What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-10 compared with 2021-11-15 · 653 added, 185 removed, 2 unchanged (100% of the section changed)

Discussion and Analysis of Financial Condition and Results of Operations.

References to the

“Company,” “our,” “us” or “we” refer to Motion Acquisition Corp.

The following discussion

and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed

consolidated financial statements and the notes thereto contained elsewhere in this report.

Certain information contained in the

discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Cautionary Note Regarding

Forward-Looking Statements

This Quarterly Report

on Form 10-Q may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section

21E of the Exchange Act.

These forward-looking statements, if any, are subject to known and unknown risks, uncertainties and assumptions

about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future

results, levels of activity, performance or achievements expressed or implied by such forward-looking statements.

In some cases, you can

identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,”

“expect,” “plan,” “anticipate,” “believe,” “estimate,” “continue,”

or the negative of such terms or other similar expressions.

Factors that might cause or contribute to such a discrepancy include, but

are not limited to, those described in our other SEC filings.

We are a blank check

company incorporated as a Delaware corporation on August 11, 2020 for the purpose of effecting a merger, share exchange, asset acquisition,

stock purchase, reorganization or similar business combination with one or more businesses.

On October 19, 2020, we consummated our initial

public offering (“Initial Public Offering”) of units (the “Units” and, with respect to the Class A common

stock included in the Units, the “Public Shares” and with respect to the warrants included in the Units, the “Public

Warrants”) and simultaneous private placement (“Private Placement”) of warrants (“Private Placement Warrants”),

which is summarized in Note 3 to the accompanying unaudited condensed consolidated financial statements.

Upon the closing of the Initial

Public Offering and the Private Placement, $115.0 million ($10.00 per Unit) of the net proceeds of the sale of the Units in the Initial

Public Offering and Private Placement Warrants in the Private Placement were placed in a trust account (“Trust Account”)

located in the United States with Continental Stock Transfer & Trust Company acting as trustee.

As more fully described

in Note 1 to the accompanying unaudited condensed consolidated financial statements, on March 8, 2021, the Company entered into a merger

agreement (the “Merger Agreement”) with Ambulnz, Inc.

dba DocGo (“DocGo”) pursuant to which DocGo would merge

with and into a newly incorporated subsidiary of the Company (the “Merger”), with DocGo being the surviving entity of the

Merger and becoming a wholly-owned subsidiary of the Company.

Concurrently with the execution of the Merger Agreement, we entered into

a series of subscription agreements with accredited investors providing for the purchase by such investors of an aggregate of 12,500,000 shares

of Class A common stock at a price per share of $10.00, for gross proceeds of $125 million (collectively, the “PIPE”).

closing of the PIPE was conditioned upon the consummation of the Merger.

The Merger and the PIPE were consummated on November 5, 2021

following the receipt of required approval by the stockholders of the Company and DocGo, required regulatory approvals, and the fulfillment

of other conditions.

Our amended and restated certificate of incorporation

provides that we had until October 19, 2022 (24 months from the closing of our Initial Public Offering) to complete our initial business

If we had been unable to complete our initial business combination within such period and stockholders did not otherwise

approve an amendment to our charter to extend such date, we would have been required to:

(i) cease all operations except for the purpose

of winding up, (ii) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the Public Shares, at a per-share

price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account including interest earned on the funds held

in the Trust Account and not previously released to us to pay our taxes (less up to $100,000 of interest to pay dissolution expenses),

divided by the number of then outstanding Public Shares, which redemption would have completely extinguished public stockholders’

rights as stockholders (including the right to receive further liquidating distributions, if any).

There are no redemption rights or liquidating

distributions with respect to our warrants, which would have expired worthless if we had failed to complete our initial business combination

within the 24-month time period.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context requires otherwise, references

to “DocGo,” “we,” “us,” “our” and “the Company” in this section are to the

business and operations of DocGo Inc.

The following discussion and analysis should be read in conjunction with DocGo’s Condensed

Consolidated Financial Statements and related notes thereto included in this Quarterly Report on Form 10-Q.

In addition to historical

information, this discussion contains forward-looking statements that involve risks, uncertainties, and assumptions that could cause DocGo’s

actual results to differ materially from management’s expectations.

Factors that could cause such differences are discussed herein

and under the caption, “Cautionary Note Regarding Forward-Looking Statements.”

Certain figures, such as interest rates and

other percentages, included in this section have been rounded for ease of presentation.

Percentage figures included in this section have

not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding.

For this reason,

percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in DocGo’s

Condensed Consolidated Financial Statements or in the associated text.

Certain other amounts that appear in this section may similarly

not sum due to rounding.

Note Regarding Forward-Looking Statements

Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as

amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other

things, the plans, strategies and prospects, both business and financial, of the Company.

These statements are based on the beliefs and

assumptions of our management.

Although the Company believes that its plans, intentions and expectations reflected in or suggested by

these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions

or expectations.

Generally, statements that are not historical facts, including statements concerning possible or assumed future actions,

business strategies, events or results of operations, are forward-looking statements.

These statements may be preceded by, followed by

or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,”

“may,” “will,” “should,” “seeks,” “plans,” “scheduled,” “anticipates,”

“intends” or similar expressions.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions.

More information regarding the risks and uncertainties and other important factors that could cause actual results to differ materially

from those in the forward-looking statements is set forth under the heading “Risk Factors” in Part I, Item 1A.

Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the Securities and Exchange Commission (the “SEC”)

on March 15, 2022 (the “2021 Form 10-K”), and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q.

Forward-looking statements are not guarantees of future performance and speak only as of the date hereof.

We undertake no obligation

to update or revise publicly any forward-looking statements, whether because of new information, future events, or otherwise, except

as required by law.

which was originally incorporated in 2015, is a healthcare transportation and mobile services company that uses proprietary dispatch and

communication technology to provide quality healthcare transportation and mobile, in-person medical treatment directly to patients

in the comfort of their homes, workplaces and other non-traditional locations, in major metropolitan cities in the United States

and the United Kingdom.

