What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-09 compared with 2022-11-08 · 685 added, 725 removed, 87 unchanged (94% of the section changed)

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

Management’s Discussion and

Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our

financial condition and results of operations should be read in conjunction with our unaudited Condensed Consolidated Financial Statements

and the accompanying notes included elsewhere in this Quarterly Report on Form 10-Q.

The discussion and analysis below contain certain

forward-looking statements about our business and operations that are subject to the risks, uncertainties, and other factors described

in the sections entitled “Risk Factors,” included in Part I, Item 1A in our Annual Report on Form 10-K for the year ended

December 31, 2022, and as may be updated in this and other subsequent Quarterly Reports on Form 10-Q.

These risks, uncertainties, and

other factors could cause our actual results to differ materially from those expressed in, or implied by, the forward-looking statements.

Please refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Unless the context requires otherwise, references

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business and operations of DocGo Inc.

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

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

Unaudited Condensed Consolidated Financial Statements or in the associated notes.

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.

Additional 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 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.

DocGo 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 U.S.

Company derives revenue primarily from its two operating segments:

and its consolidated subsidiaries, including those periods prior to the Business Combination.

figures, such as interest rates and other percentages, included in this section have been rounded for ease of presentation.

figures included in this section have, in some cases, been calculated on the basis of such rounded figures.

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 unaudited

Condensed Consolidated Financial Statements or in the associated notes.

Certain other amounts that appear in this section may similarly

not sum due to rounding.

Cautionary Note Regarding

Forward-Looking Statements

This 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, outcomes, and

prospects, both business and financial, of the Company.

These statements are based on the beliefs and assumptions of our management.

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, outcomes or expectations.

Forward-looking statements

are inherently subject to substantial risks, uncertainties and assumptions, many of which are beyond our control, and which may cause

actual results to differ materially from those contained in our forward-looking statements.

Accordingly, you should not place undue reliance

on such statements.

All statements other than statements of historical fact are forward-looking.

Forward-looking statements include, but

are not limited to, statements concerning possible or assumed future actions, business strategies, plans, goals, future events, future

revenues or performance, financing needs, business trends, results of operations, objectives and intentions with respect to future operations,

services and products, including our transition to non-COVID related services, geographic expansion, our normalization initiative, new

and existing contracts, M&A activity, workforce growth, leadership transition, cash position, share repurchase program, impacts of

financial institution instability, our competitive position and opportunities, including our ability to realize the benefits from our

operating model, and others.

In some cases, these statements may be preceded by, followed by or include the words “believes,”

“estimates,” “expects,” “projects,” “forecasts,” “may,” “might,”

“will,” “should,” “could,” “can,” “would,” “design,” “potential,”

“seeks,” “plans,” “scheduled,” “anticipates,” “intends” or the negative of

these terms or similar expressions.

Forward-looking statements are not guarantees

of performance and speak only as of the date the statements are made.

While DocGo believes that these forward-looking statements are reasonable,

there can be no assurance that DocGo will achieve or realize these plans, intentions, outcomes or expectations.

You should understand

that the following important factors, in addition to those discussed under the sections entitled “Risk Factors,” included

in Part I, Item 1A in our Annual Report on Form 10-K for the year ended December 31, 2022, and as may be updated in this and other subsequent

Quarterly Reports on Form 10-Q, could affect the future results and prospects of DocGo and could cause those results or other outcomes

to differ materially from those expressed or implied in the forward-looking statements in this Quarterly Report on Form 10-Q.

We undertake no intent or obligation to publicly

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

DocGo, which was originally formed in 2015, is

a healthcare transportation and mobile services company that uses proprietary dispatch and communication technology to help 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.

The Company derives revenue primarily from two

operating segments:

Transportation Services and Mobile Health Services.

Transportation Services:

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

revenue from Transportation Services is derived from the transportation of patients based on billings to third-party payors and healthcare

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.

Mobile 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.

See Note 10, “Business

Segment Information” to the Unaudited Condensed Consolidated Financial Statements for additional information regarding DocGo’s

For the three months ended September 30, 2022, the Company recorded net

income of $2.5 million, compared to net income of $0.8 million in the three months ended September 30, 2021.

For the nine months ended September 30, 2022, the Company recorded net

income of $23.6 million, compared to a net loss of $1.1 million in the nine months ended September 30, 2021.

The spread of COVID-19 and the related shutdowns and restrictions

had a mixed impact on our business.

In the ambulance transportation business, which comprises primarily of non-emergency medical

transport, the Company initially saw a decline in volumes from historical and expected levels, as elective surgeries and other non-emergency surgical

procedures were postponed.

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

events were cancelled or had a significantly restricted (or entirely eliminated) number of permitted attendees.

Ambulance transports and

event-related revenues have both since recovered to pre-COVID levels or higher.

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 segment.

Mobile Health generated approximately $76.6 and $254.1 million

in revenue in the three and nine months ended September 30, 2022, respectively, as compared to $67.9 and $131.7 million in the three

and nine months ended September 30, 2021, respectively.

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.

DocGo also received accelerated Medicare payments of approximately $2.4 million that were repaid in 2022.

While it is very difficult

to accurately predict the future direction of the effects of COVID-19 or other pandemics, and the related impact on medical transportation

levels, the revenue from the Transportation Services segment during 2021 exceeded that of 2020 by approximately 33%.

Since the beginning

of 2021, trip volumes in most of our markets have returned to more normal historical levels, and this trend has continued throughout 2022.

The Company generated, during 2021, COVID-19 testing revenue, included in its Mobile Health services segment, above the levels projected,

and this persisted through the second quarter of 2022.

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.

There is also an emphasis on providing total care management solutions to large population groups, which include healthcare services as well as ancillary services, such as shelter.

In addition, beginning with the first

quarter of 2023, the Company is reporting in three operating segments, adding a Corporate segment to allow for analysis of shared

services and personnel that support both the Transportation Services and Mobile Health Services segments.

Previously, these costs

had been allocated almost entirely to the Transportation Services segment.

All of the Company’s revenues and costs of goods

sold continue to be reported within the Transportation Services and Mobile Health Services segments.

The Corporate segment contains

operating expenses such as information technology costs, certain insurance costs and the compensation costs of senior and executive

The segment reporting for the prior-year period has been adjusted to conform to the new methodology, for the purposes of

allowing a clearer analysis of year-over-year performance.

See Note 11, “Business Segment Information” to the unaudited

Condensed Consolidated Financial Statements for additional information regarding DocGo’s segments and “Operating

Expenses” below.

For the three months ended March 31, 2023, the

Company recorded a loss of $3.9 million, compared to net income of $9.4 million in the three months ended March 31, 2022.

The spread of COVID-19 and the related shutdowns

and restrictions had a mixed impact on our business.

In the Transportation Services segment, which comprises primarily of non-emergency

medical transport, in 2020, the Company saw a decline in volumes from historical and expected levels, as elective surgeries and other

non-emergency surgical procedures were postponed.

In addition, in the Mobile Health segment, in 2020, the Company experienced lost revenue

associated with sporting, concerts and other events, as those events were cancelled or had a significantly restricted (or entirely eliminated)

number of permitted attendees.

Ambulance transports and event-related revenues have both since recovered to pre-COVID levels or higher.

While COVID-19 testing has become a minor part

of this segment’s business, since the second half of 2022, the Mobile Health segment has continued to grow.

We have expanded our

service offerings in this segment to offer a wider range of testing, vaccination and other services to a broader customer group.

the first quarter of 2023, Mobile Health generated approximately $72.9 million in revenue, compared to $90.1 million in the first quarter

As the COVID-19 pandemic reaches endemic

stages, the future impacts of it or other pandemics on DocGo remain highly uncertain and subject to numerous factors, including the

severity of any new outbreaks, resurgences and variants, actions taken to contain resurgences or variants or to address their

impact, and other effects, and its related impact on medical transportation levels remain uncertain.

