DocGo (DCGO) - 2021 Q4 - Annual Report

Report Information This section provides key filing details for DocGo Inc.'s 2021 annual report, including its SEC submission, Nasdaq listings, and company classifications Form 10-K Details This report is DocGo Inc.'s annual report for the fiscal year ended December 31, 2021, filed with the SEC, listed on Nasdaq, and classified as a non-accelerated filer, smaller reporting company, and emerging growth company - DocGo Inc.'s annual report filing date is December 31, 2021, submitted to the SEC[2] - As of June 30, 2021, the aggregate market value of voting and non-voting common stock held by non-affiliates was approximately $114.31 million. As of March 14, 2022, the company had 100,174,275 shares of common stock outstanding[6][7] Employee Composition as of December 31, 2021 | Indicator | Detail | | :--- | :--- | | Trading Symbol (Common Stock) | DCGO | | Trading Symbol (Redeemable Warrants) | DCGOW | | Listing Exchange | Nasdaq Stock Market LLC | | Well-Known Seasoned Issuer | No | | Required to File Reports | No | | All Reports Filed | No | | Interactive Data File Submitted | Yes | | Filer Type | Non-Accelerated Filer, Smaller Reporting Company, Emerging Growth Company | Documents Incorporated by Reference Portions of this annual report are supplemented by reference to the company's proxy statement for the 2022 Annual Meeting of Stockholders, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2021 - Portions of the company's proxy statement for the 2022 Annual Meeting of Stockholders are incorporated by reference into Part III of this 10-K report, to be filed within 120 days after the 2021 fiscal year-end[9] Table of Contents This section provides a comprehensive list of all chapters and sub-sections within the annual report, facilitating navigation Cautionary Note Regarding Forward-Looking Statements This annual report contains forward-looking statements concerning the company's business and financial plans, strategies, and prospects, which are subject to risks and uncertainties that may cause actual results to differ materially from expectations - Forward-looking statements in this report are based on management's beliefs and assumptions but are subject to risks, uncertainties, and assumptions, which may cause actual results to differ materially from expectations[12] - The company does not undertake to publicly update or revise any forward-looking statements due to new information, future events, or otherwise[13] Risk Factors Summary This section outlines the principal risks that could materially affect DocGo's business, financial condition, and operational results Risks Relating to the Ownership of DocGo Securities Ownership of DocGo securities faces risks including potential stock price decline from future sales, Nasdaq delisting, warrant exercise dilution, and warrants expiring worthless or having terms modified - Future stock sales or market expectations of future sales could cause the market price of common stock to decline[15] - Nasdaq may delist DocGo's securities, limiting investors' ability to trade and increasing trading restrictions[16] - The exercise of warrants will increase the number of shares available for future resale, resulting in dilution to existing shareholders[16] - Warrants may never be in-the-money, could expire worthless, and their terms may be modified with holder approval, to the detriment of holders[16] - The market price and trading volume of common stock and warrants may fluctuate, and if analysts cease publishing research reports, the stock price and trading volume could significantly decline[17] Risks Related to DocGo's Business and Industry DocGo's business faces risks from COVID-19, limited operating history, sustained losses, growth management, high customer acquisition costs, rising labor and insurance expenses, reliance on partners and government contracts, and IT system failures - The COVID-19 pandemic has had a material impact on DocGo's business[18] - DocGo has a limited operating history, which may make it difficult to evaluate its business, and it may not be successful[18] - DocGo has a history of losses and expects operating expenses to increase significantly in the future, and it may not achieve or maintain profitability[19] - If DocGo fails to manage its growth effectively, its financial results and future prospects will be adversely affected[19] - DocGo incurs significant upfront costs in customer relationships, and if it fails to maintain and grow these relationships or recover costs, its business will be adversely affected[20] - DocGo's labor costs are significant, and if it cannot control these costs, its business will be adversely affected[20] - DocGo's insurance costs are significant and rapidly increasing, and if it cannot obtain reasonably priced insurance or control losses, its business will be adversely affected[21] - DocGo relies on contractual relationships with healthcare provider partners and other strategic alliances, which could adversely affect its business[21] - DocGo relies on government contracts, which could adversely affect its business[22] - A significant portion of recent revenue growth has come from a few large customers, with the two largest customers accounting for 26% and 24% of total revenue in 2021, respectively[23][24] - DocGo's business relies on complex IT systems, and any failure to maintain them could have an adverse effect[26] - DocGo's platform is highly technical, and if it fails to operate effectively, its business could be adversely affected[27] - DocGo must comply with health information transmission, security, and privacy laws[28] - Security breaches, data loss, and other disruptions could expose sensitive information or prevent DocGo from accessing critical information, and subject it to liability[29] - If DocGo fails to successfully develop new products and technologies, or adapt to rapidly changing technology and industry standards or regulatory requirements, its business could be adversely affected[30] - DocGo is subject to federal, state, and local laws and regulations, including labor laws, and non-compliance or changes in laws could adversely affect its business[30] - Motion's previously restated financial statements and material weaknesses in internal control could lead to litigation or other disputes[30] PART I This part details DocGo's business operations, including services, merger, human capital, competition, intellectual property, and regulatory environment Item 1. Business DocGo provides high-quality, cost-effective on-demand medical mobility solutions and "last-mile" care services through its proprietary AI technology platform and a network of medical professionals across 26 states and the UK - DocGo provides on-demand