Company derives revenue primarily from its two operating segments:

Transportation Services and Mobile Health services.

Transportation

The services offered by this segment encompass both emergency response and non-emergency transport services.

Non-emergency transport

services include ambulance transports and wheelchair transports.

Net revenue from Transportation Services is derived from the transportation

of patients based on billings to third party payors and healthcare facilities.

Health Services:

The services offered by this segment include services performed at home and offices, COVID-19 testing,

and event services which include on-site healthcare support at sporting events and concerts.

Note 10, “Business Segment Information” to the Condensed Consolidated Financial Statements for additional information regarding

DocGo’s segments.

the three months ended March 31, 2022, the Company recorded net income of $9.4 million, compared to a net loss of $2.0 million in the

three months ended March 31, 2021.

spread of COVID-19 and the related shutdowns and restrictions have had a mixed impact on our business.

In the ambulance transportation

business, which comprises of, predominantly, non-emergency medical transport, the Company experienced a decline in transportation

volumes versus historical levels, as elective surgeries and other non-emergency surgical procedures were postponed or cancelled.

In addition, the Company experienced lost revenue associated with sporting, concerts and other events, as those events were either cancelled

or have experienced a significantly restricted number of permitted attendees.

are two areas where the Company experienced positive business impacts from COVID-19.

In April and May 2020, the Company participated

in an emergency project with Federal Emergency Management Agency in the New York City area.

This engagement resulted in incremental

transportation revenue that partially offset some of the lost non-emergency transport revenues.

In addition, in response to the need

for widespread COVID-19 testing and available EMTs and paramedics, the Company expanded its operations to include Rapid Reliable

Testing (“RRT”), with the goal of performing COVID-19 tests at nursing homes, municipal sites, businesses, schools and

other venues.

RRT is part of the Mobile Health business line.

Mobile Health generated approximately $90.1 million in revenue in the

three months ended March 31, 2022, as compared to $30.6 million in the first quarter of 2021.

2020 and the early part of 2021, the Company continued to operate with several back-office employees working remotely.

the Company has not witnessed any degradation in productivity from these employees, the large majority of whom have now returned to their

respective offices, and our operations have proceeded without major interruption.

By early 2021, nearly all remote employees had returned

to work in their respective offices and other locations.

DocGo also utilized several government programs in 2020 related to the pandemic,

receiving approximately $1.0 million in payments through the Public Health and Social Services Emergency Fund authorized under the

Coronavirus Aid, Relief and Economic Security Act and related legislation as well as various state and local programs, net of amounts

that will be repaid to HHS.

DocGo also received accelerated Medicare payments of approximately $2.4 million that were required

to be repaid beginning in April 2021.

Through March 31, 2022, approximately $2.2 million of this advance had been recouped

by Medicare .

it is very difficult to accurately predict the future direction of the effects of the COVID-19 pandemic, and the related impact on

medical transportation levels, the revenue from the Transportation Services segment during 2021 exceeded that of 2020 by approximately

Since the beginning of 2021, trip volumes in most of our markets have started to return to more normal historical levels.

generated, during 2021, COVID-19 testing revenue, including its Mobile Health services segment, above the levels projected, and this

persisted in the first quarter of 2022.

The Company estimates that COVID-19 testing revenue in the first quarter of 2022 amounted to approximately

In a broader, strategic sense, the consumer focus on Mobile Health services and the formation of RRT, and its emergence as

a significant contributor to overall revenues have accelerated the diversification in the Company’s business by more rapid expansion

of the Mobile Health segment.

Company’s current business plan assumes gradual recovery of industry-wide transportation volumes to historical levels, plus an increased

demand for mobile health services, a demand that was accelerated by the pandemic, but which is also being driven by longer-term secular

factors, such as the increasing desire on the part of patients to receive treatments outside of traditional settings, such as doctor’s

offices and hospitals.

However, given the unpredictable, unprecedented, and fluid nature of the pandemic and its economic consequences,

we are unable to predict the duration and extent to which the pandemic and its related positive and negative impacts will affect our business,

financial condition, and results of operations in future periods.

Affecting Our Results of Operations

operating results and financial performance are influenced by a variety of factors, including, among others, obtaining operating licenses,

acquisitions, conditions in the healthcare transportation and mobile health services markets and economic conditions generally, availability

of healthcare professionals, changes in the cost of labor, and production schedules of our suppliers.

Some of the more important factors

are briefly discussed below.

Future revenue growth and improvement in operating results will be largely contingent on DocGo’s ability

to penetrate new markets and further penetrate existing markets, which is subject to a number of uncertainties, many of which are beyond

DocGo’s control.

The COVID-19 pandemic has also significantly impacted DocGo’s business, as discussed above.

has historically pursued a strategy of applying for ambulance operating licenses in the states, counties and cities, identified for future

new market entry.

The approval of a new operating license may take an extended period of time.

DocGo reduces this risk through its acquisition

strategy by identifying businesses and/or underlying licenses in these new markets that may be for sale.

Historically,

DocGo has pursued an acquisition strategy to obtain ambulance operating licenses from small operators.

Future acquisitions may also include

larger companies that may help drive revenue, profitability, cash flow and stockholder value.

DocGo did not complete any acquisitions

during the three months ended March 31, 2022.

During the 12 months ended December 31, 2021, DocGo completed one acquisition,

for a purchase price of $2.3 million, which contributed approximately $0.3 million to 2021 revenues.

During the 12 months ended

December 31, 2020, DocGo completed one acquisition, for a purchase price of $0.8 million, which contributed approximately $0.1 million

to 2020 revenues.

Healthcare Services

transportation services market is highly dependent on patients requiring transportation after surgeries and other medical procedures

and treatments.

During the pandemic, DocGo experienced a decrease in transportation volumes as a result of fewer elective surgeries.

However, the Company was able to reallocate assets to locations where demand increased as a result of the pandemic.