However, trip volumes in most

of our markets returned to more normal historical levels in 2021, and this trend continued throughout 2022.

The Company generated,

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

persisted through the second quarter of 2022.

However, as expected, COVID-19 testing revenues declined in the third quarter of 2022

2022 and are expected to remain at these lower levels for the foreseeable future.

Given the nature of the Company’s contracts with

most of its customers, which include multiple procedures for which the Company is paid per hours worked, per vehicles and related equipment

utilized and on a per-procedure basis (such procedures including both testing and several other procedures), it is difficult to determine

the revenues that are directly attributable to COVID-19 testing.

However, the Company estimates that COVID-19 testing revenue will continue

to account for a declining proportion of Mobile Health segment and overall consolidated revenues over the remainder of 2022 and into 2023.

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, which has now become our larger operating segment, both in terms of revenues and personnel.

Company’s current business plan assumes continued recovery of industry-wide transportation volumes to historical levels and beyond,

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

and declined further in the fourth quarter of 2022 and the first quarter of 2023, to the point where, as of the date of the filing

of this Quarterly Report on Form 10-Q, they account for an insignificant proportion of total revenues.

Given the nature of the

Company’s contracts with most of its customers, which include multiple procedures for which the Company is paid per hours

worked, per vehicles and related equipment utilized and on a per-procedure basis (such procedures including both testing and several

other procedures), it is difficult to determine the revenues that are directly attributable to COVID-19 testing.

Company estimates that COVID-19 testing revenue will continue to account for an insignificant proportion of Mobile Health segment

and overall consolidated revenues in 2023 and beyond, as COVID-19 enters the endemic phase.

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 a more rapid expansion of the Mobile Health

segment, which has now become our larger operating segment, both in terms of revenues and personnel.

The Company’s current business plan assumes

an increased demand for Mobile Health services, a demand that was accelerated by the pandemic, but which we believe 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.

In the Transportation Services segment, volumes are expected to continue to rise, reflecting

an aging population in the U.S.

and U.K., which tends to drive demand for the non-emergent medical transportation services provided by

Factors Affecting

Our Results of Operations

Our 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, 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.

While the direct impact of the

pandemic itself is waning, other impacts, such as supply chain disruptions and the cost and availability of labor are expected to persist.

and financial performance are influenced by a variety of factors, including, among others, our ability to obtain or maintain operating

the success of our acquisition strategy;

conditions in the healthcare transportation and mobile health services markets;

competitive environment;

overall macroeconomic and geopolitical conditions, including rising interest rates, the inflationary environment,

the potential recessionary environment, regional conflict and tensions and financial institution instability;

availability of healthcare

professionals;

changes in the cost of labor;

and production schedules of our suppliers.

Some of these important factors are briefly discussed

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

Operating Licenses

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

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

During the nine months ended September 30, 2022,

DocGo completed three acquisitions, for an aggregate payment of $34.1 million, excluding $1.3 million held in escrow.

During the 12 months ended December 31, 2021, DocGo completed one acquisition, for a purchase price of

$2.3 million.

On July 6, 2022, the Company acquired Government

Medical Services, LLC (“GMS”) in exchange for $20.3 million in cash.

GMS is in the business of providing licensed healthcare

We believe this acquisition will allow us to increase our presence in that market, while giving us improved access to governmental

and municipal contracts.

We have completed our preliminary allocation of the purchase consideration to the asset acquired and liabilities

assumed as of the end of the third quarter of 2022.

On July 13, 2022, the Company acquired Exceptional

Medical Transportation, LLC (“Exceptional”) in exchange for $6.4 million in cash paid at closing, plus $1.3 million held in

Exceptional is in the business of providing medical transportation services in New Jersey.

We believe this acquisition will allow

us to increase our presence in that market.

We have completed our preliminary allocation of the purchase consideration to the assets acquired

and liabilities assumed as of the end of the third quarter of 2022.

On August 9, 2022, the Company acquired Ryan Brothers

Ambulance Inc.

(“Ryan Brothers”), in exchange for $7.4 million of cash (and a total of $4 million in future contingent consideration).

Ryan Brothers is in the business of providing medical transportation services in Wisconsin.

We believe this acquisition will allow us

to increase our presence in that market.

We have completed our preliminary allocation of the purchase consideration to the assets acquired

and liabilities assumed as of the end of the third quarter of 2022.

Healthcare Services Market

The 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

Economic 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.

Trip Volumes and Average

A “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.

does not include instances where a trip is ordered and subsequently either canceled (by the customer) or declined (by the Company).

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.

The 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 Services.

Revenues generated from programs under which DocGo

is paid a fixed hourly or daily rate for the use of a fully staffed and equipped ambulance do not factor in the trip counts or average

trip prices mentioned above.

During the three months ended March 31, 2023, the

Company completed one acquisition, for a purchase price of $25.8 million.

DocGo did not complete any acquisitions

during the three months ended March 31, 2022.

Healthcare Services

The transportation services

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

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

However, these volumes were

recovered in 2021since 2021, and since the first half of 2022, the Company has seen increased demand and trip volumes in nearly all of

its Transportation services markets, as the Company expanded its customer base.

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.

Trip 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.

We anticipate that these fixed rate, “leased hour” programs will

account for an increasing proportion of the Transportation segment’s revenues in the future.

Our Ability to Control

We 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.

We employ 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.

This data is 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%-6.0%

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

For the 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 nine months of 2022, reaching approximately 9.1% in June 2022 and amounting to 8.2% in September 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.

We 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.

We employ our proprietary technology

to drive improvements in productivity per transport.

We regularly analyze our workforce productivity with a goal of balancing the optimum,

cost-efficient labor mix for our locations.

This involves managing the mix of company-employed labor and subcontracted labor as well

as full-time and part-time employees.

Beginning in 2021, the inflation rate in the US, as measured by the

Consumer Price Index (“CPI”) has generally trended higher.

This data is reported monthly, showing year-over-year changes in

prices across a basket of goods and services.

Though the inflation rate has seemingly moderated in the first quarter of 2023, it remains

well above historical averages.

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.

In an attempt to dampen inflation, the U.S.

Federal Reserve has already implemented six interest rate

increases in 2022, raising its benchmark rate (the “federal funds rate”) from near 0.00% at the beginning of the year to the

current level of 3.75%-4.00%.

The federal funds rate was raised in March, May, June, July, September and November, with the last four

rate increases at 0.75% each.

Looking to the fourth quarter of 2022 and into 2023, we anticipate a moderation of the inflation rate when

compared to the first half of the year, as a result of these recent rate increases but expect that inflation will remain well above the

levels seen in the previous 10 years, when the annual inflation rate ranged from 0.1% to 2.4%, and above the Federal Reserve’s “target”

inflation rate of 2.0%.

If inflation is above the levels that the Company anticipates, gross margins could be below plan and our business,

operating results and cash flows may be adversely affected.

Federal Reserve

implemented two interest rate hikes to date in 2023, raising its benchmark rate (the “federal funds rate”) to the current

level of 4.75%-5.00% as of the date of the filing of this Quarterly Report on Form 10-Q.

Looking to the remainder of 2023, we anticipate

a continued moderation of the inflation rate when compared to the levels seen in 2022, as a result of these recent interest rate hikes,

but expect that inflation will remain well above the levels seen in the previous 10 years.

If inflation is above the levels that the Company

anticipates, 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

Our 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.

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.

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.

Regulatory Environment

DocGo 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 business.

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 business.

Components of Results

of Operations

Our 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.

The Company’s revenue consists of services

provided by its ambulance Transportation Services segment and its Mobile Health segment.