medical mobility solutions and "last-mile" care services through its proprietary AI technology platform and a network of medical professionals across 26 states and the UK[34] - The company's mission is to transform medical transportation and mobile healthcare, offering more accessible, affordable, and efficient patient-centered out-of-hospital care[35] - DocGo completed its business combination with Motion Acquisition Corp. on November 5, 2021, and was renamed DocGo Inc[42] Our Company Established in 2015, DocGo leverages an AI-driven proprietary technology platform and a network of medical professionals across 26 states and the UK to deliver on-demand medical mobility and "last-mile" care services - DocGo, founded in 2015, provides on-demand medical mobility solutions and "last-mile" care services through its AI-driven proprietary technology platform and a network of over 4,000 medical professionals[34][35] - The company has completed over 6.2 million patient interactions, aiming to transform medical transportation and mobile healthcare into more accessible, affordable, and efficient patient-centered out-of-hospital care[35] Our Segments DocGo operates through two primary segments: Transportation Services (under the Ambulnz brand), which contributed approximately 26.4% of 2021 revenue, and Mobile Health Solutions, which contributed 73.6% and is projected for significant growth - DocGo's on-demand medical mobility solutions are offered under the Ambulnz brand, including emergency and non-emergency transportation services, contributing approximately 26.4% of revenue in 2021[36][38] - Mobile Health Solutions provide in-home assessments, diagnostics, triage, and treatment services, contributing approximately 73.6% of revenue in 2021, with significant growth expected due to the increasing adoption of telehealth[39][40] - As of December 31, 2021, the company operated 294 ambulances in the U.S. and 32 in the U.K.[38] Merger with Motion Acquisition Corp. DocGo Inc., formerly Motion Acquisition Corp., completed its business combination with Ambulnz, Inc. on November 5, 2021, making Ambulnz a wholly-owned subsidiary and securing $158 million in net financing - DocGo Inc. (formerly Motion Acquisition Corp.) completed its business combination with Ambulnz, Inc. on November 5, 2021, with Ambulnz becoming a wholly-owned subsidiary of DocGo[42] - Following the merger, the company raised $158 million in net proceeds through Motion's trust account and PIPE financing, after deducting $20 million in transaction costs[43] Human Capital Resources As of December 31, 2021, DocGo employed over 2,900 individuals, including medical professionals and support staff, and engaged an additional 2,100 through subcontractors, focusing on talent attraction and retention through compensation and training - The company also employed approximately 2,100 personnel through subcontracted labor agencies, primarily in medical professional roles[45] - DocGo offers an industry-leading compensation model, including base hourly wages, performance-based bonuses, health insurance, paid time off, and an equity incentive plan for frontline clinicians, to attract and retain high-quality talent[48][49] - The company established DocGo Academy and DocGo EMS Academy, providing free training and career development opportunities to cultivate and attract medical professionals[50][56] Employee Composition as of December 31, 2021 | Category | Full-Time | Part-Time | Total | | :--- | :--- | :--- | :--- | | Medical Professionals | 1295 | 1205 | 2500 | | Field Management | 169 | 9 | 178 | | Corporate Support | 242 | 4 | 246 | | Total | 1706 | 1218 | 2924 | Competition DocGo operates in a highly competitive U.S. healthcare industry, facing competition in medical mobility and "last-mile" solutions from local providers, national organizations, and large tech companies, based on service quality, pricing, and technology - DocGo faces intense competition in the medical transportation and "last-mile" healthcare solutions markets from small local providers, large national organizations (e.g., Rural/Metro Corporation, AMR), and potentially large technology companies (e.g., Apple, Amazon) and retailers (e.g., Walmart, CVS)[58][59][60] - Competition in the medical transportation industry is based on customer service, clinical care, employee recruitment and training, pricing, billing and reimbursement expertise[59] - Competition in the telehealth industry is based on scale, ease of use, convenience and accessibility, brand recognition, breadth, depth, and effectiveness of services, technology, clinical quality, customer support, cost, reputation, and customer satisfaction and value[60] Intellectual Property DocGo's intellectual property, including its proprietary platform, mobile applications, trademarks, and patents, is protected through copyrights, trademarks, patents, trade secrets, licensing, and confidentiality agreements - DocGo's intellectual property includes website content, proprietary platforms, mobile applications, registered domain names, software code, firmware, hardware designs, registered and unregistered trademarks, copyrights, trade secrets, inventions, and patent applications[61] - The company protects its intellectual property through copyrights, trademarks, patents, trade secrets, intellectual property licenses, and contractual rights, including confidentiality agreements[62] - The Ambulnz trademark and company logo are registered in the U.S. and U.K., while the DocGo trademark and design are registered in the U.K., and the DocGo trademark is being registered in the U.S.[62] Regulation DocGo's operations are extensively regulated by federal, state, local, and international laws, including the False Claims Act, HIPAA, anti-kickback statutes, Stark Law, and corporate practice of medicine prohibitions, with non-compliance carrying significant penalties - DocGo's operations are extensively regulated by federal, state, local, and international jurisdictions, with laws and regulations constantly evolving and potentially becoming more stringent[63] - The Federal False Claims Act imposes civil and criminal liability for submitting false or fraudulent claims to the federal government, including substantial fines and treble damages[65] - The Health Insurance Portability and Accountability Act (HIPAA) and its amendments establish criminal penalties for healthcare fraud and false statements, and set privacy and security standards for protected health information (PHI)[69] - The Federal Anti-Kickback Statute prohibits offering or accepting any form of remuneration to induce referrals or services covered by federal healthcare programs (e.g., Medicare, Medicaid)[71] - The Federal Stark Law prohibits physicians from referring