Overall Economic Conditions

in the Markets In Which We Operate

changes both nationally and locally in our markets may impact our financial performance.

Unfavorable changes in demographics, health care

coverage of transportation and mobile health services, interest rates, ambulance manufacturing, a weakening of the national economy or

of any regional or local economy in which we operate and other factors beyond our control could adversely affect our business.

Volumes and Average Trip Price

“trip” is defined as an instance where the Company completes the transportation of a patient to a specific destination, for

which we are able to charge a fee.

This metric does not include instances where a trip is ordered and subsequently either canceled (by

the customer) or declined (by the Company).

As trip volume represents the most basic unit of transportation service provided by the Company,

it is the best measure of the level of demand for the Company’s Transportation Services, and is used by management to monitor and

manage the scale of the business.

average trip price is calculated by dividing the aggregate revenue from completed transports (“trips”) by the total number

of transports, and is an important indicator of the effective rate at which the Company is being compensated for its provision of Transportation

generated from programs under which DocGo is paid a fixed rate for the use of a fully staffed and equipped ambulance do not factor in

the trip counts or average trip prices mentioned above.

Our Ability to Control

pay close attention to the management of our working capital and operating expenses.

Some of our most significant operating expenses are

labor costs, medical supplies and vehicle-related costs, such as fuel, maintenance, repair and insurance.

Insurance costs include

premiums paid for coverage as well as reserves for estimated losses within the Company’s insurance policy deductibles.

our proprietary technology to drive improvements in productivity per transport.

We regularly analyze our workforce productivity to achieve

the optimum, cost-efficient labor mix for our locations.

Beginning in April 2021, the

inflation rate in the US, as measured by the Consumer Price Index (CPI) has steadily increased.

In 2019, the inflation rate was approximately

1.8%, while it dropped to approximately 1.2% in 2020.

These data are reported monthly, showing year-over-year changes in prices across

a basket of goods and services.

For 2021, inflation increased from the 1.4%-2.6% range in the first quarter, to 4.2% in April, and was

in the 5.0% area through the end of the third quarter of 2021, before increasing to the 6.0%-7.0% range in the fourth quarter.

full year, the inflation rate was 4.7% in 2021, the highest annual rate since the 5.4% rate recorded in 1990.

The inflation rate continued

to increase throughout the first quarter of 2022, reaching approximately 8.5% in March 2022.

The increased inflation rate has had an impact

on the Company’s expenses in several areas, including wages, fuel and medical and other supplies.

This has had the impact of compressing

gross profit margins, as the Company is generally unable to pass these higher costs on to its customers, particularly in the short term.

Looking to the rest of 2022, we anticipate a moderation of the inflation rate when compared to the first quarter of the year but expect

that inflation will remain above the levels seen in the previous 10 years, when the annual inflation rate ranged from 0.1% to 2.4%.

inflation is above the levels that the Company anticipates in 2022, gross margins could be below plan and our business, operating results

and cash flows may be adversely affected.

Investing in R&D

and Enhancing Our Customer Experience

performance is dependent on the investments we make in research and development, including our ability to attract and retain highly skilled

research and development personnel.

We intend to continually develop and introduce innovative new software services, integrate with third-party products

and services, mobile applications and other new offerings.

If we fail to innovate and enhance our brand and our products, our market position

and revenue will likely be adversely affected.

is subject to federal, state and local regulations including healthcare and emergency medical services laws and regulations and tax laws

and regulations.

The Company’s current business plan assumes no material change in these laws and regulations.

In the event that

any such change occurs, compliance with new laws and regulations may significantly affect the Company’s operations and cost of doing

of Results of Operations

business consists of two reportable segments — Transportation Services and Mobile Health services.

The Company evaluates

the performance of both segments based primarily on results of its operations.

Accordingly, other income and expenses not included in

results from operations are only included in the discussion of consolidated results of operations.

Company’s revenue consists of services provided by its ambulance Transportation Services segment and its Mobile Health segment.

of revenues consists primarily of revenue generating wages paid to employees, vehicle insurance costs (including insurance premiums and

costs incurred under the insurance deductibles), maintenance, and fuel related to Transportation Services, and laboratory fees, facility

rent, medical supplies and subcontractors.

We expect cost of revenue to continue to rise in proportion to the expected increase in revenue.

Operating Expenses

and administrative expenses

and administrative expense consists primarily of salaries, bad debt expense, insurance expense, consultant fees, and professional fees

for accounting services.

We expect our general and administrative expense to increase as we scale up headcount with the growth of our

business, and as a result of operating as a public company, including compliance with SEC rules and regulations, audit, additional insurance

expenses, investor relations activities, and other administrative and professional services.

and Amortization

depreciates its assets using the straight-line method over the estimated useful lives of the respective assets.

Amortization of

intangibles consists of amortization of definite-lived intangible assets over their respective useful lives.

and Regulatory

and regulatory expenses include legal fees, consulting fees related to healthcare compliance, claims processing fees and legal settlements.

and Development

and development expense, net of capitalization, consists primarily of cost incurred in the design and development of DocGo’s proprietary

technology, third-party software and technologies.

We expect technology and development expense to increase in future periods to

support our growth, including our intent to continue investing in the optimization, accuracy and reliability of our platform and drive

efficiency in our operations.

These expenses may vary from period to period as a percentage of revenue, depending primarily upon when

we may choose to make more significant investments.

Sales, Advertising

and Marketing

sales and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include sales

commissions, marketing programs, trade shows, and promotional materials.

