DocGo (US:DCGO)2022-05-09 16:00PART I - FINANCIAL INFORMATION Financial Statements This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2022, and 2021, including balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes Condensed Consolidated Financial Statements For Q1 2022, DocGo reported significant year-over-year revenue growth, primarily driven by its Mobile Health segment, achieving a net income of $9.4 million from a prior-year net loss, with increased total assets and cash reserves Condensed Consolidated Statement of Operations (Q1 2022 vs Q1 2021) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Revenue, net | $117,891,552 | $49,688,856 | | Income (loss) from operations | $10,094,565 | ($1,873,958) | | Net income (loss) | $9,372,437 | ($1,998,996) | | Net income (loss) attributable to stockholders | $10,629,694 | ($1,678,364) | | Net income (loss) per share - Basic | $0.11 | ($0.03) | | Net income (loss) per share - Diluted | $0.09 | ($0.03) | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | $188,353,909 | $175,537,221 | | Total current assets | $268,170,785 | $256,032,491 | | Total assets | $325,196,304 | $309,602,652 | | Total current liabilities | $60,992,489 | $57,875,921 | | Total liabilities | $84,931,995 | $82,545,628 | | Total stockholders' equity | $240,264,309 | $227,057,024 | Condensed Consolidated Statement of Cash Flows (Q1 2022 vs Q1 2021) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $18,264,682 | ($1,384,175) | | Net cash used in investing activities | ($1,137,040) | ($1,276,054) | | Net cash provided by (used in) financing activities | $2,496,798 | ($550,591) | | Net increase (decrease) in cash and restricted cash | $19,618,577 | ($3,202,822) | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's business operations, significant accounting policies, and specifics on financial statement line items, including reverse recapitalization accounting, revenue disaggregation, customer concentration, stock-based compensation, and COVID-19 impact - The company operates as a healthcare transportation and mobile health services provider in the US and UK, becoming a public company (DocGo Inc.) on November 5, 2021, after a merger with Motion Acquisition Corp, accounted for as a reverse recapitalization with Ambulnz, Inc. as the accounting acquirer283138 Revenue by Segment and Geography (Q1 2022 vs Q1 2021) | Category | Service Line | Q1 2022 Revenue | Q1 2021 Revenue | | :--- | :--- | :--- | :--- | | Segment | Transportation Services | $27,812,510 | $19,124,020 | | | Mobile Health | $90,079,042 | $30,564,836 | | Geography | United States | $115,053,431 | $47,681,374 | | | United Kingdom | $2,838,121 | $2,007,482 | | Total | | $117,891,552 | $49,688,856 | - The company has significant customer concentration, with two customers accounting for 34% and 19% of sales, respectively, for the quarter ended March 31, 202248 - The COVID-19 pandemic had a mixed impact, reducing non-emergency medical transport volumes but significantly boosting revenue through the company's Rapid Reliable Testing (RRT) subsidiary, part of the Mobile Health segment181182 - As of March 31, 2022, the company had $22.9 million in total unrecognized compensation related to unvested stock option awards, expected to be recognized over a weighted-average period of 3.58 years149 - The company recorded a liability of $1,000,000 for an agreed settlement related to various class-based claims under Federal and California State law, which is subject to court approval178 Management's Discussion and Analysis (MD&A) Management discusses the company's Q1 2022 performance, highlighting a 137% increase in total revenue to $117.9 million, driven by a 194% surge in Mobile Health services, achieving a net income of $9.4 million from a prior-year loss Results of Operations In Q1 2022, total revenues grew 137% to $117.9 million, with Mobile Health revenue increasing 194% to $90.1 million and Transportation Services revenue growing 46% to $27.8 million, leading to improved gross margin and an operating income of $10.1 million Consolidated Results of Operations (in Millions) | Metric | Q1 2022 | Q1 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenues, net | $117.9 | $49.7 | $68.2 | 137% | | Cost of revenue | $78.0 | $35.9 | $42.1 | 117% | | Income/(loss) from operations | $10.1 | ($1.9) | $12.0 | N/A | | Net income (loss) | $9.4 | ($2.0) | $11.4 | N/A | - Mobile Health revenue surged by 194% to $90.1 million, primarily due to the expansion of COVID-19 related testing and other healthcare services224 - Transportation Services revenue increased by 46% to $27.8 million, driven by a 5% rise in trip volumes and a significant increase in the average price per trip from $283 to $353223 - Cost of revenue as a percentage of revenue decreased to 66.2% from 72.2% in Q1 2021, indicating improved gross margin despite increased absolute costs for labor, supplies, and fuel225 Liquidity and Capital Resources The company's liquidity position is strong, with cash of $188.4 million and working capital of $207.2 million as of March 31, 2022, primarily due to November 2021 merger proceeds and $18.2 million in cash generated from operations - The company received net proceeds of approximately $158.1 million from its merger in November 2021, significantly bolstering its liquidity240 Working Capital (in Millions) | Metric | March 31, 2022 | March 31, 2021 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Current Assets | $268.2 | $62.7 | $205.5 | 328% | | Current Liabilities | $61.0 | $31.0 | $30.0 | 97% | | Total working capital | $207.2 | $31.7 | $175.5 | 554% | - Net cash provided by operating activities was $18.2 million for Q1 2022, a significant improvement from the $1.4 million used in Q1 2021, driven by net income and favorable working capital changes246 Critical Accounting Policies This section outlines the company's most critical accounting policies, which involve significant judgments and estimates, including the basis of presentation (reverse recapitalization), consolidation of a Variable Interest Entity (VIE), business combinations, goodwill impairment testing, revenue recognition, and income taxes - The merger with Motion Acquisition Corp. was accounted for as a reverse recapitalization, with Ambulnz, Inc. treated as the accounting acquirer256 - The company consolidates MD1 Medical Care P.C., a Variable Interest Entity (VIE), because it has the power to direct its activities and absorbs its losses258 - Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment annually on December 31, or more frequently if events indicate potential impairment264266 Quantitative and Qualitative Disclosures about Market Risk The company is classified as a smaller reporting company and is therefore not required to provide the disclosures typically found under this item - As a smaller reporting company, DocGo is exempt from the requirement to provide quantitative and qualitative disclosures about market risk273 Controls and Procedures Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of March 31, 2022, with no material changes to internal control over financial reporting identified during the quarter - Management concluded that the company's disclosure controls and procedures are effective in ensuring timely and accurate reporting274 - There were no changes during the quarter ended March 31, 2022, that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting275 PART II - OTHER INFORMATION Legal Proceedings & Risk Factors The company is involved in legal proceedings arising in the ordinary course of business, and while most risk factors remain unchanged from the 2021 Form 10-K, a new risk related to inflation has been highlighted due to increasing costs compressing gross margins - The company is subject to legal proceedings and government information requests that arise in the ordinary course of business277278 - A new inflation rate risk has been identified, noting that the high inflation rate in Q1 2022 (reaching 8.5% in March) has increased expenses for wages, fuel, and medical supplies, compressing gross profit margins280 Other Disclosures (Items 2, 3, 4, 5, 6) This section confirms there were no unregistered sales of equity securities, no defaults upon senior securities, and no other material information to report during the period, with a list of exhibits filed with the 10-Q provided - The company reports no unregistered sales of equity securities, defaults on senior securities, mine safety disclosures, or other information for the quarter280281282283