Medicare patients for designated health services to entities with which they have a financial relationship, unless an exception applies, and is a strict liability statute[72] - Many states prohibit general business corporations (like DocGo) from practicing medicine, controlling physicians' medical decisions, or sharing professional fees with physicians[73][81] - International operations are subject to different and potentially more stringent laws and regulations, including anti-corruption laws (e.g., FCPA, UK Bribery Act 2010), economic sanctions laws, and various privacy, insurance, tax, and trade laws and regulations[83][85][88] Available Information DocGo provides free electronic copies of its SEC filings, including Form 10-K, 10-Q, and 8-K reports and amendments, on the "Investors" section of its website, www.DocGo.com - DocGo provides free electronic copies of its Form 10-K, 10-Q, and 8-K reports and amendments filed with the SEC on the "Investors" section of its website, www.DocGo.com[91](index=91&type=chunk) Item 1A. Risk Factors DocGo faces risks from business strategy failures, over-reliance on partners and government contracts, high customer acquisition costs, acquisition integration challenges, COVID-19 impacts, intense competition, key client loss, rising labor costs, and IT system failures - DocGo's future financial performance and success largely depend on its ability to successfully implement its business strategy, including developing new healthcare provider partnerships, expanding existing ones, pursuing organic growth, making selective acquisitions, and improving operational efficiency and productivity[93] - DocGo's business growth heavily relies on its acquisition strategy, which involves significant risks such as business integration, unforeseen liabilities, asset impairment, additional debt, or equity dilution[100][102] - The COVID-19 pandemic adversely affected DocGo's medical transportation business but significantly increased demand for remote and mobile testing and vaccination services, with COVID testing-related revenue reaching approximately $110 million in 2021[108][111] - DocGo's labor costs are its largest fixed cost, accounting for 25.1% of revenue in 2021 and 59.9% in 2020[125] - DocGo's business and competitive advantage depend on the performance and reliability of its technology platform; any system outages, failures, or reliance on third-party mobile operating systems and app marketplaces could adversely affect its business[155][156][159] - DocGo heavily relies on information technology networks and systems to securely process, transmit, and store sensitive data; security breaches, data loss, or other disruptions could harm its reputation, lead to legal liability, and financial losses[164][168][169] - As an "emerging growth company," DocGo can utilize certain exemptions, such as not requiring an auditor attestation report on internal controls, which may make its stock less attractive to some investors[137][300][302] Risks Related to DocGo's Business Strategy DocGo's business strategy faces risks of failed implementation, including inability to develop customer relationships, expand markets, launch new services, or achieve operational efficiencies, alongside high reliance on contractual partners and acquisition integration challenges - DocGo's business strategy includes developing new healthcare provider partnerships, expanding existing ones, leveraging organic growth opportunities, making selective acquisitions, and improving operational efficiency and productivity, but its successful implementation is uncertain[93][94] - DocGo heavily relies on contractual relationships with healthcare provider partners, which may pose commercial and regulatory risks, such as the contract with Fresenius contributing approximately 7.1% of revenue in 2021[95][96] - DocGo's growth strategy relies on acquisitions, but acquisitions involve significant risks such as business integration, unforeseen liabilities, asset impairment, additional debt or equity dilution, and may divert management's attention[100][102][104] Risks Related to DocGo's Business and Industry DocGo's business faces challenges from COVID-19's mixed impact on transportation and mobile health, intense industry competition, key customer loss, government contract dependency, rising labor costs, and difficulties in accounts receivable collection - The COVID-19 pandemic adversely affected DocGo's medical transportation business but significantly increased demand for remote and mobile testing and vaccination services, with COVID testing-related revenue reaching approximately $110 million in 2021[108][111] - The medical transportation and telehealth industries are highly competitive, with DocGo facing competition from government entities, hospitals, local and national providers, and large technology companies[116][117] - A significant portion of DocGo's revenue growth comes from a few large customers, with the two largest customers contributing 26% and 24% of total sales in 2021, respectively, and these contracts are often terminable at will, posing a risk of customer loss[123] - DocGo's labor costs are its largest fixed cost, accounting for 25.1% of revenue in 2021 and 59.9% in 2020; labor shortages and union activities could lead to further cost increases[125][127] - The company faces risks of difficulties in accounts receivable collection, unfavorable changes in payer mix, and failure to accurately assess the costs of new revenue opportunities[128][129] Risks Related to DocGo's Limited Operating History DocGo's limited operating history since 2015 makes business evaluation difficult, and it faces inherent risks of an early-stage company, including sustained losses, increased operating expenses, and pressure from rapid growth - DocGo has a limited operating history since its founding in 2015, making it difficult to evaluate its business and prospects, and it faces risks inherent in an early-stage company, including financing needs, commercialization challenges, market acceptance, regulatory issues, and competition[142] - DocGo incurred net losses annually before achieving net income of $19.2 million in 2021, with accumulated deficits of $63.6 million as of December 31, 2021, and expects significantly increased operating expenses, potentially failing to achieve or maintain profitability[144][145] - DocGo's rapid growth (revenue from $30.9 million in 2017 to $318.7 million in 2021, and over 2,900 employees) places significant strain on management, operations, and financial infrastructure, which could adversely affect its business, financial condition, and operating results if not effectively managed[146][147][149] Risks Related to Technology DocGo's business relies heavily on complex IT