) - No employer contributions were made to the 401(k) plan as of September 30, 2022[207](index=207&type=chunk) [18. Legal Proceedings](index=37&type=section&id=18.%20Legal%20Proceedings) This note details the company's legal proceedings and related liabilities - As of September 30, 2022, the Company recorded a **$1,000,000 liability** for an agreed settlement of class-based wage and hour claims (Stephanie Zamora, Jascha Dlugatch, et al. v. Ambulnz Health, LLC, et al.)[209](index=209&type=chunk) - The proposed settlement received preliminary court approval on September 9, 2022[210](index=210&type=chunk) [19. Risk and Uncertainties](index=38&type=section&id=19.%20Risk%20and%20Uncertainties) This note discusses the impact of the COVID-19 pandemic and other risks on the company's operations - The COVID-19 pandemic had a mixed impact, initially causing a decline in non-emergency medical transportation but leading to incremental revenue from FEMA projects and significant growth in Mobile Health services, particularly COVID-19 testing[214](index=214&type=chunk)[215](index=215&type=chunk) - The pandemic accelerated the diversification and expansion of the Mobile Health segment, which has now become the Company's larger operating segment, driven by secular factors like patient desire for non-traditional care settings[215](index=215&type=chunk)[216](index=216&type=chunk) - Medicare accelerated payments of approximately **$2,397,024** received in April 2020 were fully repaid by September 30, 2022[219](index=219&type=chunk) [20. Subsequent Events](index=39&type=section&id=20.%20Subsequent%20Events) This note describes significant events that occurred after the reporting period - On October 12, 2022, the Company acquired Community Ambulance Service Ltd in the United Kingdom for approximately **£4.8 million** in cash to increase its presence and access municipal contracts[220](index=220&type=chunk) - On November 1, 2022, the Company entered into a new revolving loan and security agreement for a maximum of **$90,000,000**, with an option to increase by an additional **$50,000,000**, maturing on November 1, 2027[221](index=221&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Result of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Result%20of%20Operations) This section analyzes DocGo's financial condition and operating results, including business overview, COVID-19 impact, key factors, and liquidity for the reported periods [Overview](index=40&type=section&id=Overview) This section provides a general description of DocGo's business, its operating segments, and key financial highlights - DocGo, incorporated in 2015, is a healthcare transportation and mobile services company operating in major metropolitan cities in the U.S. and U.K.[225](index=225&type=chunk) - The Company derives revenue primarily from two operating segments: Transportation Services (emergency and non-emergency ambulance transport) and Mobile Health Services (at-home/office care, COVID-19 testing, event services)[226](index=226&type=chunk)[227](index=227&type=chunk) Net Income (Loss): | Period | Sep 30, 2022 | Sep 30, 2021 | | :----- | :----------- | :----------- | | Three Months | $2.5 million | $0.8 million | | Nine Months | $23.6 million | $(1.1) million | [COVID-19](index=41&type=section&id=COVID-19) This section discusses the mixed impact of the COVID-19 pandemic on the company's business operations and strategic direction - COVID-19 had a mixed impact, initially causing a decline in non-emergency medical transport volumes but leading to positive business impacts from FEMA projects and the expansion of Rapid Reliable Testing (RRT) for COVID-19 testing[230](index=230&type=chunk)[231](index=231&type=chunk) - RRT, part of the Mobile Health segment, has grown significantly and expanded beyond COVID-19 testing, accelerating the diversification of the Company's business, with Mobile Health now being the larger operating segment[233](index=233&type=chunk) - The Company's business plan assumes continued recovery of industry-wide transportation volumes and increased demand for mobile health services, driven by long-term secular factors[235](index=235&type=chunk) [Factors Affecting Our Results of Operations](index=42&type=section&id=Factors%20Affecting%20Our%20Results%20of%20Operations) This section analyzes key internal and external factors influencing the company's financial performance, including acquisitions, market conditions, and inflation - DocGo completed three acquisitions during the nine months ended September 30, 2022, for an aggregate payment of **$34.1 million** (excluding **$1.3 million** held in escrow), as part of its strategy to obtain operating licenses and expand market presence[238](index=238&type=chunk) - Trip volumes increased by approximately **29%** for the three months ended September 30, 2022, and **13%** for the nine months ended September 30, 2022, due to customer base growth, new market entry, and acquisitions[266](index=266&type=chunk)[287](index=287&type=chunk) - The average trip price increased from **$303 to $374** (Q3 YoY) and **$297 to $362** (9M YoY), reflecting a shift to higher-priced transports, acquisition of licenses for higher acuity transports, and a **5.1% increase** in Medicare reimbursement