We expect that our sales and marketing expenses will continue

to increase over time as we increase our marketing activities, grow our domestic and international operations, and continue to build

brand awareness.

expense consists primarily of interest on our outstanding borrowings under our outstanding notes payable and financing obligations.

of Operations

of the three months ended March 31, 2022 and March 31, 2021

Three Months Ended

$ in Millions

Revenues, net

Cost of revenue

Operating expenses

General and administrative

Depreciation and amortization

Legal and regulatory

Technology and development

Sales, advertising and marketing

Total expenses

Income/(loss) from operations

Other income (expenses)

Interest income (expense), net

Gain (loss) on remeasurement of warrant liabilities

Gain (loss) on initial equity method investment

Total other expense

Net income/(loss) before income tax

Income tax (expense) benefit

Net income (loss)

Net income (loss) attributable to Non-controlling interests

Net income (loss) attributable to the shareholders of DocGo Inc and Subsidiaries

the three months ended March 31, 2022, total revenues were $117.9 million, an increase of $68.2 million, or 137%, from the total revenues

recorded in the three months ended March 31, 2021.

Transportation

For the three months ended

March 31, 2022, Transportation Services revenue totaled $27.8 million and increased by $8.8 million, or 46%, as compared with the three

months ended March 31, 2021.

This increase was due to increases in both transportation trip volumes and the average price per trip.

increased by approximately 5%, from 46,012 trips for the three months ended March 31, 2021, to 48,110 trips for the three months ended

March 31, 2022.

The increase in trip volumes is due to a combination of growth in the customer base in certain core markets and entry

into new markets in 2021.

Our average trip price increased from $283 in the three months ended March 31, 2021, to $353 in the three months

ended March 31, 2022.

The increase in the average trip price in the 2022 period reflects a shift in mix toward higher-priced transports,

as well as a shift in the customer (payer) mix towards higher-priced transports.

The average trip price also benefited from a 5.1% increase

in the average Medicare reimbursement rate for ambulance transports.

Transportation Services revenues were also driven higher in the first

quarter of 2022 by a 201% increase in revenues generated from programs under which DocGo is paid a daily or hourly “standby”

rate for the use of a fully staffed and equipped ambulance, which were driven by new customer acquisition and large new projects.

services do not factor in the trip counts or average trip prices mentioned above.

For the three months ended

March 31, 2022, Mobile Health revenue totaled $90.1 million, an increase of $59.4 million, or 194%, as compared with the three months

ended March 31, 2021.

This significant increase was mainly due to the expansion of the services offered by this segment, particularly

with respect to COVID-19 related testing and vaccination and other healthcare services revenues included in the Mobile Health segment.

This expansion accelerated through 2021 and into 2022 as the Company increased its customer base and geographic reach, while extending

several large customer contracts and introducing a broader range of services.

For the three months ended

March 31, 2022, total cost of revenue (exclusive of depreciation and amortization) increased by 117%, as compared to the three months

ended March 31, 2021, while revenue increased by approximately 137%.

Cost of revenue as a percentage of revenue decreased to 66.2% in

the first quarter of 2022 from 72.2% in the first quarter of 2021.

In absolute dollar terms,

total cost of revenue in the three months ended March 31, 2022 increased by $42.1 million from the levels of the three months ended March

This was primarily attributable to an $11.7 million increase in total compensation, reflecting higher headcount for both the

Transportation Services and Mobile Health segments;

a $22.6 million increase in subcontracted labor, driven mostly by the Mobile Health

segment, where revenue increases outpaced the Company’s ability to service such revenue solely with internal resources, temporarily

causing the Company to rely increasingly on subcontracted labor;

a $6.5 million increase in medical supplies, due to the purchase of COVID-19

test kits and the need for increased personal protective equipment (PPE) and related supplies, and the increased cost thereof as a result

of increased demand during the pandemic;

and a $3.2 million increase in vehicle costs, driven by a continued increase in the Company’s

vehicle fleet and higher fuel and maintenance costs;

and a $2.4 million increase in facilities and other costs of sales, relating to the

Company’s increased scale and geographic presence.

These items were partially offset by a $4.2 million decrease in lab fees related

to COVID-19 testing activity, reflecting lower per-test lab fees, and a shift toward rapid tests.

For the Transportation Services

segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended March 31, 2022 amounted to $21.5 million,

up $6.8 million, or 46%, from the three months ended March 31, 2021.

Cost of revenues as a percentage of revenues was unchanged at 77.3%

in both periods, as the impact of higher per-trip prices, increased number of standby contracts (for which we are paid a daily or hourly

rate) and the overall increase in revenue was offset by the impact of higher hourly wages in certain markets and increased overtime for

field employees, and increased fuel costs, as described above.

For the Mobile Health segment,

cost of revenues (exclusive of depreciation and amortization) in the three months ended March 31, 2022 amounted to $56.5 million up 167%

from $21.2 million in the three months ended March 31, 2021.

Cost of revenues as a percentage of revenues decreased to 62.7% from 69.0%,

due to the increase in revenues, lower average per-test lab fees and the increased number of higher-margin, hourly-based programs in the

first quarter of 2022, which outweighed the increased use of higher cost subcontracted labor and significant increases in medical and

general supply costs, as described above.

Operating Expenses

For the three months ended

March 31, 2022, the Company recorded $29.8 million of operating expenses compared to $15.7 million for the three months ended March 31,

2021, an increase of 90%.

As a percentage of revenue, operating expenses declined from 31.6% in the first quarter of 2021 to 25.3% in

the first quarter of 2022, due primarily to the significant increase in overall revenues described above, coupled with the semi-fixed

nature cost of the corporate infrastructure.

The increase of $14.1 million related primarily to a $10.4 million increase in payroll due

to investments in and expansion of corporate infrastructure to support the revenue growth;

a $0.5 million increase in sales and marketing

cost, driven by higher sales commissions and increased marketing activity arising from the expansion of the Mobile Health segment;

million increase in travel and entertainment expenses, reflecting both the growth of the overall employee base, as well as increased business

development related activities for both the Transportation Services and Mobile Health segments;

a $0.6 million increase in depreciation

and amortization due to an increase in assets to support revenue growth and capitalized software amortization;

a $1.0 million increase

in legal, accounting and other professional fees related to increased revenue and related contract generation, Directors and Officers

insurance and SEC filing-related costs;

a $0.5 million increase in office-related expenses, owing to the Company’s ongoing growth

and geographic expansion;

a $0.5 million increase in IT infrastructure, driven by the Company’s business and headcount expansion;

a $0.5 million increase in bad debt expense, in line with the increase in overall revenues during the period.