systems and its proprietary technology platform, making it vulnerable to system failures, internet disruptions, and data security breaches, which could lead to reputational damage, legal liability, and financial losses - DocGo's business relies on complex IT systems and a proprietary technology platform; any system outages, failures, or maintenance issues could affect resource allocation, billing processes, and customer satisfaction[151][153] - The functionality and reliability of the company's technology platform depend on internet and mobile infrastructure, as well as third-party mobile operating systems and app marketplaces; any disruptions or compatibility issues could adversely affect its business[155][156][159] - DocGo relies on third-party service providers and software, including open-source software, which may lead to service interruptions, data loss, increased costs, and intellectual property infringement or compliance risks[160][161][163] - Data security breaches, loss of sensitive business, customer, or patient information (including PHI and PII), or unauthorized access could result in reputational harm, legal liability, high remediation costs, and financial losses[164][168][169] Other Risks Related to DocGo's Business DocGo's success depends on retaining key personnel and medical professionals, faces intellectual property risks, and must adapt to technological changes. It also faces litigation, regulatory compliance, insurance, capital expenditure, international operation, and tax risks - DocGo's success largely depends on the contributions of key management personnel (e.g., founder Stan Vashovsky) and its ability to recruit, train, and retain qualified medical professionals; personnel turnover could adversely affect operations[171][172][173] - The company faces risks of failing to protect or enforce its intellectual property rights, as well as claims of infringing others' proprietary technology or intellectual property, which could lead to costly litigation and management distraction[174][177][178][180] - DocGo's marketing efforts (including a brand relaunch in January 2021) may be ineffective, and failure to successfully develop new products and technologies or adapt to rapidly changing technology and industry standards could adversely affect its business[181][183][185][186] - The company may face litigation risks from medical malpractice, vehicle collisions, patient care incidents, employee injuries, billing practices, and employment disputes, and insurance coverage and reserves may be insufficient to cover all losses[187][188][193][194] - DocGo's international operations (e.g., in the U.K.) face additional regulatory, economic, political, and cultural risks; natural disasters, war, terrorism, and cybersecurity incidents could also materially adversely affect the business[196][198][199][201] - As of December 31, 2021, DocGo had approximately $56.6 million in federal net operating loss carryforwards and approximately $67.2 million in state net operating loss carryforwards, but their utilization may be limited due to ownership changes[202] - Changes in tax laws (e.g., increased U.S. corporate income tax rates) or unexpected tax liabilities could adversely affect DocGo's effective income tax rate and profitability, and changes in accounting rules and interpretations could significantly impact financial statements[204][205] - DocGo's internal controls may be ineffective, and its independent registered public accounting firm may not be able to attest to their effectiveness, which could affect the accuracy and timeliness of financial reporting[206][208] - Motion's prior material weaknesses in internal control over financial reporting (e.g., misclassification of warrants and Class A common stock) could lead to litigation or other disputes and adversely affect the company's business, operating results, and financial condition[209][212][213][215] Risks Related to Healthcare Regulation DocGo operates in a highly regulated healthcare industry, requiring compliance with complex federal and state laws like the False Claims Act, HIPAA, and anti-kickback statutes, with non-compliance leading to significant penalties and operational disruptions - DocGo operates in the highly regulated U.S. healthcare industry and must comply with federal and state laws and regulations, including the False Claims Act, HIPAA, anti-kickback statutes, Stark Law, and corporate practice of medicine prohibitions[217][218][220] - Failure to comply with these laws and regulations could result in civil or criminal penalties, fines, recoupment of overpayments, license revocation, exclusion from government healthcare programs, and potential litigation and negative publicity[223][224] - Telehealth industry laws and regulations are still evolving, and relaxed restrictions during the COVID-19 pandemic may be reinstated or modified, adversely affecting DocGo's telehealth services[237][238] - DocGo must properly enroll in government healthcare programs to receive reimbursement for services, and expansion into new markets may cause enrollment delays. Reductions in Medicare and Medicaid reimbursement rates or changes in rules could materially adversely affect DocGo's revenue and operating results[240][242][246][248][250][253] - The company may be subject to federal and state investigations and compliance reviews, which could lead to significant expenses, negative publicity, and management distraction, potentially resulting in fines and penalties[254] - DocGo's business practices could be deemed illegal fee-splitting or corporate practice of medicine, potentially leading to penalties, contract invalidation, or requiring restructuring of contractual arrangements[256][258] Additional Risks Relating to Ownership of Common Stock and Warrants Ownership of DocGo's common stock and warrants faces risks including Nasdaq delisting, lack of cash dividends, analyst coverage impact, future stock sales or warrant exercise dilution, anti-takeover provisions, and potential warrant redemption or modification - Nasdaq may delist DocGo's securities, which could result in limited market quotations, reduced liquidity, designation as a "penny stock," and limited future financing capabilities[261][263] - DocGo currently does not intend to pay cash dividends in the foreseeable future, and investor returns will depend on selling common stock for a price greater than the purchase price[266][267] - Future stock sales or expectations of future sales, as well as warrant exercises, could lead to a decline in the market price of common stock and dilution of existing shareholders' equity[271][275][290][291] - Anti-takeover provisions in DocGo's charter may delay or prevent a change of control, limiting shareholders' ability to