Our business consists

of three reportable segments — Transportation Services, Mobile Health Services and Corporate.

All revenue and cost of

goods sold are contained within the Transportation Services and Mobile Health Services segments.

Accordingly, revenues and cost of goods

sold are discussed below on a consolidated level and are also broken down between Transportation Services and Mobile Health Services.

Operating expenses are discussed on a consolidated level and broken down among all three segments.

The Company evaluates the performance

of each of its 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.

The Company’s revenue consists of services provided by its Transportation

Services segment and its Mobile Health segment.

Cost of Revenues

Cost 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.

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

Cost 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,

fuel related to Transportation Services, laboratory fees, facility rent, medical supplies and subcontractors.

We expect cost of revenue

to continue to rise along with the expected increase in revenue.

Operating Expenses

General and administrative

General and administrative expense consists primarily

of salaries, bad debt expense, insurance expense, consultant fees, and professional fees for accounting and legal services.

our general and administrative expense to increase as we continue to 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 (such as Directors

and Officers insurance), investor relations activities, and other administrative and professional services.

Depreciation and Amortization

DocGo 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.

Legal and Regulatory

Legal and regulatory

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

Technology and Development

Technology 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, particularly when entering new business lines or customer sales channels.

General 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

our compliance with SEC rules and regulations, audit, additional insurance expenses, investor relations activities, and other administrative

and professional services.

Depreciation and

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.

Regulatory Expenses

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

Technology and

Development Expenses

Technology and development expenses, net of capitalization, consists

primarily of costs incurred in the design and development of DocGo’s proprietary technology, third-party software and technologies.

We expect technology and development expenses to increase in future periods to support our growth, including as we invest in the optimization,

accuracy and reliability of our platform to help drive efficiency in our operations.

These expenses may vary from period to period as

a percentage of revenue, depending primarily upon when we choose to make more significant investments, which is in turn, dependent on

numerous factors, including when we plan to enter into new business lines or customer sales channels.

Sales, Advertising

and Marketing Expenses

Our 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.

Company expands its sales efforts to include the direct-to-consumer channel, marketing expenses are likely to increase as a percentage

of revenues, given the marketing-intensive nature of that sales channel.

and Marketing

Our sales, advertising and marketing expenses consist of costs directly

associated with our sales, advertising and marketing activities, which primarily include sales commissions, marketing programs, trade

shows, and promotional materials.

We expect that our sales, advertising 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.

As the Company

expands its sales efforts to include the direct-to-consumer channel, marketing expenses are likely to increase as a percentage of revenues,

given the marketing-intensive nature of that sales channel.

Interest Expense

Interest expense consists

primarily of interest on our outstanding borrowings under our outstanding notes payable, lines of credit and financing obligations.

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

Results of Operations

Comparison of the three months ended September 30, 2022 and 2021

Comparison of

the Three Months Ended March 31, 2023 and March 31, 2022

Three Months Ended

September 30,

$ in Millions

7 unchanged sentences

Total expenses

Income (loss) from operations

(Loss) Income from operations

Other income (expenses):

Interest income (expense), net

Gain on remeasurement of warrant liabilities

Gain (loss) on initial equity method investments

Gain (loss) from Lease Accounting

Loss on remeasurement of warrant liabilities

Loss on equity method investments

Loss on disposal of fixed assets

Other income (loss)

Total other income (expense)

Net income (loss) before income tax benefit (expense)

Income tax expense

Net income (loss)

Total other income (expenses)

Net (loss) income before income tax benefit (provision)

Income tax benefit (provision)

Net (loss) income

Net loss attributable to noncontrolling interests

Net income (loss) attributable to stockholders of DocGo Inc.

Net (loss) income attributable to stockholders of DocGo Inc.

and Subsidiaries

For the three months ended September 30, 2022,

total revenues were $104.3 million, an increase of $18.5 million, or 22%, from the total revenues recorded in the three months ended September

Transportation Services

For the three months ended September 30, 2022,

Transportation Services revenue totaled $27.7 million and increased by $9.8 million, or 55%, as compared with the three months ended September

The increase in transportation services revenue reflected higher trip volumes and average trip prices.

Volumes increased by

approximately 29%, from 45,532 trips for the three months ended September 30, 2021, to 58,751 trips for the three months ended September

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

markets in 2022 and acquisitions made during the third quarter of 2022.

Our average trip price increased from $303 in the three months

ended September 30, 2021, to $374 in the three months ended September 30, 2022.

The increase in the average trip price in 2022 reflected

a shift in mix toward higher-priced transports with existing customers, as well as the acquisition of licenses to provide higher acuity

transports resulting in higher prices per trip.

The average trip price also benefited from a 5.1% increase in the average Medicare reimbursement

rate for ambulance transports.

In October 2022, the Centers for Medicare and Medicaid Services (CMS) announced that the Medicare ambulance

fee schedule would be increasing by a further 8.7%, effective January 1, 2023.

For the three months ended

March 31, 2023, total revenues were $113.0 million, a decline of $4.9 million, or 4.2%, from the total revenues recorded in the three

months ended March 31, 2022.

Mobile Health

For the three months ended September 30, 2022, Mobile Health revenue

totaled $76.6 million, an increase of $8.7 million, or 13%, as compared with the three months ended September 30, 2021.

For the three months

ended March 31, 2023, Mobile Health revenue totaled $72.9 million, a decline of $17.2 million, or 19.1%, as compared with the three months

ended March 31, 2022.

The decrease in revenues was due to a significant decline in COVID-19 related testing services when compared to

the prior year period.

The Company estimates that revenues from mass COVID-19 testing programs amounted to approximately $1.0 million

in the first quarter of 2023, compared to approximately $38.0 million in first quarter of 2022.

The decline in COVID-19 testing revenue

was partially offset by the expansion of the services offered by the Mobile Health segment.

This expansion has accelerated through 2022

and into 2023 as the Company increased its customer base and geographic reach, while extending several large customer contracts and introducing

a broader range of services.

Transportation Services

For the three months ended March 31, 2023, Transportation Services

revenue totaled $40.1 million and increased by $12.3 million, or 44%, as compared with the three months ended March 31, 2022.

This increase

was mainly due to the expansion of the services offered by this segment.

This expansion accelerated through 2021 and into 2022 as the

Company increased its customer base, primarily in the municipal and cruise line customer segments, and its geographic reach, while extending

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

Compared to the prior year period, the third quarter of

2022 featured significantly less COVID-19 testing revenue, which was outweighed by the substantial increase in other Mobile Health services.

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

Volumes increased by approximately 21%, from

48,110 trips for the three months ended March 31, 2022, to 58,176 trips for the three months ended March 31, 2023.

The increase in trip

volumes is due to a combination of growth in the customer base in certain core markets, further penetration of markets that were entered

into in 2021 and the early part of 2022 and acquisitions made during the second half of 2022.

Our average trip price increased from $353

in the three months ended March 31, 2022, to $415 in the three months ended March 31, 2023.

The increase in the average trip price in

the 2023 period reflects a shift in mix toward higher-priced transports with existing customers, as well as the acquisition of licenses

to provide higher acuity transports, resulting in higher prices per trip.

The average trip price also benefited from an 8.7% increase

in the average Medicare reimbursement rate for ambulance transports.

Cost of Revenue

For the three months ended September 30, 2022,

total cost of revenue (exclusive of depreciation and amortization) increased by 19%, as compared to the three months ended September 30,

2021, while revenue increased by approximately 22%.

Cost of revenue as a percentage of revenue decreased to 68.3% in the third quarter

of 2022 from 69.9% in the third quarter of 2021.

In absolute dollar terms, total cost of revenue

in the three months ended September 30, 2022 increased by $11.3 million, compared to the same period in 2021.