These were partially offset

by a $0.7 million net decline in insurance expenses, reflecting the Company’s new captive insurance program for automobile and workers

compensation insurance.

For the Transportation Services

segment, operating expenses in the three months ended March 31, 2022 were $15.6 million, up $7.0 million, or 82%, from the three months

ended March 31, 2021.

Operating expenses as a percentage of revenues increased to 56.1% from 45.2% in the prior year period, despite the

increase in Transportation Services revenues, due to a significant increase in corporate infrastructure, all of which is allocated to

the Transportation Services segment.

The increased operating expenses, in dollar terms, in the three months ended March 31, 2022 primarily

reflected higher costs for payroll, travel and entertainment, professional fees and depreciation, as described above.

For the Mobile Health segment, operating expenses in the three months

ended March 31, 2022 were $14.2 million, compared to operating expenses of $7.1 million in the three months ended March 31, 2021.

expenses as a percentage of revenues decreased to 15.7% from 23.1% in 2020, despite significant expenditures made in the expansion of

services and geographic areas of operation, as well as the buildout of the Mobile Health management infrastructure throughout 2021 and

the early part of 2022, due to the faster rate of increase in Mobile Health revenues.

The increased operating expenses, in dollar terms,

in 2021 were primarily driven by higher costs for payroll, subcontracted labor costs, travel and entertainment, marketing and IT infrastructure, and facilities costs, as described above.

Income/(Expense), Net

For the three months ended

March 31, 2022, the Company recorded $135,606 of net interest expense compared to $115,009 of interest expense in the three months ended

March 31, 2021.

The increase in net interest expense in the current period reflects an increase in payments made for leased vehicles,

as the Company’s fleet expanded.

This outweighed the impact of higher interest income in the 2022 period, resulting from an increase

in the Company’s cash balances in income-bearing accounts.

Gain/(loss) on Remeasurement of Warrant Liabilities

During the three months ended

March 31, 2022, the Company recorded a loss of $58,749 from the remeasurement of warrant liabilities, The warrants are marked-to-market

in each reporting period, and this gain reflects the decline in DocGo’s stock price relative to the beginning of the period.

gain or loss was recorded in relation to the remeasurement of warrant liabilities in the first quarter of 2021.

Gain/(Loss) on Equity Method Investment

During the three months ended

March 31, 2022, the Company recorded a loss of $83,341 representing its share of the losses incurred by an entity in which the Company

has a minority interest, which is accounted for under the equity method.

This investment was made in the second half of 2021, and as such,

no gain or loss was recorded in relation to an equity method investment in the first quarter of 2021.

Income Tax (Expense)/Benefit

During the three months ended

March 31, 2022, the Company recorded income tax expense of $0.4 million, compared to an income tax expense of $10,029 in the three months

ended March 31, 2021.

The increase in income tax expense resulted from the higher level of pretax income as well as state income taxes

in jurisdictions the Company entered during the past year.

Noncontrolling

For the three months ended

March 31, 2022, the Company had a net loss attributable to noncontrolling interest of approximately $1.3 million, compared to a net loss

attributable to noncontrolling interest of $0.3 million for the three months ended March 31, 2021.

The increased loss reflected ongoing

investments in new markets that were entered into during 2021.

Liquidity and Capital Resources

As of September 30, 2021,

we had approximately $60,000 of cash in our operating bank account and approximately $47,000 of negative working capital.

Until the time of our

Initial Public Offering on October 19, 2020, our liquidity needs were satisfied through a payment of $25,000 from our Chief Executive

Officer to fund certain offering costs in exchange for the issuance of shares of Class B common stock, par value $0.0001 per share

(the “Founder Shares”) to Motion Acquisition LLC, a Delaware limited liability company (the “Sponsor”), and

advances to us from our Sponsor of approximately $71,000 under a related party note payable to pay for other offering costs in connection

with the Initial Public Offering.

Subsequent to October 19, 2020 through September 30, 2021, our liquidity needs were satisfied from the

net proceeds of the consummation of the Private Placement not held in the Trust Account.

We fully repaid the note payable on October 19,

In addition, in order to finance transaction costs in connection with a business combination, our officers, directors and initial

stockholders could have provided us with loans (“Working Capital Loans”), although they were not required to do so.

30, 2021 and as of the closing of the Business Combination, there were no Working Capital Loans outstanding.

We used substantially

all of the funds held in the Trust Account to complete the Business Combination.

Funds held in the Trust Account were also used to fund

the redemption of Class A common stock.

We had sufficient

cash on hand to fund operations through the date of the Business Combination on November 5, 2021.

Subsequent to the Business

Combination management believes that we will be able to fund current and foreseeable liquidity needs with cash on hand and cash

generated from operations.

Revision to Previously Reported Financial Statements

As discussed in Note 2 to the accompanying unaudited

condensed consolidated financial statements, the Company revised its previously filed financial statements to classify all of its Class

A common stock that is subject to possible redemption as temporary equity and to recognize accretion from the initial book value to redemption

value at the time of its Initial Public Offering, in accordance with ASC 480.

The impact of the revision to the audited consolidated balance

sheet as of December 31, 2020 and the unaudited consolidated balance sheets at March 31, 2021 and June 30, 2021 were reclassifications

of $17.2 million, $15.2 million and $18.2 million, respectively, from total stockholders’ equity (deficit) to Class A common stock subject

to possible redemption in temporary equity.

There was no impact to the reported amounts for total assets, total liabilities, cash flows,

or net income (loss).

Results of Operations

Our entire activity since

inception on August 11, 2020 through September 30, 2021 was in preparation for our formation, our Initial Public Offering, and, since

consummating our Initial Public Offering, the search for business combination candidates and negotiating the terms of a merger with our

selected target company.

We did not generate any revenues prior to the consummation of the Business Combination.