rates[266](index=266&type=chunk)[287](index=287&type=chunk) - The inflation rate reached approximately **9.1%** in June 2022 and **8.2%** in September 2022, impacting the Company's expenses (wages, fuel, medical supplies) and compressing gross profit margins as higher costs are difficult to pass on to customers[250](index=250&type=chunk) - The Company's performance is dependent on investments in research and development to continually develop and introduce innovative new software services, integrations, and mobile applications[251](index=251&type=chunk) [Components of Results of Operations](index=44&type=section&id=Components%20of%20Results%20of%20Operations) This section describes the primary revenue streams and expense categories that constitute the company's operating results - Revenue is generated from the Company's ambulance Transportation Services segment and its Mobile Health segment[255](index=255&type=chunk) - Cost of revenues primarily includes revenue-generating wages, vehicle insurance, maintenance, fuel, laboratory fees, facility rent, medical supplies, and subcontractors[256](index=256&type=chunk) - Operating expenses consist of general and administrative, depreciation and amortization, legal and regulatory, technology and development, and sales, advertising and marketing expenses[257](index=257&type=chunk)[258](index=258&type=chunk)[259](index=259&type=chunk)[260](index=260&type=chunk)[261](index=261&type=chunk) [Results of Operations](index=46&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance for the reported periods [Comparison of the three months ended September 30, 2022 and 2021](index=46&type=section&id=Comparison%20of%20the%20three%20months%20ended%20September%2030,%202022%20and%202021) This section compares the company's financial performance for the three-month periods ended September 30, 2022, and 2021 - Total revenues for the three months ended September 30, 2022, increased by **$18.5 million (22%)** to **$104.3 million** compared to the same period in 2021[265](index=265&type=chunk) - Transportation Services revenue increased by **$9.8 million (55%)** to **$27.7 million**, driven by a **29% increase** in trip volumes and a rise in average trip price from **$303 to $374**[266](index=266&type=chunk) - Mobile Health revenue increased by **$8.7 million (13%)** to **$76.6 million**, primarily due to the expansion of services, outweighing a decline in COVID-19 testing revenue[267](index=267&type=chunk) - Cost of revenue as a percentage of revenue decreased to **68.3%** in Q3 2022 from **69.9%** in Q3 2021, despite absolute dollar increases in compensation and vehicle costs, partially offset by decreases in lab fees and subcontracted labor[268](index=268&type=chunk)[269](index=269&type=chunk) - Operating expenses increased by **18%** to **$28.8 million** but declined as a percentage of revenue to **27.7%** (from **28.3%**) due to increased overall revenues and the semi-fixed nature of corporate infrastructure costs[273](index=273&type=chunk) - The Company recorded a **$1.8 million loss** from the remeasurement of warrant liabilities in Q3 2022, reflecting an increase in DocGo's stock price, with all outstanding warrants redeemed in September 2022[279](index=279&type=chunk) [Comparison of the nine months ended September 30, 2022 and 2021](index=50&type=section&id=Comparison%20of%20the%20nine%20months%20ended%20September%2030,%202022%20and%202021) This section compares the company's financial performance for the nine-month periods ended September 30, 2022, and 2021 - Total revenues for the nine months ended September 30, 2022, increased by **$134.3 million (68%)** to **$331.7 million** compared to the same period in 2021[285](index=285&type=chunk) - Transportation Services revenue increased by **$12.0 million (18%)** to **$77.6 million**, driven by a **13% increase** in trip volumes and a rise in average trip price from **$297 to $362**[287](index=287&type=chunk) - Mobile Health revenue increased by **$122.3 million (93%)** to **$254.1 million**, primarily due to the expansion of services, including COVID-19 testing and vaccination[288](index=288&type=chunk) - Cost of revenue as a percentage of revenue decreased to **66.1%** in the first nine months of 2022 from **69.4%** in the prior year, despite absolute dollar increases in compensation, subcontracted labor, and medical supplies, partially offset by lower lab fees[289](index=289&type=chunk)[290](index=290&type=chunk) - Operating expenses increased by **49.5%** to **$90.5 million** but decreased as a percentage of revenue to **27.3%** (from **30.6%**) due to the significant increase in overall revenues and the semi-fixed nature of corporate infrastructure costs[294](index=294&type=chunk) - The Company recorded a **$1.1 million gain** from the remeasurement of warrant liabilities in the nine months ended September 30, 2022, due to a decline in DocGo's stock price[300](index=300&type=chunk) - A gain of approximately **$1.4 million** was recorded from the remeasurement of finance leases in the nine months ended September 30, 2022[302](index=302&type=chunk) [Liquidity and Capital Resources](index=54&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's ability to generate and manage cash, including sources of funds and capital allocation strategies - DocGo's