For the three months ended March 31, 2023, total cost of revenue (exclusive

of depreciation and amortization) was $81.2 million an increase of by 4.1%, as compared to the three months ended March 31, 2022.

of revenue as a percentage of revenue increased to 71.9% in the first quarter of 2023 from 66.2% in the first quarter of 2022.

remainder of 2023, we expect cost of revenues to account for a smaller percentage of revenue than in the first quarter, as the Company’s

ongoing margin enhancement projects provide a larger impact.

Areas of focus include subcontracted labor, overtime hours for field staff

and vehicle costs, particularly in the area of rental vehicles.

In absolute dollar terms, total cost of revenue in the three months

ended March 31, 2023 increased by $3.2 million from the levels of the three months ended March 31, 2022.

This was primarily attributable

to a $22.7 million increase in total compensation, due to higher headcount for both the Transportation Services and Mobile Health segments

and higher average hourly wages;

a $2.8 million increase in vehicle costs, driven by a continued increase in the Company’s vehicle

fleet and higher fuel and maintenance costs, as well as costs incurred to rent vehicles to provide Mobile Health services;

a $0.5 million

increase in facilities and related costs;

and approximately $0.4 million in increases across a variety of other cost of revenue categories

relating to the Company’s increased scale and geographic presence.

These items were partially offset by a $9.1 million decrease

in lab fees related to COVID-19 testing activity, reflecting lower reduced testing activity, lower per-test lab fees and a shift toward

a $5.3 million decrease in subcontracted labor, driven mostly by the Mobile Health segment, where the Company continues to

transition away from external labor sources towards its own hired personnel;

a $0.4 million decline in medical supplies, reflecting a

decline in COVID-19 testing activity and improved sourcing of various supplies and a $0.3 million decline in travel costs, as there were

fewer field personnel and other clinicians who traveled out of their home regions to provide Mobile Health services.

For the Transportation Services segment, cost

of revenues (exclusive of depreciation and amortization) in the three months ended September 30, 2022 amounted to $21.3 million, up $4.6

million, or 28%, from the three months ended September 30, 2021.

Cost of revenues as a percentage of revenues decreased to 76.8% from

92.9% in prior year quarter, due to increased volumes and higher average trip prices, as described above, combined with lower average

hourly wages, as recent market wage pressures began to subside, and as the Company more effectively managed its staff to reduce overtime

hours for field employees.

These factors outweighed the effects of increased fuel costs.

Gasoline prices moderated somewhat during the

third quarter, as compared to the levels witnessed in the second quarter of 2022, but remained well above the levels of the second quarter

We anticipate that fuel prices will remain at elevated levels for the remainder of 2022.

For the Mobile Health segment, cost of revenues

(exclusive of depreciation and amortization) in the three months ended September 30, 2022 amounted to $50.0 million up 15% from $43.4

million in the three months ended September 30, 2021.

Cost of revenues as a percentage of revenues increased to 65.2% from 63.9%, despite

the increase in revenues and the continued shift away from higher-cost subcontracted labor toward Company personnel during 2022, reflecting

higher compensation costs associated with some of the Company’s newer projects.

to an $15.7 million increase in total compensation, reflecting higher headcount for both the Transportation Services and Mobile Health

and a $0.6 million increase in vehicle costs, reflecting the expansion of the Company’s fleet over the past year;

$0.4 million in increases across a variety of cost of revenue categories.

These factors were largely offset by a $1.9 million decline

in subcontracted labor, as the Company more aggressively transitioned to internal employees toward the latter part of the first quarter;

an $8.2 million decrease in medical supplies and a $3.4 million decline in lab fees, both reflecting the significant decline in COVID-19

testing activity in the first quarter of 2023 compared to the first quarter of 2022.

For the Mobile Health segment, cost of revenues (exclusive of depreciation

and amortization) in the three months ended March 31, 2023 amounted to $52.7 million a decline of $3.8 million, or 6.7% from the three

months ended March 31, 2022.

Cost of revenues as a percentage of revenues increased to 72.3% in the first quarter of 2023 from 62.7% in

the first quarter of 2022, due to the decline in COVID-testing revenues and significantly higher compensation expenses, reflecting headcount

growth, which outweighed the impact of reduced lab fees and other medical supplies.

In absolute dollar terms, subcontracted labor costs

declined, but these costs were higher in the first quarter of 2023 as a percentage of Mobile Health revenues than in the first quarter

For the Transportation Services segment, cost of revenues (exclusive

of depreciation and amortization) in the three months ended March 31, 2023 amounted to $28.5 million, up $7.0 million, or 33%, from the

three months ended March 31, 2022.

Cost of revenues as a percentage of revenues declined to 71.1% in the first quarter of 2023, from 77.3%

in the first quarter of 2022, reflecting 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, as well as a decline in the average fuel price.

Operating Expenses

For the three months ended September 30, 2022, the

Company recorded $28.8 million of operating expenses compared to $24.4 million for the three months ended September 30, 2021, an increase

As a percentage of revenue, operating expenses declined from 28.3% in the third quarter of 2021 to 27.7% in the third quarter

of 2022, due primarily to the increase in overall revenues described above, coupled with the semi-fixed nature of the cost of corporate

infrastructure.

The increase of $4.4 million related primarily to a $2.0 million increase in legal, accounting and other professional

fees related to increased revenue and related contract generation and SEC filing-related costs;

a $1.2 million increase in insurance costs

reflecting the growth and expansion of the Company, as well as the inclusion of directors and officers (D&O) insurance;

For the three months

ended March 31, 2023, the Company recorded $38.7 million of operating expenses, an increase of $8.9 million, or 30%, compared to the three

months ended March 31, 2022.

As a percentage of revenue, operating expenses increased from 25.3% in the first quarter of 2022 to 34.3%

in the first quarter of 2023.

The increase of $8.9 million related primarily to a $6.9 million increase in total compensation due to investments

in and expansion of corporate overhead to support revenue growth, largely driven by higher stock compensation expense;

a $1.4 million

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

including from recently acquired companies;

a $0.3 million increase in office-related expenses, due to the Company’s ongoing growth

and geographic expansion;

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

assets that were added as part of acquisitions that the Company completed in the second half of 2022;

a $2.3 million increase in legal,

accounting, regulatory and other professional fees related to increased revenue and related contract generation, audit fees, Sarbanes-Oxley

(SOX) compliance consulting fees and SEC filing-related costs;

a $1.2 million increase in insurance costs, reflecting higher headcount

and expanded operations;

a $1.0 million increase in IT infrastructure, driven by the Company’s business and headcount expansion

These items were partially offset by a $0.8 million decline in total compensation, which includes salaries, benefits, bonuses and commissions

for both direct and subcontracted labor, reflecting savings from the outsourcing of certain administrative functions.

The Company anticipates

that operating expenses will continue to increase in line with the Company’s revenue growth remain in the range of 25%-30% of revenue

in the coming quarters.

For the Transportation Services segment, operating

expenses in the three months ended September 30, 2022 were $10.6 million, down $2.2 million, or 17%, from the three months ended September

Operating expenses as a percentage of revenues decreased to 38.6% from 71.3% for the three months ended September 30, 2021,

reflecting the increase in revenues and overhead cost-cutting activities undertaken during the earlier part of 2022, as well as lower

insurance costs, due to the establishment earlier this year of the Company’s captive insurance program.

For the Mobile Health segment, operating expenses

in the three months ended September 30, 2022 were $18.2 million, up 56% from operating expenses of $12.8 million in the three months ended

September 30, 2021.

Operating expenses as a percentage of revenues increased to 23.8% from 17.2% in the third quarter of 2021, despite

the increase in Mobile Health revenues, reflecting significant expenditures that were made in the 2022 period in the expansion of services

and geographic areas of operation, as well as the continued buildout of the Mobile Health management infrastructure and the costs of developing

the Company’s “on-demand” direct-to-consumer offering.