receive a premium[279][281] - DocGo may redeem unexpired warrants at an unfavorable time, causing them to become worthless; warrant terms may also be modified with holder approval, to the detriment of holders[288][289][292][293] - The market price and trading volume of common stock and warrants may fluctuate due to various factors, including company performance, analyst expectations, changes in key personnel, market disruptions, and macroeconomic conditions[295] Item 1B. Unresolved Staff Comments This report does not contain any unresolved staff comments - No unresolved staff comments are mentioned in this report[304] Item 2. Properties DocGo's headquarters are in New York City, with 26 leased or owned office locations across 26 U.S. states and the UK, primarily for ambulance parking, garages, maintenance, and administration - DocGo's headquarters are in New York City, and it leases or owns office facilities in the U.S. (26 locations) and the U.K. (3 locations), primarily for administrative, sales, marketing, ambulance parking, garages, and maintenance[305] - As of December 31, 2021, the company operated 482 vehicles, including 294 ambulances, 85 wheelchair vans, and 103 basic transport or support vehicles[307] - Approximately 47% of the company's fleet is leased, and 53% is owned, with the existing ambulance fleet having an average age of approximately four years[307] Item 3. Legal Proceedings DocGo is involved in legal proceedings, claims, and investigations in its ordinary course of business, with potential losses disclosed and accrued according to accounting standards - DocGo is involved in legal proceedings, claims, and investigations in its ordinary course of business, and potential losses are disclosed and accrued according to accounting standards[309][310] - Management believes the company has adequate legal defenses for all legal proceedings, and the outcomes will not have a material adverse effect on the consolidated financial statements[309] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to this report - Mine safety disclosures are not applicable to this report[311] PART II This part covers DocGo's common stock market, stockholder matters, management's financial discussion, and financial statements Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities DocGo's common stock and warrants trade on the Nasdaq Capital Market under "DCGO" and "DCGOW," respectively, with 103 common stockholders and 2 warrant holders as of March 11, 2022, and no cash dividends paid to date - DocGo's common stock and warrants trade on the Nasdaq Capital Market under the symbols "DCGO" and "DCGOW," respectively[314] - As of March 11, 2022, the company had 103 holders of common stock and 2 holders of warrants[315] - The company has not paid cash dividends to date, and future dividend payments will be determined by the Board of Directors based on factors such as the company's earnings, capital needs, and financial condition[316] Item 6. Reserved This item is reserved - This item is reserved[318] Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses DocGo's financial condition and operating results for the fiscal year ended December 31, 2021, highlighting its business overview, COVID-19 impact, revenue and expense components, and liquidity - DocGo is a medical transportation and mobile health services company, utilizing proprietary dispatch and communication technology to provide high-quality medical transportation and in-home healthcare services in major metropolitan areas across the U.S. and U.K.[320] - The company's revenue is primarily derived from two operating segments: Transportation Services (including emergency response and non-emergency transport) and Mobile Health Services (including in-home and in-office services, COVID-19 testing, and event services)[321][322] - The COVID-19 pandemic had a complex impact on the company's business: ambulance transport volumes decreased, but demand for mobile health services (especially COVID-19 testing and vaccinations) significantly increased, with Mobile Health revenue reaching $234.4 million in 2021, compared to $30.9 million in 2020[325][327][330] - Factors affecting the company's operating results include obtaining operating licenses, acquisition strategy, market conditions for healthcare transportation and mobile health services, overall economic environment, availability of medical professionals, labor costs, supplier production schedules, inflation, and R&D investments[332][333][334][335][337][340][341][342][343] - The company expects its existing cash and cash equivalents, anticipated future cash flows from operations, and available credit facilities to be sufficient to meet its operating needs for at least the next twelve months[374] 2021 vs 2020 Net Income/Loss | Indicator | 2021 (Millions USD) | 2020 (Millions USD) | | :--- | :--- | :--- | | Net Income/(Loss) | 19.2 | (14.8) | Overview DocGo, founded in 2015, is a medical transportation and mobile services company that uses proprietary technology to provide high-quality medical transport and in-home care in major U.S. and UK metropolitan areas - DocGo, founded in 2015, is a medical transportation and mobile services company that utilizes proprietary dispatch and communication technology to provide high-quality medical transportation and in-home healthcare services in major metropolitan areas across the U.S. and U.K.[320] - The company's revenue is primarily derived from two operating segments: Transportation Services (including emergency response and non-emergency transport) and Mobile Health Services (including in-home and in-office services, COVID-19 testing, and event services)[321][322] COVID-19 Impact COVID-19 had a mixed impact on DocGo, reducing non-emergency transport but significantly boosting mobile health services, with 2021 mobile health revenue reaching $234.4 million, accelerating business diversification despite ongoing uncertainties - The COVID-19 pandemic negatively impacted DocGo's non-emergency medical transportation business, but by December 2021, transport volumes had increased by 27.2% compared to March 2020[325] - The company achieved significant growth in mobile health through participation in FEMA emergency programs and expansion of Rapid Reliable Testing (RRT) services, with Mobile Health revenue reaching $234.4 million in 2021, compared to $30.9 million in 2020[326][327] - The company received approximately $1 million in Public Health and Social Services Emergency Fund payments and approximately $2.4 million in accelerated Medicare payments in 2020, of which $1.7 million was recouped by Medicare by December 31, 2021[329] - The pandemic accelerated the company's business diversification towards mobile health services, but the long-term