principal sources of liquidity include equity financing, with approximately **$158.1 million** net proceeds from the November 2021 merger, and operating cash flows[307](index=307&type=chunk) Working Capital: | Date | Amount | Change (YoY) | | :--- | :----- | :----------- | | Sep 30, 2022 | $180.9 million | +507% | | Sep 30, 2021 | $29.8 million | | Cash Flow Summary (Nine Months Ended Sep 30): | Activity | 2022 | 2021 | Change (YoY) | | :-------------------------------- | :----- | :----- | :----------- | | Operating Activities | $37.6 million | $6.9 million | +445% | | Investing Activities | $(37.8) million | $(4.4) million | +759% | | Financing Activities | $0.7 million | $6.0 million | -88% | - Subsequent to Q3 2022, on November 1, 2022, the Company entered into a new revolving loan and security agreement for a maximum of **$90 million**, with an option to increase by an additional **$50 million**[308](index=308&type=chunk) - As of September 30, 2022, **$39.5 million** remained available for share repurchases under the **$40 million** program approved on May 24, 2022; no shares were repurchased during Q3 2022[322](index=322&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, DocGo Inc. is exempt from providing detailed quantitative and qualitative disclosures about market risk - DocGo is a smaller reporting company and is not required to provide detailed quantitative and qualitative disclosures about market risk[324](index=324&type=chunk) [Item 4. Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that DocGo's disclosure controls and procedures were effective as of September 30, 2022, and reported no material changes in internal control over financial reporting during the quarter - Management concluded that the Company's disclosure controls and procedures were effective as of September 30, 2022[325](index=325&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended September 30, 2022[326](index=326&type=chunk) [PART II - OTHER INFORMATION](index=58&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) This part contains other required disclosures, including legal proceedings, risk factors, and details on equity securities [Item 1. Legal Proceedings](index=58&type=section&id=Item%201.%20Legal%20Proceedings) DocGo Inc. is involved in legal proceedings and claims in the ordinary course of business, with further details provided in Note 18 of the financial statements - The Company is subject to legal proceedings, claims, and litigation arising in the ordinary course of business, with details in Note 18 of the financial statements[329](index=329&type=chunk) - DocGo receives requests for information from government agencies in connection with their regulatory or investigational authority[330](index=330&type=chunk) [Item 1A. Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) This section highlights new risk factors related to inflation and the share repurchase program, which could impact gross margins and stock price - No material changes to risk factors disclosed in the 2021 Form 10-K, other than the inflation rate risk and share repurchase risk[331](index=331&type=chunk) - The inflation rate reached **8.2%** in September 2022, and if it remains above anticipated levels, gross margins could be below plan, adversely affecting business, operating results, and cash flows[332](index=332&type=chunk) - The share repurchase program is discretionary, and any future decisions to reduce or discontinue repurchases could cause the market price for common stock to decline and negatively impact investor confidence[333](index=333&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Board approved a **$40 million** share repurchase program on May 24, 2022, expiring November 24, 2023, with **$39.5 million** remaining available as of September 30, 2022 - The Board approved a share repurchase program on May 24, 2022, to purchase up to **$40 million** of the Company's common stock, expiring November 24, 2023[337](index=337&type=chunk) - No shares were repurchased during the three months ended September 30, 2022[337](index=337&type=chunk) - As of September 30, 2022, **$39.5 million** remained available for share repurchases under the program[337](index=337&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) DocGo Inc. reported no defaults upon senior securities for the period - No defaults upon senior securities were reported[338](index=338&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to DocGo Inc.'s operations - This item is not applicable to the Company[339](index=339&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported under this item[340](index=340&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including corporate governance documents, a new credit agreement, and various certifications - Key exhibits include the Second Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, a Credit Agreement dated November 1, 2022, and various certifications (31.1, 31.2, 32.1, 32.2) and XBRL documents[342](index=342&type=chunk) [Signatures](index=61&type=section&id=Signatures) The report was signed on behalf of DocGo Inc. by Andre Oberholzer, Chief Financial Officer, on November 8, 2022 - The report was signed by Andre Oberholzer, Chief Financial Officer of DocGo Inc., on November 8, 2022[347](index=347&type=chunk)