For the three months ended September 30, 2021, we had net income of

approximately $0.5 million, which included non-operating income of approximately $0.9 million arising from the change in fair value

of warrant liabilities and general and administrative expenses totaling approximately $0.3 million.

For the nine months ended September 30, 2021, we had a net loss of

approximately $0.5 million, which included non-operating income of approximately $0.4 million arising from the change in fair value

of warrant liabilities and general and administrative expenses totaling approximately $1.0 million.

Contractual Obligations

Registration Rights

The Sponsor is entitled to registration rights

pursuant to a registration rights agreement.

The Sponsor will be entitled to make up to three demands, excluding short form registration

demands, that we register the Founder Shares and Private Placement Warrants.

In addition, the Sponsor has “piggy-back” registration

rights to include its securities in other registration statements filed by us.

We will bear the expenses incurred in connection with the

filing of any such registration statements.

Commitments and Other Obligations

As of September 30, 2021, we did not have any

lease obligations or purchase commitments, and we had no long-term liabilities other than the warrant liabilities of $8.6 million and

the deferred underwriting commission of $4.0 million that was payable from the Trust Account upon consummating our initial business combination.

In addition, upon consummation of the Merger described herein, we were obligated to pay an M&A advisory fee to Barclays Capital Inc.

from the Trust Account in the amount of approximately $3.0 million.

Critical Accounting Policies

The preparation of financial statements in accordance

with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the

amounts reported in the financial statements and accompanying notes.

Actual results could differ from those estimates.

The Company has

identified the following as its critical accounting policies:

Derivative Warrant Liabilities

We account for the warrants

issued in connection with our Initial Public Offering and Private Placement in accordance with the guidance contained in ASC 815-40, under

which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities.

Accordingly, we classify the warrants

as liabilities and adjust the warrants to fair value at each reporting period.

This liability is subject to re-measurement at each balance

sheet date until exercised and any change in fair value is recognized in our statement of operations.

The fair value of the warrants was

determined using Monte Carlo simulations at the Initial Public Offering date and at December 31, 2020, and subsequently by reference to

the quoted price of the Public Warrants on the Nasdaq Stock Market.

Redeemable Shares

We account for our Class A

common stock subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity.”

Shares of Class A common stock subject to mandatory redemption (if any) are classified as liability instruments and are measured at fair

Shares of conditionally redeemable Class A common stock (including Class A common stock that feature redemption rights that are

either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control)

are classified as temporary equity.

In all other circumstances, our shares of Class A common stock are classified within stockholders’

Prior to the consummation of the Business Combination, our Public Shares featured certain redemption rights that were considered

to be outside of our control and subject to the occurrence of uncertain future events.

Accordingly, at both September 30, 2021 and December

31, 2020, 11,500,000 shares of Class A common stock subject to possible redemption were classified as temporary equity in the accompanying

condensed consolidated balance sheets, outside of the stockholders’ equity section.

Immediately upon the closing

of the Initial Public Offering, we recognized the accretion from initial book value to redemption amount value.

The change in the carrying

value of shares of the redeemable Class A common stock resulted in charges against additional paid-in capital and accumulated deficit.

Off-Balance Sheet

As of September 30, 2021,

we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

The Jumpstart Our Business

Startups Act of 2012 (the “JOBS Act”) contains provisions that, among other things, relax certain reporting requirements for

qualifying public companies.

We qualify as an “emerging growth company” and under the JOBS Act are allowed to comply with

new or revised accounting pronouncements based on the effective date for private (not publicly traded) companies.

We are electing to delay

the adoption of new or revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the

relevant dates on which adoption of such standards is required for non-emerging growth companies.

As a result, the unaudited condensed

consolidated financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public

company effective dates.

Additionally, we are

in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.

certain conditions set forth in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we

may not be required to, among other things, (i) provide an auditor’s attestation report on our system of internal controls over

financial reporting pursuant to Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth

public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted

by the PCAOB regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about

the audit and the financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation related items

such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to median employee

compensation.

These exemptions will apply for a period of five years following the completion of our Initial Public Offering or until

we are no longer an “emerging growth company,” whichever is earlier.

Since inception, DocGo has

completed three equity financing transactions that served as the Company’s principal source of liquidity, with minimal debt incurred.

Generally, the Company utilized equity raised to finance operations during its development phase, investments in assets, ambulance operating

licenses and funding working capital.

The Company has also funded these activities through operating cashflows.

In November 2021, upon

the completion of the merger between Motion Acquisition Corp.

and Ambulnz, Inc., the Company received proceeds of approximately $158.1

million, net of transaction expenses.

Although the Company generated positive net income in the three months ended March 31, 2022, operating

cash flows may not be sufficient to meet immediate obligations arising from current operations.

For example, as the business has grown,

the Company’s expenditures for human capital and supplies has expanded accordingly, and the timing of the payments for payroll and

to associated vendors, compared to the timing of receipts of cash from customers frequently results in the Company using existing cash

balances to fund these working capital needs.

The Company’s working capital needs depend on many factors, including the overall

growth of the company and the various payment terms that are negotiated with customers and vendors.

Future capital requirements depend

on many factors, including potential acquisitions, our level of investment in technology, and rate of growth in existing and into new

The cost of ongoing technology development is another factor that is considered.

Capital requirements might also be affected

by factors which the Company cannot control, such as interest rates, and other monetary and fiscal policy changes to the manner in which

the Company currently operates.

Additionally, as the impact of the COVID-19 on the economy and operations evolves, the Company will continuously

assess its liquidity needs.

If the Company’s growth rate is higher than is currently anticipated, resulting in greater-than-anticipated

capital requirements, the Company might need or choose to raise additional capital through debt or equity financings.