sustainability of the pandemic's ongoing impact and related revenue (especially COVID-19 testing and vaccinations) remains uncertain[330][331] Factors Affecting Our Results of Operations DocGo's operating results are influenced by factors such as operating license acquisition, acquisition strategy, healthcare market conditions, economic environment, medical professional availability, labor costs, inflation, R&D investment, and the regulatory landscape - Operating Licenses: New license approvals are lengthy, and the company mitigates risk by acquiring existing businesses and licenses[332] - Acquisitions: Historical growth has been partly achieved through acquisitions, and future expansion will continue through acquisitions to broaden geographic reach and enhance value[333] - Healthcare Services Market: The transportation services market relies on surgeries and medical procedures; transport volumes decreased during the pandemic, but the company reallocated assets to meet changing demand[334] - Overall Economic Conditions: National and local economic changes, such as demographics, healthcare coverage, and interest rates, affect financial performance[335] - Trip Volume and Average Trip Price: Trip volume is a key indicator of demand for transportation services, and average trip price reflects service compensation rates. The average trip price increased in 2021 due to changes in service mix, and Medicare reimbursement rate increases are expected to further boost prices in 2022[337][338] - Cost Control Capability: Labor, medical supplies, and vehicle-related costs are major expenses, and the company uses proprietary technology to improve productivity and optimize labor costs[339] - Inflation: Inflation rates rose significantly in 2021, leading to increased wages, fuel, and medical supply costs, compressing gross margins, and 2022 inflation is expected to exceed the past decade's levels[340][341] - R&D Investment and Customer Experience: Continuous investment in R&D, innovative software services, and mobile applications is crucial for maintaining market position and revenue growth[342] - Regulatory Environment: The company's business is subject to federal, state, and local laws and regulations (including healthcare and emergency medical services laws), and any significant changes could affect operations and costs[343] Components of Results of Operations DocGo's operating results are segmented into Transportation Services and Mobile Health Services, with revenue from both, and costs primarily comprising employee wages, vehicle expenses, and subcontractor fees, alongside various operating expenses - DocGo's business consists of two reportable segments: Transportation Services and Mobile Health Services, with performance evaluated based on the operating results of each segment[345] - Revenue: Derived from ambulance transportation and mobile health services[346] - Cost of Revenue: Primarily includes employee wages, vehicle insurance, maintenance, fuel, lab fees, facility rent, medical supplies, and subcontractor fees, expected to increase with revenue growth[347] - Operating Expenses: Include general and administrative expenses (salaries, bad debt, insurance, consulting fees, professional services), expected to increase with business growth and public company operations[348] - Depreciation and Amortization: Asset depreciation uses the straight-line method, and intangible assets are amortized over their useful lives[349] - Legal and Regulatory: Includes legal fees, healthcare compliance consulting fees, claims processing fees, and legal settlement costs[350] - Technology and Development: Primarily for proprietary technology design and development, third-party software, and technology, expected to increase in the future to support growth[351] - Sales, Advertising, and Marketing: Includes sales commissions, marketing programs, trade shows, and promotional materials, expected to increase with marketing activities and business expansion[352] - Interest Expense: Primarily from interest on outstanding notes and financing obligations[353] Results of Operations (Comparison of Fiscal 2021 with Fiscal 2020) DocGo achieved significant growth in fiscal year 2021, with total revenue increasing by 239% to $318.7 million and a net profit of $19.2 million, driven primarily by a 659% increase in mobile health services revenue Comparison of Operating Results 2021 vs 2020 (Millions USD) | Indicator | 2021 | 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Revenue | 318.7 | 94.1 | 224.6 | 239% | | Cost of Revenue | 209.0 | 62.7 | 146.3 | 233% | | Total Operating Expenses | 94.4 | 46.1 | 48.3 | 105% | | Operating Income/(Loss) | 15.4 | (14.8) | 30.2 | - | | Total Other Income (Expense) | 4.4 | 0.1 | 4.3 | 3450% | | Net Income/(Loss) | 19.2 | (14.8) | 34.0 | - | | Net Income/(Loss) Attributable to DocGo Inc. Stockholders | 23.8 | (14.4) | 38.2 | - | Revenue by Business Segment 2021 vs 2020 | Business Segment | 2021 Revenue (Millions USD) | 2020 Revenue (Millions USD) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Transportation Services | 84.3 | 63.2 | 21.1 | 33% | | Mobile Health | 234.4 | 30.9 | 203.5 | 659% | - Transportation Services revenue growth was primarily due to a 12% increase in transport trips and a rise in average trip price (from $324 to $342), along with a 135% increase in fixed-rate ambulance service revenue[357] - The significant growth in Mobile Health revenue is primarily attributed to the expanded scope of services in 2021, particularly COVID-19 related testing and vaccination services[359] - Cost of revenue as a percentage of revenue decreased from 66.6% in 2020 to 65.6% in 2021, but the absolute amount significantly increased due to higher compensation, subcontracted labor, lab fees, medical supplies, and vehicle costs[360][361] - Operating expenses as a percentage of revenue decreased from 49.0% in 2020 to 29.6% in 2021, primarily due to the substantial increase in total revenue and the semi-fixed nature of the company's infrastructure costs[364] - Net interest expense increased to $0.8 million in 2021, primarily reflecting increased payments for leased vehicles. A $5.2 million gain was recognized from the revaluation of warrant liabilities[368][370] Liquidity and Capital Resources DocGo primarily obtains liquidity through equity financing, including $158.1 million net proceeds from the Motion merger in 2021, and operating cash flow, expecting sufficient resources for at least the next twelve months - DocGo primarily obtains liquidity through equity financing (including $158.1 million in net proceeds from the merger with Motion) and operating cash flow[373] - As of December 31, 2021, total cash available was $175.5 million, an increase of $143.1 million from 