Interest Income/(Expense), Net

For the three months ended September 30, 2022,

the Company recorded $0.3 million of net interest income compared to $0.3 million of net interest expense in the three months ended September

This was due to a significantly higher amount of interest earned in the third quarter of 2022, resulting from an increase in

the Company’s cash balances in interest-bearing accounts, coupled with higher rates of interest earned on balances in these accounts.

Gain from PPP Loan Forgiveness

During the three months ended September 30, 2021,

the Company recorded a gain of $142,667 due to the forgiveness of a loan that one of its subsidiaries had obtained via the government’s

Paycheck Protection Program (PPP) in 2020.

No gain from loan forgiveness was recorded during the three months ended September 30, 2022.

Gain/(loss) on Remeasurement of Warrant Liabilities

During the three months ended September 30, 2022,

the Company recorded a loss of approximately $1.8 million from the remeasurement of warrant liabilities.

The warrants are marked-to-market

in each reporting period, and this loss reflected the increase in DocGo’s stock price relative to the beginning of the period.

were no warrant liabilities in the same period in 2021.

On August 15, 2022, the Company announced the redemption of all of its outstanding

warrants under the Warrant Agreement, dated as of October 14, 2020, by and between Motion Acquisition Corp.

(“Motion”) and

Continental Stock Transfer & Trust Company, as warrant agent, as part of the units sold in Motion’s initial public offering,

on the redemption date of September 16, 2022 (the “Redemption Date”).

Warrants surrendered for exercise on a cashless basis

resulted in the issuance of 1,406,371 shares.

A total of 68,514 warrants were not surrendered on the Redemption Date and were redeemed

for $0.10 per warrant.

Gain/(Loss) on Equity Method Investment

During the three months ended September 30, 2022,

the Company recorded a gain of $93,371, 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 fourth quarter of 2021, and as such, no gain

or loss was recorded in relation to an equity method investment in the same period in 2021.

Income Tax (Expense)/Benefit

During the three months ended September 30, 2022,

the Company recorded income tax expense of $0.4 million, compared to an income tax expense of $0.6 million in the three months ended September

Noncontrolling Interest

For the three months ended September 30, 2022,

the Company had a net loss attributable to noncontrolling interest of approximately $0.7 million, compared to a net loss attributable

to noncontrolling interest of $2.7 million for the three months ended September 30, 2021.

The loss reflected ongoing investments in new

markets that were entered into during 2021 and 2022, partially offset by income generated by other markets.

Comparison of the

nine months ended September 30, 2022 and 2021

Nine Months Ended

September 30,

$ in Millions

Cost of revenues

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 on remeasurement of warrant liabilities

Gain (loss) on initial equity method investments

Gain on remeasurement of finance leases

Gain/(loss) on disposal of fixed assets

Other income (loss)

Total other income (expense)

Net income (loss) before income tax benefit (expense)

Income tax expense

Net income (loss)

Net loss attributable to noncontrolling interests

Net income (loss) attributable to stockholders of DocGo Inc.

and Subsidiaries

For the nine months ended September 30, 2022,

total revenues were $331.7 million, an increase of $134.3 million, or 68%, from the total revenues recorded in the nine months ended September

Transportation Services

For the nine months ended September 30, 2022,

Transportation Services revenue totaled $77.6 million, an increase of $12.0 million, or 18%, as compared with the nine months ended September

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

Volumes increased by approximately

13%, from 137,136 trips for the nine months ended September 30, 2021, to 154,534 trips for the nine months ended September 30, 2022.

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

2022, as well as acquisitions made during the third quarter of 2022.

Average trip price increased from $297 in the nine months ended September

30, 2021, to $362 the nine months ended September 30, 2022.

The increase in the average trip price in the 2022 period was due to a shift

in mix toward higher-priced transports with existing customers, as well as the acquisition of licenses to provide higher acuity transports,

resulting in higher prices per trip.

The average trip price also benefited from a 5.1% increase in the average Medicare reimbursement

rate for ambulance transports.

Mobile Health

For the nine months ended September 30, 2022,

Mobile Health revenue totaled $254.1 million, an increase of $122.3 million, or 93%, as compared with the nine months ended September

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.

However, during the third quarter of 2022, COVID-19 testing revenue declined

significantly, as expected, but these declines were outweighed by an expansion of the Company’s Mobile Health customer base and

broadening of the range of services provided.

Cost of Revenue

For the nine months ended September 30, 2022,

total cost of revenue (exclusive of depreciation and amortization) increased by 60% as compared to the nine months ended September 30,

2021, while revenue increased by approximately 68%.

Cost of revenue as a percentage of revenue decreased to 66.1% in the first nine months

of 2022 from 69.4% in the first nine months of 2021.

In absolute dollar terms, total cost of revenue

in the nine months ended September 30, 2022 increased by $82.3 million from the prior year period.

This was primarily attributable to

a $52.5 million increase in total compensation, reflecting higher headcount for both the Transportation Services and Mobile Health segments,

coupled with higher average hourly wages;

a $26.3 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, particularly in the first six months of 2022;

an $8.0 million increase in medical

supplies, due to the purchase of COVID-19 test kits and the need for increased PPE and related supplies, and the increased cost thereof

as a result of increased demand during the pandemic;

a $9.9 million increase in vehicle costs, driven by a continued increase in the Company’s

vehicle fleet and higher fuel and maintenance costs;

a $1.1 million increase in facilities and related expenses, due to the Company’s

geographic expansion;

a $2.1 million increase in travel expenses, relating to field personnel and other clinicians who traveled out of

their home regions to provide Mobile Health services;

and an increase of $0.9 million distributed among a variety of other cost of revenue

These items were partially offset by an $18.5 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 nine months ended September 30, 2022 amounted to $ 60.4 million, up $11.8

million, or 24.4%, from the nine months ended September 30, 2021.

Cost of revenues as a percentage of revenues increased to 77.8% in the

first nine months of 2022 from 74.1% in the prior year period, due to the decline in higher-margin, project-based standby revenue, combined

with the impact of higher hourly wages in certain markets and increased overtime for field employees during the first half of 2022 and

increased fuel costs, as described above.

For the Mobile Health segment, cost of revenues

(exclusive of depreciation and amortization) in the nine months ended September 30, 2022 amounted to $159.0 million, up 79.7%, from $

88.5 million in the nine months ended September 30, 2021.

Cost of revenues as a percentage of revenues decreased to 62.6% from 67.1%,

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

supply costs, as described above.

During the third quarter of 2022, subcontracted labor costs declined, reflecting the ongoing transition

of the company’s human resources base to Company-employed staff, reducing the reliance on higher-cost subcontracted labor.

Operating Expenses

For the nine months ended September 30, 2022,

the Company recorded $90.5 million of operating expenses compared to $60.5 million for the nine months ended September 30, 2021, an increase

As a percentage of revenue, operating expenses decreased from 30.6% in the first nine months of 2021 to 27.3% in the first nine

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

cost of corporate infrastructure.

The increase of $30.0 million related primarily to a $16.7 million increase in total compensation, which

includes costs for both direct and subcontracted staff, due to investments in and expansion of corporate infrastructure to support the

revenue growth;

a $0.8 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 $1.9 million

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

as well as recently acquired companies;

a $5.8 million increase in legal, accounting and other professional fees related to increased

revenue and related contract generation and SEC filing-related costs;

a $0.9 million increase in office-related expenses, owing to the

Company’s ongoing growth and geographic expansion;

a $1.5 million increase in IT infrastructure, driven by the Company’s business

and headcount expansion;

a $0.4 million increase in marketing expenses, primarily owing to the ongoing expansion of Mobile Health services;

a $0.6 million increase in bad debt expense, in line with the increase in overall revenues during the period;

and approximately $1.4 million

in other increases spread across a variety of other operating expense lines.

For the Transportation Services segment, operating

expenses in the nine months ended September 30, 2022 were $50.2 million, up $16.9 million, or 50.8%, from the nine months ended September

Operating expenses as a percentage of revenues increased to 64.6% from 50.8% for the nine months ended September 30, 2021, despite

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

to the Transportation Services segment.

The increased operating expenses, in dollar terms, in the nine months ended September 30, 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 nine months ended September 30, 2022 were $40.3 million, up 48.2%, from operating expenses of $27.2 million in the nine months

ended September 30, 2021.

Operating expenses as a percentage of revenues decreased to 15.9% from 20.6% in the first nine months of 2021,

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 first nine months of 2022, due to the faster rate of increase in Mobile Health

The increased operating expenses, in dollar terms, in 2022 were primarily driven by higher costs for payroll, subcontracted

labor costs, travel and entertainment, marketing and IT infrastructure, and facilities costs, as described above.

and acquisitions;

and a $0.8 million increase in rent and utilities, relating to the Company’s ongoing geographic expansion.

increased expenses were partially offset by a $3.0 million decline in bad debt expense, as allowances for doubtful accounts were adjusted

to better reflect the aging and collection history of the Company’s accounts receivable;

a $0.5 million decline in commissions,

in the absence of certain per-test and per-vaccination commissions that were paid in relation to certain mass COVID-19 testing and vaccination

projects in the first half of 2022;

and a $0.5 million decline in marketing costs, reflecting the cessation of certain marketing programs

that were run in conjunction with Mobile Health projects that have since expired;

and a $0.7 million across various operating expense

categories, including travel and entertainment, general office expenses and dues and subscriptions.

We anticipate that operating costs

over the remainder of 2023, as a percentage of total revenue, will decline from the levels seen in the first quarter of 2023, primarily

due to lower total compensation costs as a percentage of total revenue.

For the Mobile Health

segment, operating expenses in the three months ended March 31, 2023 were $7.2 million, compared to operating expenses of $10.2 million

in the three months ended March 31, 2022.

Operating expenses as a percentage of Mobile Health revenues decreased to 9.8% from 11.3% in

the first quarter of 2022.

The decrease in operating expenses was a result of a reduction in non-field headcount in the Mobile Health

segment, driven in part by the movement of Mobile Health management personnel into centralized corporate functional areas.

For the Transportation

Services segment, operating expenses in the three months ended March 31, 2023 were $10.5 million, up $1.72.0 million, or 18.8%, from

the three months ended March 31, 2022.

Operating expenses as a percentage of revenues decreased to 26.1% from 31.9% in the prior year

period, reflecting the increased revenues in the current period.

For the Corporate segment,

which represents primarily shared services that are not contained within the entities which comprise either the Mobile Health Services

or Transportation Services segments, operating expenses in the three months ended March 31, 2023 were $21.12 million, compared to $10.8

million in the three months ended March 31, 2022.

The increase was driven by higher headcount, as the Company built out its corporate

infrastructure, including areas such as Business Development, Product Development and Corporate Development;

as well as significantly

higher stock compensation expenses.

As a percentage of total consolidated revenues, Corporate expenses amounted to approximately 18.7%

of revenues in the first quarter of 2023, compared to 9.2% in the three months ended March 31, 2022.

Interest Income/(Expense), Net

For the nine months ended September 30, 2022,

the Company recorded $0.3 million of net interest income compared to $0.5 million of net interest expense in the nine months ended September

The shift from net interest expense in the prior year period to interest income in the current year period was due to a significantly

higher amount of interest earned in the first nine months of 2022, resulting from an increase in the Company’s cash balances in

interest-bearing accounts, coupled with higher rates of interest earned on balances in these accounts.

This was partially offset by an

increase in payments made for new leased vehicles, as the Company’s fleet expanded.

Gain from PPP Loan Forgiveness

During the nine months ended September 30, 2021,

the Company recorded a gain of $142,667 due to the forgiveness of a loan that one of its subsidiaries had obtained via the government’s

Paycheck Protection Program (PPP) in 2020.

No gain from loan forgiveness was recorded during the three months ended September 30, 2022.

For the three months

ended March 31, 2023, the Company recorded $809,172 of net interest income compared to $135,606 of interest expense in the three months

ended March 31, 2022.

This was due to a significantly higher amount of interest earned in the three months ended March 31, 2023, due to

an increase in the Company’s cash balances in income-bearing accounts, coupled with higher rates of interest earned on balances

in these accounts, which reflected significantly higher market interest rates.

Gain/(loss) on Remeasurement of Warrant Liabilities

During the nine months ended September 30, 2022,

the Company recorded a gain of approximately $1.1 million from the remeasurement of warrant liabilities.

The warrants are marked-to-market

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

warrant liabilities were outstanding in the prior year period.

During the three months ended March 31, 2023,

there were no gains or losses recorded relating to remeasurement of warrant liabilities, as warrants were redeemed during the third quarter

During the three months ended March 31, 2022, the Company recorded a loss of $58,749 from the remeasurement of warrant liabilities.

The warrants were marked-to-market in each reporting period, and this loss reflected the decrease in DocGo’s stock price relative

to the beginning of the first quarter of 2022.

Gain/(Loss) on Equity Method Investment

During the three months ended September 30, 2022,

the Company recorded a gain of $99,840, 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 fourth quarter of 2021, and as such, no gain

or loss was recorded in relation to an equity method investment in the same period in 2021.

Gain/(loss) from Remeasurement of Finance Leases

During the nine months ended September 30, 2022,

the Company recorded a gain of approximately $1.4 million, resulting from a change in estimated remaining liabilities under the terms

of its leases.

No such gain or loss was recorded in the prior year period.

During the three months ended March 31, 2023,

the Company recorded a loss on equity method investments of $115,286, which represented its share of the losses incurred by an entity

in which the Company had a minority interest, which was accounted for under the equity method.

During the three months ended March 31,

2022, the Company recorded a loss on equity method investments of $83,341 related to the same entity.

Gain/(loss) on Disposal of Fixed Assets

During the nine months ended September 30, 2021,

the Company recorded a loss of $27,730 on the disposal of fixed assets.

During the nine months ended September 30, 2022, the Company recorded

a gain of $42,667 on the disposal of fixed assets.

Income Tax (Expense)/Benefit

During the nine months ended September 30, 2022,

the Company recorded income tax expense of $1.2 million, compared to an income tax expense of $0.6 million in the nine months ended September

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 Interest

For the nine months ended September 30, 2022, the

Company had net loss attributable to noncontrolling interest of approximately $ 2.9 million, compared to a net loss attributable to noncontrolling

interest of $1.3 million for the nine months ended September 30, 2021.

The increased loss in the first nine months of 2022 reflected ongoing

investments in new markets that were entered into during 2021 and 2022.

During the three months

ended March 31, 2023, the Company recorded a loss on the disposal of fixed assets of $54,839.

No such gain or loss was recorded during

the three months ended March 31, 2022.

Income Tax Benefit/(Expense)

During the three months

ended March 31, 2023, the Company recorded income tax benefit of $2.1 million.

For the three months ended March 31, 2022, the Company

recorded an income tax expense of $0.4 million.

The income tax benefit reflects a pretax loss recorded during the three months ended March

31, 2023, compared to pretax income in the prior year period.

The income tax benefit in the current year period includes income as well

as state income taxes in jurisdictions the Company entered during the past year and current period.

Net Loss Attributable to Noncontrolling Interest

For the three months

ended March 31, 2023, the Company had a net loss attributable to noncontrolling interest of approximately $0.5 million, compared to a

net loss attributable to noncontrolling interest of $1.3 million for the three months ended March 31, 2022.

The decreased loss reflected

improved performance in most of the Company’s joint venture ongoing investments in new markets in the three months ended March 31,

Liquidity and Capital Resources

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

Although the Company generated positive net income in the three and nine months ended September 30, 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.

As the Company’s customer base increasingly features large

municipal entities, who tend to demand longer payment terms than do other customer segments, the Company’s working capital requirements

are expected to increase.

In addition, the Company might seek to take advantage of opportunities to secure favorable pricing for supplies

and services from its vendors by agreeing to shorter payment terms, or prepaying.

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 markets.

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

Additionally, as the impact of the COVID-19 pandemic 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 may need or choose to raise additional capital through debt or equity financings.

On November 1, 2022, subsequent to the end of the third quarter of

2022, the Company entered into a revolving loan and security agreement with two banks, with one bank as the administrative agent (the

“Lenders”), with a maximum revolving advance amount of $90,000,000.

The revolving facility includes the ability for the Company

to request an increase to the commitment by an additional up to $50,000,000, though no Lender (nor the Lenders collectively) are obligated

to increase their respective commitments.

Borrowings under the revolving facility bear interest at a per annum rate equal to, (i) at the

Company’s option, the (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin.

The applicable margins

are based on the Company’s consolidated net leverage ratio, adjusted on a quarterly basis.

The initial applicable margins are 1.25%

for an adjusted term SOFR loan and 0.25% for a base rate loan and will be updated based on the consolidated net leverage ratio reported

in the compliance certificate.

The revolving facility matures on the five-year anniversary of the closing date, November 1, 2027.

revolving facility is secured by a first-priority lien on substantially all of the Company’s present and future personal assets

and intangible assets.

The revolving facility is subject to certain financial covenants such as a net leverage ratio and interest coverage

ratio, as defined in the agreement.

The Company has not made any draws under the facility and there is no amount outstanding.

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” and Note 20 “Subsequent Events” to the Unaudited Condensed Consolidated

Financial Statements) will be sufficient to satisfy operating requirements for at least the next twelve months.

Since inception, DocGo

has completed three equity financing transactions as its principal source of liquidity.

Generally, the Company has utilized equity raised

to finance operations, investments in assets, ambulance operating licenses and to fund accounts receivable.

The Company has also funded

these activities through operating cash flows.

In November 2021, upon the completion of the merger between Motion and Ambulnz, the Company

received proceeds of approximately $158.1 million, net of transaction expenses.

However, even when the Company generates positive net

income, operating cash flows are not always 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 need

to use 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, DocGo’s level of investment in technology and ongoing technology development,

and rate of growth in existing markets and into new markets.

Capital requirements may also be affected by factors outside of the Company’s

control, such as interest rates, rising inflation, financial institution instability or failure 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 on the Company’s

market environment and operations evolves, the Company routinely assesses 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 to, or choose to, raise

additional capital through debt or equity financings.

On November 1, 2022, the

Company entered into a revolving loan and security agreement with two banks, with one bank acting as the administrative agent (the “Lenders”),

with an initial maximum commitment amount of $90,000,000.

The revolving facility includes the ability for the Company to request an increase

to the commitment by an additional amount of up to $50,000,000, though no Lender (nor the Lenders collectively) are obligated to increase

their respective commitments.

Borrowings under the revolving facility bear interest at a per annum rate equal to (i) at the Company’s

option, the (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin.

The applicable margins are based on

the Company’s consolidated net leverage ratio, adjusted on a quarterly basis.

The initial applicable margins are 1.25% for an adjusted

term SOFR loan and 0.25% for a base rate loan and will be updated based on the Company’s consolidated net leverage ratio.

The revolving

facility matures on November 1, 2027.

The revolving facility is secured by a first-priority lien on substantially all of the Company’s

present and future personal assets and intangible assets.

The revolving facility is subject to certain financial covenants, such as a

net leverage ratio and interest coverage ratio, as defined in the agreement.

As of the date of the filing of this Quarterly Report on

Form 10-Q, the Company has not made any draws under the facility and there are no amounts outstanding.

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 9, “Line of Credit” to the unaudited Condensed Consolidated Financial Statements)

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

Capital Resources

Working Capital as of September 30, 2022 and 2021

As of September 30,

Comparison as of March 31, 2023 and March

$ in Millions

3 unchanged sentences

Total working capital

As of September 30, 2022, available cash totaled

$169.6 million, which represented an increase of $130.0 million as compared to September 30, 2021, reflecting the receipt of the proceeds

from the merger described above, as well as positive cash flow generated by operations, partially offset by cash used for acquisitions

in the third quarter of 2022.

As of September 30, 2022, working capital amounted to $180.9 million, which represented an increase of $151.1

million as compared to September 30, 2021, primarily reflecting the increased cash balance.

Increased accounts receivable, reflecting

the growth of the business in the second half of 2021 and the first nine months 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.

Nine months ended September 30, 2022 and 2021

As of September 30,

As of March 31, 2023, available cash totaled $120.1 million, which

represented a decrease of $68.3 million as compared to March 31, 2022, as acquisitions made during the second half of 2022 and in the

first quarter of 2023 outweighed cash flow from operations.

As of March 31, 2023, working capital amounted to $149.4 million, which represented

a decrease of $57.8 million as compared to March 31, 2022, primarily reflecting the reduced cash balance.

Increased accounts receivable

in the three months ended March 31, 2023, which reflected the growth of the business and a shift towards higher credit quality customers,

who have longer payment terms, outweighed the increase in current liabilities in the first quarter of 2023, which reflected the growth

of the business and amounts due to the seller and contingent consideration resulting from acquisitions.

Three months ended March 31, 2023 and 2022

Three Months Ended

$ in Millions

6 unchanged sentences

Operating Activities

During the nine months ended September 30, 2022,

operating activities provided $37.6 million of cash, aided by net income of $23.6 million.

Non-cash charges amounted to $11.9 million

and included $5.0 million in depreciation of property and equipment and right-of-use assets, $2.2 million from amortization of intangible

assets, $2.7 million in bad debt expense primarily related to a provision for potential uncollectible accounts receivable and $4.6 million

of stock compensation expense.

These were partially offset by non-cash gains of $1.4 million relating to the remeasurement of finance

lease liabilities, $1.1 million from the remeasurement of warrant liabilities and a gain of $0.1 from an investment that is accounted

for under the equity method.

Changes in assets and liabilities resulted in approximately $2.1 million in increase to operating cash flow,

as a $2.9 million decrease in accounts receivable, a $0.9 million decrease in other assets and a $2.6 million increase in accrued liabilities

outweighed the effect of a $0.3 million increase in prepaid expenses and a $4.0 million decline in accounts payable..

During the nine months ended September 30, 2021,

operating activities provided $6.9 million of cash, despite a net loss of $1.1 million.

Non-cash charges amounted to $8.8 million and

included $4.1 million resulting from the depreciation of property and equipment and right-of-use assets, $1.4 million from amortization

of intangible assets, $1.2 million of stock compensation expense, $2.2 million of bad debt expense primarily related to a provision for

potential uncollectible accounts receivable, partially offset by a non-cash gain of $0.1 million from the forgiveness of a PPP loan.

in assets and liabilities resulted in approximately $0.8 million in negative operating cash flow and were primarily driven by a $28.8

million increase in accounts receivable and a $4.5 million increase in prepaid expenses and other current assets, as well as a $1.8 million

increase in other assets, which were partially offset by a $9.4 million increase in accounts payable and a $24.9 million increase in accrued

During the three months ended

March 31, 2023, operating activities used $23.1 million of cash, driven by a net loss of $3.9 million.

Non-cash charges amounted to $9.4

million and included $2.3 million in depreciation of property and equipment and right-of-use assets, $1.4 million from amortization of

intangible assets, $8.5 million of stock compensation expense, and a $0.1 million loss on an equity investment.

These were partially offset

by a $1.9 million reduction in bad debt expense related to an adjustment in the provision for potential uncollectible accounts receivable,

and a $1.0 gain from a deferred tax asset.

Changes in assets and liabilities resulted in approximately $28.6 million in negative cash

flow, as a $24.7 million increase in accounts receivable, a $2.6 million decrease in accounts payable, a $1.5 million decrease in accrued

liabilities and a $0.2 million increase in prepaid expenses outweighed a $0.3 million reduction in other assets.

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.

Investing Activities

During the nine months ended September 30, 2022,

investing activities used $37.8 million of cash and consisted of the acquisition of property and equipment totaling approximately $2.0

million, the acquisition of intangibles in the amount of $2.0 million and $33.8 million in the acquisition of businesses, primarily relating

to acquisitions the Company completed in the third quarter of 2022.

During the nine months ended September 30, 2021,

investing activities used $4.4 million of cash and primarily consisted of the acquisition of property and equipment totaling $2.8 million

and the acquisition of intangibles in the amount of $1.6 million to support growth of new transportation and mobile health markets.

During the three months

ended March 31, 2023, investing activities used $1.7 million of cash and consisted of the acquisition of property and equipment totaling

$2.0 million and the acquisition of intangibles in the amount of $1.4 million, partially offset by $1.6 million in cash added via an acquisition

and $0.1 million in proceeds from the disposal of property and equipment.

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.

Financing Activities

During the nine months ended September 30, 2022,

financing provided $0.7 million, including $2.0 million in non-controlling interest contributions, $1.9 million in proceeds from the exercise

of stock options and proceeds of $1.0 million from a revolving credit line.

These factors were partially offset by a $1.0 million decrease

in amounts due to seller, $0.6 million in repayments of notes payable, $0.5 million in common stock repurchased, and $2.1 in payments

on obligations under the terms of finance leases.

During the nine months ended September 30, 2021, financing

activities provided $6.0 million of cash, primarily due to proceeds of $8.0 million from a revolving credit line, as well as $0.3 million

in non-controlling interest contributions.

These factors were partially offset by $1.8 million in payments on obligations under the terms

of finance leases and $0.5 in repayments of notes payable.

Future minimum annual maturities of notes payable as of the nine months

ended September 30, 2022 are as follows:

During the three months ended March 31, 2023, financing activities

used $12.0 million of cash, due to a reduction of $11.5 million in amounts due to seller, as deferred payments were made under the terms

of previously-closed acquisitions, $0.8 million in payments under the terms of finance leases, and $0.1 million in repayments of notes

These items were partially offset by $0.4 million in proceeds from the exercise of stock options.

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 noncontrolling 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 $0.1 million of equity cost.

Future minimum annual maturities of notes payable as of March 31, 2023

were as follows:

2023, remaining

2 unchanged sentences

Long-term portion of notes payable

Future minimum lease payments under finance leases

as of the nine months ended September 30, 2022, and for the following five fiscal years and thereafter are as follows:

Future minimum lease

payments under operating leases as of March 31, 2023, and for the following four fiscal years and thereafter are as follows:

2023, remaining

3 unchanged sentences

Present value of future minimum lease payments

Future minimum lease payments under operating

leases as of the nine months ended September 30, 2022, and for the following five fiscal years and thereafter are as follows:

Future minimum lease

payments under finance leases as of March 31, 2023, and for the following four fiscal years and thereafter are as follows:

2023, remaining

3 unchanged sentences

Present value of future minimum lease payments

Share Repurchases

On May 24, 2022, the Board approved a share repurchase

program to purchase up to $40 million of the Company’s common stock (the “Program”).

The Program does not obligate the

Company to acquire any specific number of shares and will expire on November 24, 2023, and the Program may be suspended, extended, modified

or discontinued at any time.

Under the Program, repurchases can be made using a variety of methods, which may include open market purchases,

block trades, privately negotiated transactions and/or a non-discretionary trading plan, all in compliance with the rules of the SEC and

other applicable legal requirements.

The timing, manner, price and amount of any common stock repurchases under the Program are determined

by the Company in its discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions.

As of September 30, 2022, $39.5 million remained available for share repurchases pursuant to the Program.

No shares were repurchased by

the Company during the three months ended September 30, 2022.

Critical Accounting Estimates

For a discussion of our

critical accounting policies, refer to the section entitled “Critical Accounting Policies” in our Annual Report on Form 10-K

for the year ended December 31, 2021.

Quantitative and Qualitative Disclosures about Market Risk

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.

Critical Accounting

Basis of Presentation

The Company’s unaudited Condensed Consolidated Financial Statements

are presented in conformity with accounting principles generally accepted in the United States of America (“U (“U.S.

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

The unaudited Condensed Consolidated

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

All intercompany accounts and

transactions are eliminated upon consolidation.

Noncontrolling interests (“NCI”) in the unaudited Condensed Consolidated Financial

Statements represent the portion of consolidated joint ventures and a variable interest entity (“VIE”) in which the Company

does not have direct equity ownership.

Accounts and transactions between consolidated entities have been eliminated.

Pursuant to the Business

Combination, the merger between Motion and Ambulnz, Inc.

was accounted for as a reverse recapitalization in accordance with U.S.

(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.

Principles of Consolidation

The Company’s unaudited

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

All significant intercompany transactions

and balances have been eliminated in these unaudited 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 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.

Net loss for the VIE was $186,637 for the three months ended March

The VIE’s total assets, all of which were current, amounted to $635,620 as of March 31, 2023.

Total liabilities, all of

which were current for the VIE, was $532,127 as of March 31, 2023.

The VIE’s total stockholders’ deficit was $103,493 as of

March 31, 2023.

Business Combinations

The 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.

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.

Changes 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 in earnings.

For transactions that are

business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase.

The Company capitalizes acquisition-related

costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business

combinations.

The 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.

Goodwill and Indefinite-Lived Intangible

Goodwill represents the excess

of the total purchase consideration over the fair value of the identifiable assets acquired and liabilities assumed in a business combination.

Goodwill is not amortized but is tested for impairment at the reporting unit level annually on December 31 or more frequently if events

or changes in circumstances indicate that it is more likely than not to be impaired.

These events include:

(i) severe adverse industry

or economic trends;

(ii) significant company-specific actions, including exiting an activity in conjunction with restructuring of operations;

(iii) current, historical or projected deterioration of our financial performance;

or (iv) a sustained decrease in our market capitalization,

as indicated by our publicly quoted share price, below our net book value.

On February 3, 2023, Ambulnz

Health, LLC (“Health”), commenced an assignment for the benefit of creditors (“ABC”) pursuant to California law.

An ABC is a liquidation process governed by state law (California law in this instance) that is an alternative to a bankruptcy case under

Prior to commencing the ABC, Health ceased business operations and all of its employees were terminated and treated in accordance

with California law.

In the ABC, all of Health’s assets were transferred to an assignee (the “Assignee”) who acts as

a fiduciary for creditors and in a capacity equivalent to that of a bankruptcy trustee.

The Assignee is responsible for liquidating the

Similar to a bankruptcy case, there is a claims process.

Creditors of Health will receive notice of the ABC and a proof of claim

form and are required to submit a proof of claim in order to participate in distribution of net liquidation proceeds by the Assignee.

Based on such filing for

Health, the Company impaired the goodwill assigned to that reporting unit as of December 31, 2022 by approximately $5.1 million.

Revenue Recognition

On January 1, 2019, the Company

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

To 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.

The Company generates revenues from the provision of (1) 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

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

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

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

collections by each payor.

Income taxes are recorded

in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability

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 unaudited Condensed Consolidated Financial Statements.

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