Considering the foregoing,

DocGo anticipates that existing balances of cash and cash equivalents, future expected cash flows generated from our operations and an

available line of credit (as discussed in Note 8, “Line of Credit” to the Condensed Consolidated Financial Statements) will

be sufficient to satisfy operating requirements for at least the next twelve months.

as of March 31, 2022 and March 31, 2021

Three Months Ended

$ in Millions

Working capital

Current Assets

Current Liabilities

Total working capital

As of March 31, 2022, available

cash totaled $188.4 million, which represented an increase of $160.2 million as compared to March 31, 2021, reflecting the receipt of

the proceeds from the merger described above, as well as positive cash flow.

As of March 31, 2022, working capital amounted to $207.2

million, which represented an increase of $175.5 million as compared to March 31, 2021, primarily reflecting the increased cash balance.

Increased accounts receivable, reflecting the growth of the business in 2021 and the early part of 2022, were partially offset by increases

in current liabilities, which reflected the growth of the business and resulted from extended payment terms from vendors.

months ended March 31, 2022 and 2021

Three Months Ended

$ in Millions

Cash Flow Summary

Net cash provided by/(used in) operating activities

Net cash provided by/(used in) investing activities

Net cash provided by/(used in) financing activities

Effect of exchange rate changes

Net (decrease) increase in cash

Operating Activities

During the three months ended

March 31, 2022, operating activities provided $18.2 million of cash, aided by net income of $9.4 million.

Non-cash charges amounted to

$4.8 million and included $1.6 million in depreciation of property and equipment and right-of-use assets, $0.6 million from amortization

of intangible assets, $1.2 million in bad debt expense primarily related to a provision for potential uncollectible accounts receivable

and $1.4 million of stock compensation expense.

Changes in assets and liabilities resulted in approximately $4.1 million in additional

operating cash flow, as a $1.1 million decrease in accounts receivable, a $2.2 million decrease in other assets and a $3.1 increase in

accrued liabilities outweighed the effect of a $1.5 million increase in prepaid expenses and a $0.7 million decline in accounts payable.

Operating cash flow in the first quarter of 2022 was aided by collections of large accounts receivable from invoices generated in the

fourth quarter of 2021.

During the three months ended

March 31, 2021, operating activities used $1.4 million of cash and primarily resulted from a net loss of $2.0 million and changes in assets

and liabilities, which were partially offset by non-cash charges of $2.7 million.

The non-cash items included $0.7 million of bad debt

expense primarily related to a provision for potential uncollectible accounts receivable, $1.2 million resulting from the depreciation

of property and equipment and right-of-use assets, $0.4 million from amortization of intangible assets, and $0.4 million of stock compensation

Changes in assets and liabilities resulted in approximately $2.0 million in negative operating cash flow and were primarily driven

by a $7.1 million increase in accounts receivable and a $1.1 million increase in prepaid expenses and other current assets, which were

partially offset by a $6.2 million increase in combined accounts payable and accrued expenses.

Investing Activities

During the three months ended

March 31, 2022, investing activities used $1.1 million of cash and primarily consisted of the acquisition of property and equipment totaling

$0.5 million and the acquisition of intangibles in the amount of $0.6 million to support the ongoing growth of the business.

During the three months ended

March 31, 2021, investing activities used $1.3 million of cash and primarily consisted of the acquisition of property and equipment totaling

$0.8 million and the acquisition of intangibles in the amount of $0.5 million to support growth of new transportation and mobile health

Financing Activities

During the three months ended

March 31, 2022, financing activities provided $2.5 million of cash, due to $1.0 million in proceeds from the Company’s revolving

credit line, $2.1 million in non-controlling interest contributions and $0.4 million in proceeds from the exercise of stock options, which

were partly offset by $0.6 million in payments on obligations under the terms of finance leases, $0.1 million in repayments of notes payable,

a reduction of $0.2 million in amounts due to seller and a $0.1 million of equity cost.

the three months ended March 31, 2021, financing activities used $0.5 million of cash, as noncontrolling interest contributions were

outweighed by repayments made on notes payable and finance leases.

Future minimum annual maturities

of notes payable as of March 31, 2022 are as follows:

Notes Payable

2022, remaining

2027 and thereafter

Total maturities

Current portion of notes payable

Long-term portion of notes payable

Future minimum lease payments

under operating leases as of March 31, 2022, and for the following five fiscal years and thereafter are as follows:

Operating Leases

2028 and thereafter

Total future minimum lease payments

Less effects of discounting

Present value of future minimum lease payments

Future minimum lease payments

under finance leases as of March 31, 2022, and for the following five fiscal years and thereafter are as follows:

Finance Leases

2028 and thereafter

Total future minimum lease payments

Less effects of discounting

Present value of future minimum lease payments

Accounting Policies

of Presentation

The Company’s Condensed

Consolidated Financial Statements are presented in conformity with accounting principles generally accepted in the United States of America

GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”).

Condensed Consolidated Financial Statements include the accounts and operations of the Company and its wholly owned subsidiaries.

intercompany accounts and transactions are eliminated upon consolidation.

Noncontrolling interests (“NCI”) on the Condensed

Consolidated Financial Statements represent the portion of consolidated joint ventures and a variable interest entity in which the Company

does not have direct equity ownership.

Accounts and transactions between consolidated entities have been eliminated.

to the Business Combination, the merger between Motion and Ambulnz, Inc.

was accounted for as a reverse recapitalization in accordance

GAAP (the “Reverse Recapitalization”).

Under this method of accounting, Motion was treated as the “acquired”

company for financial reporting purposes.

Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent

of Ambulnz, Inc.

stock for the net assets of Motion, accompanied by a recapitalization.

The net assets of Motion are stated at historical

cost, with no goodwill or other intangible assets recorded.

The consolidated assets, liabilities and results of operations prior to the

Reverse Recapitalization are those of Ambulnz, Inc.

The shares and corresponding capital amounts and earnings per share available for

common stockholders, prior to the Business Combination, have been retroactively restated as shares reflecting the exchange ratio (645.1452

to 1) established in the Business Combination.

Further, Ambulnz, Inc.

was determined to be the accounting acquirer in the transaction,

as such, the acquisition is considered a business combination under Accounting Standards Codification (“ASC”), Topic 805,

Business Combinations, (“ASC 805”) and was accounted for using the acquisition method of accounting.

of Consolidation

The Company’s Condensed

Consolidated Financial Statements include the accounts of DocGo Inc and its subsidiaries.