2020, primarily reflecting proceeds from the Motion transaction[375] - The company expects its existing cash and cash equivalents, anticipated future cash flows from operations, and available credit facilities to be sufficient to meet its operating needs for at least the next twelve months[374] - Operating activities used $1.9 million in cash in 2021, primarily due to a $57.1 million increase in accounts receivable, partially offset by a $32.6 million increase in accounts payable and accrued expenses[378] - Investing activities used $8.6 million in cash in 2021, primarily for the acquisition of property and equipment ($4.8 million) and business and intangible assets ($3.1 million) [380] - Financing activities provided $155.2 million in cash in 2021, primarily from $158.1 million in net proceeds from common stock issuance related to the Motion merger[382] Working Capital Comparison 2021 vs 2020 (Millions USD) | Indicator | 2021-12-31 | 2020-12-31 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current Assets | 256.0 | 58.4 | 197.6 | 338% | | Current Liabilities | 57.9 | 23.5 | 34.4 | 146% | | Total Working Capital | 198.1 | 34.9 | 163.2 | 468% | Cash Flow Summary 2021 vs 2020 (Millions USD) | Cash Flow Category | 2021 | 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | (1.9) | (10.7) | 8.8 | -82% | | Net Cash Flow from Investing Activities | (8.6) | (6.0) | (3.1) | 43% | | Net Cash Flow from Financing Activities | 155.2 | (0.8) | 156.5 | - | | Effect of Exchange Rate Changes | 0.0 | 0.2 | (0.2) | -100% | | Net Increase/(Decrease) in Cash | 144.7 | (17.3) | 162.0 | - | Critical Accounting Policies DocGo's financial statements adhere to U.S. GAAP and SEC rules, using reverse recapitalization for the Motion merger, and key policies cover consolidation, foreign currency, estimates, credit risk, revenue recognition, and income taxes - DocGo's consolidated financial statements adhere to U.S. GAAP and SEC rules, applying reverse recapitalization accounting for the merger with Motion, with Ambulnz, Inc. treated as the accounting acquirer[387][388][443][447] - The company consolidates the variable interest entity MD1 Medical Care P.C., as it has control over MD1 and bears its losses[390][449] - Key accounting estimates include allowance for doubtful accounts, equity-based compensation, incremental borrowing rates for lease agreements, software development costs, impairment of long-lived assets, goodwill and indefinite-lived intangible assets, business combinations, reserves for self-insured losses, and income taxes[452] - The company had two major customers in 2021, contributing approximately 23% and 26% of revenue, and approximately 26% and 24% of net accounts receivable, respectively[458] - DocGo, as an "emerging growth company," has elected to use the extended transition period provided by the JOBS Act for complying with new or revised accounting standards[460][461] - The company's revenue recognition follows ASC 606, treating transportation services and mobile health services as single performance obligations, with revenue recognized upon completion of the performance obligation[496][497][498][501][505][506] Revenue by Geographic Market and Business Segment 2021 vs 2020 | Category | 2021 | 2020 | | :--- | :--- | :--- | | Primary Geographic Markets | | | | United States | $309,218,594 | $88,362,445 | | United Kingdom | $9,499,986 | $5,728,213 | | Total Revenue | $318,718,580 | $94,090,658 | | Primary Segments/Service Lines | | | | Transportation Services | $84,268,817 | $63,188,855 | | Mobile Health | $234,449,763 | $30,901,803 | | Total Revenue | $318,718,580 | $94,090,658 | Item 7A. Quantitative and Qualitative Disclosures About Market Risk DocGo, as a smaller reporting company, is not required to provide information under this item per Exchange Act Rule 12b-2 and Regulation S-K Item 10(f)(1) - DocGo, as a smaller reporting company, is not required to provide quantitative and qualitative disclosures about market risk[405] Item 8. Financial Statements and Supplementary Data This section presents DocGo Inc.'s consolidated financial statements, including the independent auditor's report, balance sheets, statements of operations, changes in stockholders' equity, cash flows, and comprehensive notes detailing accounting policies and financial items - This section contains the consolidated financial statements of DocGo Inc. and its subsidiaries, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income (Loss), Consolidated Statements of Changes in Stockholders' Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements[408][409] - The independent registered public accounting firm, Urish Popeck & Co., LLC, issued an unqualified opinion on the consolidated financial statements as of December 31, 2021, and 2020[410] Consolidated Balance Sheets Summary (Millions USD) | Indicator | 2021-12-31 | 2020-12-31 | | :--- | :--- | :--- | | Total Assets | 309.6 | 100.2 | | Total Liabilities | 82.5 | 33.2 | | Total Equity Attributable to DocGo Inc. Stockholders | 219.6 | 55.0 | | Non-Controlling Interests | 7.5 | 11.9 | | Total Liabilities and Stockholders' Equity | 309.6 | 100.2 | Consolidated Statements of Operations and Comprehensive Income (Loss) Summary (Millions USD) | Indicator | 2021 | 2020 | | :--- | :--- | :--- | | Net Revenue | 318.7 | 94.1 | | Cost of Revenue | 209.0 | 62.7 | | Total Operating Expenses | 94.4 | 46.1 | | Operating Income/(Loss) | 15.4 | (14.8) | | Net Income/(Loss) | 19.2 | (14.8) | | Net Income/(Loss) Attributable to DocGo Inc. Stockholders | 23.7 | (14.4) | | Basic Net Income/(Loss) Per Share | 0.30 | (0.25) | | Diluted Net Income/(Loss) Per Share | 0.25 | (0.25) | Consolidated Statements of Cash Flows Summary (Millions USD) | Cash Flow Category | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | (1.9) | (10.7) | | Net Cash Flow from Investing Activities | (8.6) | (6.0) | | Net Cash Flow from Financing Activities | 155.2 | (0.8) | | Net Increase/(Decrease) in Cash and Restricted Cash | 144.6 | (17.3) | Report of Independent Registered Public Accounting Firm Independent registered public accounting firm Urish Popeck & Co., LLC issued an unqualified opinion on DocGo Inc.'s consolidated financial statements for 2021 and 2020, affirming fair presentation of financial position and operating results - The independent registered public accounting firm Urish Popeck & Co., LLC issued an unqualified opinion on the consolidated financial statements of DocGo Inc. and its subsidiaries as of December 31, 2021, and 2020[410] - The auditors have served as the company's auditors since 2021 and performed the audit in accordance with PCAOB standards, but did not express an opinion on the effectiveness of internal control over financial reporting[411][412][414] Consolidated Balance Sheets As of December 31, 2021, DocGo's total assets significantly increased to $309.6 million from $100.2 million in 2020, driven by higher cash and receivables, with total liabilities rising to $82.5 million and total stockholders' equity to $227.1 million Consolidated Balance Sheets (Millions USD) | Indicator | 2021-12-31 | 2020-12-31 | | :--- | :--- | :--- | | Assets | | | | Cash and Cash Equivalents | $175.5 | $32.4 | | Accounts Receivable, Net | $78.4 | $24.9 | | Prepaid Expenses and Other Current Assets | $2.1 | $1.2 | | Total Current Assets | $256.0 | $58.4 | | Property and Equipment, Net | $12.7 | $9.1 | | Intangible Assets, Net | $10.7 | $10.7 | | Goodwill | $8.7 | $6.6 | | Restricted Cash | $3.6 | $2.0 | | Operating Lease Right-of-Use Assets | $4.2 | $5.0 | | Finance Lease Right-of-Use Assets | $9.3 | $7.0 | | Equity Method Investment | $0.6 | $0.0 | | Other Assets | $3.8 | $1.3 | | Total Assets | $309.6 | $100.2 | | Liabilities and Stockholders' Equity | | | | Accounts Payable | $15.8 | $4.0 | | Accrued Liabilities | $35.1 | $14.3 | | Line of Credit | $0.03 | $0.0 | | Notes Payable (Current) | $0.6 | $0.7 | | Due to Sellers | $1.6 | $1.1 | | Operating Lease Liabilities (Current) | $1.5 | $1.6 | | Finance Lease Liabilities (Current) | $3.3 | $1.9 | | Total Current Liabilities | $57.9 | $23.5 | | Notes Payable (Non-Current) | $1.3 | $0.6 | | Operating Lease Liabilities (Non-Current) | $3.0 | $3.6 | | Finance Lease Liabilities (Non-Current) | $6.9 | $5.5 | | Warrant Liability | $13.5 | $0.0 | | Total Liabilities | $82.5 | $33.2 | | Total Equity Attributable to DocGo Inc. Stockholders | $219.6 | $55.0 | | Non-Controlling Interests | $7.5 | $11.9 | | Total Stockholders' Equity | $227.1 | $66.9 | | Total Liabilities and Stockholders' Equity | $309.6 | $100.2 | Consolidated Statements of Operations and Comprehensive Income (Loss) DocGo achieved $318.7 million in net revenue in 2021, a substantial increase from $94.1 million in 2020, transitioning from a $14.8 million net loss in 2020 to a $19.2 million net income in 2021 Consolidated Statements of Operations and Comprehensive Income (Loss) (USD) | Indicator | 2021 | 2020 | | :--- | :--- | :--- | | Net Revenue | $318,718,580 | $94,090,658 | | Cost of Revenue | $208,971,062 | $62,743,607 | | Total Operating Expenses | $303,361,282 | $108,848,341 | | Operating Income/(Loss) | $15,357,298 | $(14,757,683) | | Total Other Income (Expense) | $4,437,887 | $125,914 | | Net Income/(Loss) Before Income Taxes | $19,795,185 | $(14,631,769) | | Income Tax Expense | $(615,697) | $(167,443) | | Net Income/(Loss) | $19,179,488 | $(14,799,212) | | Net Loss Attributable to Non-Controlling Interests | $(4,564,270) | $(439,268) | | Net Income/(Loss) Attributable to DocGo Inc. Stockholders | $23,743,758 | $(14,359,944) | | Other Comprehensive Income/(Loss) | $16,038 | $196,345 | | Total Comprehensive Income/(Loss) | $23,759,796 | $(14,163,599) | | Basic Net Income/(Loss) Per Share | $0.30 | $(0.25) | | Diluted Net Income/(Loss) Per Share | $0.25 | $(0.25) | - Total revenue for 2021 was $318.7 million, representing a 239% increase from 2020[425] - The company achieved net income of $19.18 million in 2021, compared to a net loss of $14.8 million in 2020[425] Consolidated Statements of Changes in Stockholders' Equity DocGo's stockholders' equity significantly increased in 2021, primarily due to net proceeds from common stock issuance related to the Motion merger, with total equity attributable to DocGo Inc. shareholders reaching $219.6 million Summary of Consolidated Statements of Changes in Stockholders' Equity (USD) | Indicator | 2021-12-31 | 2020-12-31 | | :--- | :--- | :--- | | Class A Common Stock | $10,013 | $0 | | Additional Paid-in Capital | $283,161,216 | $142,346,852 | | Accumulated Deficit | $(63,556,714) | $(87,300,472) | | Accumulated Other Comprehensive Loss | $(32,501) | $(48,539) | | Total Equity Attributable to DocGo Inc. Stockholders | $219,582,014 | $54,997,841 | | Non-Controlling Interests | $7,475,010 | $11,949,200 | | Total Stockholders' Equity | $227,057,024 | $66,947,041 | - In 2021, the company significantly increased stockholders' equity through a net increase of $114.6 million in additional paid-in capital from common stock issuance related to the Motion merger[428] - As of December 31, 2021, the accumulated deficit decreased from $87.3 million in 2020 to $63.56 million, reflecting profitability in 2021[428] Consolidated Statements of Cash Flows In 2021, DocGo used $1.9 million in operating cash and $8.6 million in investing cash, while financing activities provided $155.2 million, primarily from the Motion merger, resulting in a $144.6 million net increase in cash and restricted cash Consolidated Statements of Cash Flows (USD) | Cash Flow Category | 2021 | 2020 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | $(1,947,420) | $(10,654,692) | | Net Cash Flow from Investing Activities | $(8,589,185) | $(6,040,022) | | Net Cash Flow from Financing Activities | $155,206,476 | $(812,093) | | Effect of Exchange Rate Changes | $(21,414) | $196,345 | | Net Increase/(Decrease) in Cash and Restricted Cash | $144,648,457 | $(17,310,462) | | Cash and Restricted Cash at Beginning of Period | $34,457,273 | $51,767,735 | | Cash and Restricted Cash at End of Period | $179,105,730 | $34,457,273 | - Operating activities used $1.9 million in cash in 2021, primarily due to a $57.99 million increase in accounts receivable, partially offset by a $32.6 million increase in accounts payable and accrued liabilities[431][378] - Investing activities used $8.59 million in cash in 2021, primarily for the acquisition of property and equipment ($4.81 million) and business and intangible assets ($3.15 million)[431][380] - Financing activities provided $155.2 million in cash in 2021, primarily from $178.1 million in net proceeds from common stock issuance related to the Motion merger, partially offset by $2.2 million in finance lease obligation payments and $19.96 million in merger issuance costs[431][382] Notes to Consolidated Financial Statements This section provides detailed notes to the consolidated financial statements, covering company organization, significant accounting policies, balance sheet items, business segments, equity, stock-based compensation, leases, and subsequent events - The notes detail the organization and business operations of DocGo Inc. and its subsidiaries, including its role as a medical transportation and mobile health services company, and the merger with Motion Acquisition Corp[438][439][441] - Note 2 summarizes significant accounting policies, including principles of consolidation (for the variable interest entity MD1), foreign currency translation, use of estimates, concentrations