All significant intercompany transactions and

balances have been eliminated in these Condensed Consolidated Financial Statements.

The Company holds a variable interest in MD1 Medical Care P.C.

which contracts with physicians and other health professionals in order to provide services to the Company.

MD1 is considered a variable

interest entity (“VIE”) since it does not have sufficient equity to finance its activities without additional subordinated

financial support.

An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits—that

is, it has (1) the power to direct the activities of a VIE that most significantly impacts the VIE’s economic performance (power)

and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits

from the VIE that potentially could be significant to the VIE (benefits).

The Company has the power and rights to control all activities

of MD1 and funds and absorbs all losses of the VIE and appropriately consolidates MD1.

loss for the VIE was $85,379 as of March 31, 2022.

The VIE’s total assets, all of which were current, amounted to $509,769

on March 31, 2022.

Total liabilities, all of which were current for the VIE, was $1,020,254 on March 31, 2022.

total stockholders’ deficit was $510,485 on March 31, 2022.

Company accounts for its business combinations under the provisions of ASC 805-10, Business Combinations (“ASC 805-10”),

which requires that the acquisition method of accounting be used for all business combinations.

Assets acquired and liabilities assumed,

including NCI, are recorded at the date of acquisition at their respective fair values.

ASC 805-10 also specifies criteria that intangible

assets acquired in a business combination must meet to be recognized and reported apart from goodwill.

represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination.

If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at

the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments.

in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows:

1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement

is accounted for within equity, or 2) if the contingent consideration is classified as a liability, the changes in fair value are recognized

For transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain

The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related

costs and fees associated with business combinations.

estimated fair value of net assets to be acquired, including the allocation of the fair value to identifiable assets and liabilities,

is determined using established valuation techniques.

Management uses assumptions on the basis of historical knowledge of the business

and projected financial information of the target.

These assumptions may vary based on future events, perceptions of different market

participants and other factors outside the control of management, and such variations may be significant to estimated values.

and Indefinite-Lived Intangible Assets

represents the excess of the purchase price of an acquired business over the fair value of amounts assigned to assets acquired and liabilities

Goodwill and indefinite-lived intangible assets, consisting primarily of operating licenses, are not amortized, but are evaluated

for impairment on an annual basis, or on an interim basis when events or changes in circumstances indicate that the carrying value may

not be recoverable.

In assessing the recoverability of goodwill and indefinite-lived intangible assets, the Company makes assumptions

regarding the estimated future cash flows, including forecasted revenue growth, projected gross margin and the discount rate to determine

the fair value of these assets.

If these estimates or their related assumptions change in the future, the Company may be required to

record impairment charges against these assets in the reporting period in which the impairment is determined.

Company tests goodwill for impairment at the reporting unit level, which is one level below the operating segment.

The Company has the

option of performing a qualitative assessment to determine whether further impairment testing is necessary before performing the one-step

quantitative assessment.

If as a result of the qualitative assessment, it is more-likely-than-not that the fair value of a reporting

unit is less than its carrying amount, a quantitative impairment test will be required.

Otherwise, no further testing will be required.

If a quantitative impairment test is performed, the Company compares the fair values of the applicable reporting units with their aggregate

carrying values, including goodwill.

Estimating the fair value of the reporting units requires significant judgment by management.

the carrying amount of a reporting unit exceeds the fair value of the reporting unit, goodwill impairment is recognized.

excess in carrying value over the estimated fair value is recorded as impairment loss and charged to the results of operations in the

period such determination is made.

For the periods ended December 31, 2021 and 2020, management determined that there was no impairment

loss required to be recognized in the carrying value of goodwill or other intangible assets.

The Company selected December 31 as

its annual testing date.

January 1, 2019, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”), as amended.

determine revenue recognition for contractual arrangements that the Company determines are within the scope of ASC 606, the Company performs

the following five steps:

(1) identify each contract with a customer;

(2) identify the performance obligations in the contract;

(3) determine

the transaction price;

(4) allocate the transaction price to performance obligations in the contract;

and (5) recognize revenue when

(or as) the relevant performance obligation is satisfied.

The Company only applies the five-step model to contracts when it is probable

that the Company will collect the consideration it is entitled to in exchange for the goods or services the Company provides to the customer.

Company generates revenues from the provision of (1) ambulance and medical transportation services (“Transportation Services”)

and (2) Mobile Health services.

The customer simultaneously receives and consumes the benefits provided by the Company as the performance

obligations are fulfilled, therefore the Company satisfies performance obligations immediately.

The Company has utilized the “right

to invoice” expedient which allows an entity to recognize revenue in the amount of consideration to which the entity has the right

to invoice when the amount that the Company has the right to invoice corresponds directly to the value transferred to the customer.

are recorded net of an estimated contractual allowances for claims subject to contracts with responsible paying entities.

estimates contractual allowances at the time of billing based on contractual terms, historical collections, or other arrangements.

transaction prices are fixed and determinable which includes a fixed base rate, fixed mileage rate and an evaluation of historical collections

by each payer.

taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an

asset and liability approach.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of

events that have been included in the financial statements or its tax returns.

Deferred tax assets and liabilities are determined based

on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year

in which the differences are expected to reverse.

Valuation allowances are provided, if based upon the weight of available evidence,

it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertain tax positions

in accordance with the provisions of ASC 740.

When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions

to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority.

The determination

as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as

consideration of the available facts and circumstances.

The Company recognizes any interest and penalties accrued related to unrecognized

tax benefits as income tax expense.

see Note 2, “Summary of Significant Accounting Policies” to the Condensed Consolidated Financial Statements.

Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

are a smaller reporting company, as defined by Rule 12b-2 under the Exchange Act and in Item 10(f)(1) of Regulation S-K, and are not

required to provide the information under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis