What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-11-06 compared with 2023-08-08 · 424 added, 338 removed, 754 unchanged (50% of the section changed)

Financial Statements

Unaudited Condensed Consolidated Balance Sheets as of June 30 , 202 3 (Unaudited) and December 31, 20 2 2

Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the Three and Six Months Ended June 30, 202 3 and 20 2 2

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 202 3 and 202 2

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 202 3 and 202 2

Condensed Consolidated Balance Sheets as of September 30, 2023 ( U n a u d i t e d ) and December 31, 2022

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income for the Three and Nine Months Ended September 30, 2023 and 2022

Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022

Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022

Notes to Unaudited Condensed Consolidated Financial Statements

and Subsidiaries

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,

2023 December 31,

2 unchanged sentences

Cash and cash equivalents $ 52,922,517 $ 157,335,323

Accounts receivable, net of allowance of $ 4,204,532 and $ 7,818,702 as of June 30, 2023 and December 31, 2022, respectively

Accounts receivable, net of allowance of $ 4,778,401 and $ 7,818,702 as of September 30, 2023 and December 31, 2022, respectively

207,324,368 102,995,397

8 unchanged sentences

Finance lease right-of-use assets 8,566,308 9,039,663

Equity method investment 392,118 597,977

Equity method investments 447,125 597,977

Deferred tax assets 8,908,731 9,957,967

19 unchanged sentences

Common stock ($ 0.0001 par value;

500,000,000 shares authorized as of June 30, 2023 and December 31, 2022;

103,762,092 and 102,411,162 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

500,000,000 shares authorized as of September 30, 2023 and December 31, 2022;

103,874,539 and 102,411,162 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

10,387 10,241

9 unchanged sentences

and Subsidiaries

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Revenue, net $ 125,486,760 $ 109,519,304 $ 238,489,463 $ 227,410,856

Revenues, net $ 186,552,910 $ 104,319,894 $ 425,042,373 $ 331,730,750

Cost of revenues (exclusive of depreciation and amortization, which is shown separately below) 131,502,046 71,254,838 296,346,420 219,418,873

6 unchanged sentences

Total expenses 177,844,955 100,120,704 421,661,051 309,979,238

Income (loss) from operations 1,575,954 7,457,757 ( 5,326,633 ) 17,552,322

Income from operations 8,707,955 4,199,190 3,381,322 21,751,512

Other income (expenses):

Interest income (expense), net 521,872 98,276 1,331,044 ( 37,330 )

Gain on remeasurement of warrant liabilities — 3,027,766 — 2,969,017

(Loss) gain on initial equity method investments ( 90,573 ) 89,810 ( 205,859 ) 6,469

Interest income, net 346,376 334,221 1,677,420 296,891

(Loss) gain on remeasurement of warrant liabilities — ( 1,831,947 ) — 1,137,070

Change in fair value of contingent liability 159,974 — 159,974 —

(Loss) gain on equity method investments ( 95,503 ) 93,371 ( 301,362 ) 99,840

Gain on remeasurement of finance leases 4,834 — 4,834 1,388,273

(Loss) gain on disposal of fixed assets ( 9,983 ) 42,667 ( 163,452 ) 42,667

Other (expense) income ( 920,058 ) 15,640 ( 705,178 ) 11,387

Total other (expense) income ( 587,389 ) 4,619,765 266,538 4,337,816

Net income (loss) before income tax benefit (expense) 988,565 12,077,522 ( 5,060,095 ) 21,890,138

Income tax benefit (provision) 355,054 ( 321,660 ) 2,484,924 ( 761,839 )

Net income (loss) 1,343,619 11,755,862 ( 2,575,171 ) 21,128,299

Net income (loss) attributable to noncontrolling interests 3,354,886 ( 979,791 ) 2,901,766 ( 2,237,048 )

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

Other income (expense) 43,353 30,900 ( 661,825 ) 42,288

Total other income (expense) 449,051 ( 1,330,788 ) 715,589 3,007,029

Net income before income tax provision 9,157,006 2,868,402 4,096,911 24,758,541

Income tax (provision) ( 4,526,767 ) ( 401,916 ) ( 2,041,843 ) ( 1,163,755 )

Net income 4,630,239 2,466,486 2,055,068 23,594,786

Net (loss) income attributable to noncontrolling interests ( 134,682 ) ( 687,944 ) 2,767,084 ( 2,924,992 )

Net income attributable to stockholders of DocGo Inc.

and Subsidiaries 4,764,921 3,154,430 ( 712,016 ) 26,519,778

Other comprehensive (loss) income

Other comprehensive income

Foreign currency translation adjustment ( 582,471 ) 248,283 66,965 252,854

Total comprehensive (loss) income $ ( 1,605,489 ) $ 12,746,087 $ ( 4,827,501 ) $ 23,369,918

Net (loss) income per share attributable to DocGo Inc.

Total comprehensive income $ 4,182,450 $ 3,402,713 $ ( 645,051 ) $ 26,772,632

Net income per share attributable to DocGo Inc.

and Subsidiaries - Basic $ 0.05 $ 0.03 $ ( 0.01 ) $ 0.26

Weighted-average shares outstanding - Basic 103,874,845 98,960,538 103,351,345 100,725,697

Net (loss) income per share attributable to DocGo Inc.

Net income per share attributable to DocGo Inc.

and Subsidiaries - Diluted $ 0.05 $ 0.03 $ ( 0.01 ) $ 0.24

15 unchanged sentences

Equity cost — — ( 19,570 ) — — — ( 19,570 )

restricted stock (Note 4) — — — — — —

Noncontrolling interest contribution — — — — — 2,063,000 2,063,000

8 unchanged sentences

Stock-based compensation — — 1,999,619 — — — 1,999,619

restricted stock (Note 4) 8,258 8 82,297 — — — 82,305

restricted stock 8,258 8 82,297 — — — 82,305

Net loss attributable to noncontrolling interests — — — — — ( 979,791 ) ( 979,791 )

3 unchanged sentences

Balance - June 30, 2022 100,685,290 $ 10,564 $ 287,301,467 $ ( 40,191,367 ) $ ( 27,930 ) $ 7,300,962 $ 254,393,696

Exercise of stock options 378,941 38 728,465 — — — 728,503

Cashless exercise of options 354,276 35 ( 354 ) — — — ( 319 )

Stock-based compensation — — 1,015,660 — — — 1,015,660

restricted stock — — 95,543 — — — 95,543

Share warrants conversion 1,406,371 141 12,381,432 — — — 12,381,573

Net loss attributable to noncontrolling interests — — — — — ( 687,944 ) ( 687,944 )

Foreign currency translation — — — — ( 248,283 ) — ( 248,283 )

Net income attributable to stockholders of DocGo Inc.

and Subsidiaries

— — — 3,154,430 — — 3,154,430

Balance - September 30, 2022 102,824,878 $ 10,778 $ 301,522,213 $ ( 37,036,937 ) $ ( 276,213 ) $ 6,613,018 $ 270,832,859

Common Stock Additional

7 unchanged sentences

Balance - December 31, 2022 102,411,162 $ 10,241 $ 301,451,435 $ ( 28,972,216 ) $ 741,206 $ 5,696,725 $ 278,927,391

Equity cost — — — — — — —

Noncontrolling interest contribution — — — — — — —

Common stock repurchased — — — — — — —

Exercise of stock options 96,101 10 249,705 — — — 249,715

restricted stock (Note 4) — — 167,175 — — — 167,175

restricted stock — — 167,175 — — — 167,175

Stock-based compensation 424,911 42 8,181,549 — — — 8,181,591

Ambulnz Health liquidation — — — 70,284 — — 70,284

Health liquidation — — — 70,284 — — 70,284

Net loss attributable to noncontrolling interests — — — — — ( 453,120 ) ( 453,120 )

8 unchanged sentences

Exercise of stock options 260,410 26 706,379 — — — 706,405

Stock based compensation, net of tax settled in shares 92,033 9 1,778,001 — — — 1,778,010

Stock-based compensation 334,791 33 3,827,314 — — — 3,827,347

Shares withheld for taxes ( 242,758 ) ( 24 ) ( 2,049,313 ) — — — ( 2,049,337 )

Net income attributable to noncontrolling interests — — — — — 3,354,886 3,354,886

3 unchanged sentences

Balance - June 30, 2023 103,762,092 $ 10,376 $ 312,101,281 $ ( 33,729,702 ) $ 1,390,642 $ 4,087,982 $ 283,860,579

Exercise of stock options 88,837 8 425,995 — — — 426,003

Cashless exercise of options 6,374 1 ( 1 ) — — — —

Stock-based compensation 30,650 3 3,335,707 — — — 3,335,710

Shares withheld for taxes ( 13,414 ) ( 1 ) ( 117,644 ) — — — ( 117,645 )

Net loss attributable to noncontrolling interests — — — — — ( 134,682 ) ( 134,682 )

Foreign currency translation — — — — ( 582,471 ) — ( 582,471 )

Net income attributable to stockholders of DocGo Inc.

and Subsidiaries — — — 4,764,921 — — 4,764,921

Balance - September 30, 2023 103,874,539 $ 10,387 $ 315,745,338 $ ( 28,964,781 ) $ 808,171 $ 3,953,300 $ 291,552,415

The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements.

1 unchanged sentence

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net (loss) income $ ( 2,575,171 ) $ 21,128,299

Adjustments to reconcile net (loss) income to net cash

(used in) provided by operating activities:

Net income $ 2,055,068 $ 23,594,786

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation of property and equipment 4,697,717 2,592,244

1 unchanged sentence

Amortization of finance lease right-of-use assets 2,822,982 2,391,989

Loss on disposal of assets 153,469 —

Loss (gain) on disposal of assets 163,452 ( 42,667 )

Deferred tax asset 1,049,236 —

Loss (gain) on equity method investment 205,859 ( 30,290 )

Loss (gain) on equity method investments 301,362 ( 99,840 )

Bad debt expense ( 311,441 ) 2,702,979

3 unchanged sentences

Gain on remeasurement of warrant liabilities — ( 1,137,070 )

Change in fair value of contingent consideration ( 159,974 ) —

Changes in operating assets and liabilities:

9 unchanged sentences

Acquisition of businesses ( 20,203,464 ) ( 33,843,373 )

Equity method investments ( 150,510 ) —

Proceeds from disposal of property and equipment 274,210 —

6 unchanged sentences

Proceeds from exercise of stock options 1,549,298 1,880,568

Payments for taxes related to shares withheld for employee taxes ( 2,166,982 ) —

Common stock repurchased — ( 497,759 )

9 unchanged sentences

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

Nine Months Ended

September 30,

Supplemental disclosure of cash and non-cash transactions:

4 unchanged sentences

Fixed assets acquired in exchange for notes payable $ 1,369,060 $ 819,231

Acquisition of remaining Ambulnz-FMC North America, LLC.

through Due to seller and issuance of stock $ 7,000,000 $ —

Acquisition of Cardiac RMS, LLC $ 1,000,000 $ —

Acquisition of remaining FMC NA through due to seller and issuance of stock $ 7,000,000 $ —

Acquisition of CRMS through issuance of stock $ 1,000,000 $ —

Receivable exchanged for trade credits $ 1,500,000 $ —

Reconciliation of cash and restricted cash

6 unchanged sentences

Description of Organization and Business Operations

On November 5, 2021 (the “Closing Date”), DocGo Inc., a Delaware corporation (formerly known as Motion Acquisition Corp prior to the Closing Date, “Motion” and after the Closing Date, “DocGo”), consummated the previously announced business combination (the “Closing”) pursuant to that certain Agreement and Plan of Merger dated March 8, 2021 (the “Merger Agreement”), by and among Motion Acquisition Corp., a Delaware corporation (“Motion”), Motion Merger Sub Corp., a Delaware corporation and a direct wholly owned subsidiary of Motion (“Merger Sub”), and Ambulnz, Inc., a Delaware corporation (“Ambulnz”).

In connection with the Closing, the registrant changed its name from Motion Acquisition Corp.

On November 5, 2021 (the “Closing Date”), DocGo Inc., a Delaware corporation, then known as Motion Acquisition Corp.

(collectively with its subsidiaries, the “Company”), consummated a business combination pursuant to that certain Agreement and Plan of Merger, dated March 8, 2021 (the “Merger Agreement”), by and among the Company, Motion Merger Sub Corp., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), and Ambulnz, Inc., a Delaware corporation (“Ambulnz”).

The transactions contemplated by the Merger Agreement are referred to herein as the “Business Combination.” In connection with the closing of the Business Combination (the “Closing”), the Company changed its name from Motion Acquisition Corp.

to DocGo Inc.

As contemplated by the Merger Agreement and as described in Motion’s definitive proxy statement/consent solicitation/prospectus filed with the U.S.

Securities and Exchange Commission (the “SEC”) on October 14, 2021 , Merger Sub was merged with and into Ambulnz, with Ambulnz continuing as the surviving corporation (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”).

As a result of the Merger, Ambulnz is a wholly-owned subsidiary of DocGo and each share of Series A preferred stock of Ambulnz, no par value (“Ambulnz Preferred Stock”), Class A common stock of Ambulnz, no par value (“Ambulnz Class A Common Stock”), and Class B common stock of Ambulnz, no par value (“Ambulnz Class B Common Stock,” together with Ambulnz Class A Common Stock, “Ambulnz Common Stock”) was cancelled and converted into the right to receive a portion of merger consideration issuable as common stock of DocGo, par value $ 0.0001 (“Common Stock”), pursuant to the terms and conditions set forth in the Merger Agreement.

In connection with the Business Combination, DocGo raised $ 158.0 million of net proceeds.

This amount was comprised of $ 43.4 million of cash held in Motion’s trust account from its initial public offering, net of DocGo’s transaction costs and underwriters’ fees of $ 9.6 million, and $ 114.6 million of cash in connection with the concurrent PIPE private placement of shares of common stock to certain investors at a price of $ 10.00 per share (the "PIPE Financing"), net of $ 10.4 million in transaction costs in connection with the PIPE Financing.

As contemplated by the Merger Agreement and as described in the Company’s definitive proxy statement/consent solicitation/prospectus filed with the U.S.

Securities and Exchange Commission (the “SEC”) on October 14, 2021, Merger Sub merged with and into Ambulnz, with Ambulnz continuing as the surviving corporation (the “Merger”).

As a result of the Merger, Ambulnz became a wholly owned subsidiary of the Company and each share of Series A preferred stock of Ambulnz, no par value (“Ambulnz Preferred Stock”), Class A common stock of Ambulnz, no par value (“Ambulnz Class A Common Stock”), and Class B common stock of Ambulnz, no par value (“Ambulnz Class B Common Stock,” and together with Ambulnz Class A Common Stock, “Ambulnz Common Stock”) was cancelled and converted into the right to receive a portion of the merger consideration issuable as common stock of the Company, par value $ 0.0001 (“Common Stock”), pursuant to the terms and conditions set forth in the Merger Agreement.

In connection with the Business Combination, the Company raised $ 158,000,000 of net proceeds.

This amount consisted of (i) $ 43,400,000 of cash held in the Company’s trust account established in connection with its initial public offering, net of the Company’s transaction costs and underwriters’ fees of $ 9,600,000 , and (ii) $ 114,600,000 of cash from the sale of shares of Common Stock to certain investors at a price of $ 10.00 per share in a private placement that closed concurrently with the Business Combination (the “PIPE Financing”), net of $ 10,400,000 in transaction costs in connection with the PIPE Financing.

These transaction costs consisted of banking, legal, and other professional fees, which were recorded as a reduction to additional paid-in capital.

and its subsidiaries (collectively, the “Company”) is a healthcare transportation and mobile health services company that uses proprietary dispatch and communication technology to provide quality healthcare transportation and healthcare services in major metropolitan cities in the United States (“U.S.”) and the United Kingdom (“U.K.”).

Mobile Health performs in-person care directly to patients in the comfort of their homes, workplaces and other non-traditional locations.

Ambulnz, LLC was originally formed in Delaware on June 17, 2015, as a limited liability company.

On November 1, 2017, with an effective date of January 1, 2017, Ambulnz, LLC converted its legal structure from a limited liability company to a C-corporation and changed its name to Ambulnz, Inc.

is the sole owner of Ambulnz Holdings, LLC (“Holdings”) which was formed in the state of Delaware on August 5, 2015, as a limited liability company.

The Company is a healthcare transportation and mobile health services company that uses proprietary dispatch and communication technology to provide quality healthcare transportation and healthcare services in major metropolitan cities in the United States (“U.S.”) and the United Kingdom (“U.K.”).

Ambulnz was originally formed in Delaware on June 17, 2015 as Ambulnz, LLC, a limited liability company.

On November 1, 2017, with an effective date of January 1, 2017, Ambulnz converted its legal structure from a limited liability company to a C-corporation and changed its name to Ambulnz, Inc.

Ambulnz is the sole owner of Ambulnz Holdings, LLC (“Holdings”), which was formed in the state of Delaware on August 5, 2015 as a limited liability company.

Holdings is the owner of multiple operating entities incorporated in various states in the U.S.

as well as within England and Wales, United Kingdom.

The Company derives revenue primarily from two operating segments:

as well as within England and Wales, U.K.

The Company derives revenue from two operating segments:

Mobile Health Services and Transportation Services.

Mobile Health Services include services performed at homes, offices and other temporary or fixed locations, and event services which include on-site healthcare support at sporting events and concerts.

Mobile Health Services include services performed at homes and offices, COVID-19 testing and vaccinations, and event services such as 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.

6 unchanged sentences

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S.

GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting.

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the U.S.

GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting.

Certain information and disclosures normally included in the financial statements prepared in accordance with U.S.

2 unchanged sentences

The Consolidated Balance Sheet as of December 31, 2022 included herein was derived from the audited financial statements as of that date but does not include all disclosures including notes required by U.S.

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

Principles of Consolidation

The unaudited Condensed Consolidated Financial Statements include the accounts and operations of DocGo Inc.

and its subsidiaries.

All intercompany accounts and transactions are eliminated upon consolidation.

Noncontrolling interests (“NCI”) on the unaudited Condensed Consolidated Financial Statements represent a portion of consolidated joint ventures and a variable interest entity in which the Company does not have direct equity ownership.

Accounts and transactions between consolidated entities have been eliminated.

Certain amounts in the prior years’ consolidated statements of changes in stockholders’ equity and statements of cash flows have been reclassified to conform to the current year presentation.

Pursuant to the Business Combination, the merger between Motion and Ambulnz was accounted for as a reverse recapitalization in accordance with U.S.

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

GAAP (the “Reverse Recapitalization”).

Under this method of accounting, Motion was treated as the “acquired” company for financial reporting purposes.

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

Under this method of accounting, the Company was treated as the “acquired” company for financial reporting purposes.

Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Ambulnz stock for the net assets of the Company, accompanied by a recapitalization.

The net assets of the Company 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.

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 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 accompanying 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 Mobile Medical Healthcare P.C.

(“MD1”, formerly known as "MD1 Medical Care P.C.") which contracts with physicians and other health professionals in order to provide services to the Company.

Further, Ambulnz was determined to be the accounting acquirer in the transaction, and 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.

The Company holds a variable interest in Mobile Medical Healthcare P.C., formerly known as MD1 Medical Care P.C.

(“MD1”), which contracts with physicians and other health professionals in order to provide services to the Company.

MD1 is considered a variable interest entity (“VIE”) since it does not have sufficient equity to finance its activities without additional subordinated financial support.

An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits—that is, it has (1) the power to direct the activities of a VIE that most significantly impacts the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits).

The Company has the power and rights to control all activities of MD1 and funds and absorbs all losses of the VIE and appropriately consolidates MD1.

Net income for the VIE was $ 120,217 for the six months ended June 30, 2023.

The VIE’s total assets, all of which were current assets apart from a fixed asset amounting to $ 5,237 , amounted to $ 773,458 as of June 30, 2023.

Total liabilities, all of which were current for the VIE, was $ 361,516 as of June 30, 2023.

The VIE’s total stockholders’ equity was $ 411,941 as of June 30, 2023.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits — that is, if it has (1) the power to direct the activities of the 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 MD1 and therefore appropriately consolidates MD1 as a VIE.

Net income for MD1 was $ 16,839 for the nine months ended September 30, 2023.

MD1’s total assets, all of which were current assets apart from other assets amounting to $ 15,248 , amounted to $ 635,777 as of September 30, 2023.

Total liabilities, all of which were current for MD1, were $ 469,066 as of September 30, 2023.

MD1’s total stockholders’ equity was $ 166,711 as of September 30, 2023.

Foreign Currency

The Company’s functional currency is the U.S.

The functional currency of our foreign operation is the respective local currency.

The functional currency of our foreign operation is the British pound.

Assets and liabilities of foreign operations denominated in local currencies are translated at the spot rate in effect at the applicable reporting date, except for equity accounts which are translated at historical rates.

The unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income are translated at the weighted average rate of exchange during the applicable period.

The resulting unrealized cumulative translation adjustment for the six months ended June 30, 2023 was $ 649,436 .

For the same period of 2022, it was not material to the financial statements.

The unaudited Condensed

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Operations and Comprehensive Income are translated at the weighted average rate of exchange during the applicable period.

The resulting unrealized cumulative translation adjustment for the three months ended September 30, 2023 and 2022 were $( 582,471 ) and $ 248,283 , respectively, and $ 66,965 and $ 252,854 for the nine months ended September 30, 2023 and 2022, respectively.

Use of Estimates

16 unchanged sentences

Major Customers

The Company had one customer that accounted for approximately 36 % of sales and 36 % of net accounts receivable for the three months ended June 30, 2023 and one customer that accounted for approximately 41 % of sales and 36 % of net accounts receivable for the six months ended June 30, 2023.

The Company had one customer that accounted for approximately 29 % of sales and 15 % of net accounts receivable and another customer that accounted for 14 % of sales and 12 % of net accounts receivables for the three months ended June 30, 2022.

The Company had one customer that accounted for 30 % of sales and 15 % of net accounts receivable, and another customer that accounted for 17 % of sales and 12 % of net accounts receivable for the six months ended June 30, 2022.

The Company had one customer that accounted for approximately 33 % of sales and 36 % of net accounts receivable and another customer that accounted for 32 % of sales and 28 % of net accounts receivable for the three months ended September 30, 2023.

One customer accounted for approximately 37 % of sales and 28 % of net accounts receivable and another customer accounted for approximately 17 % of sales and 36 % of net accounts receivable for the nine months ended September 30, 2023.

The Company had one customer that accounted for approximately 35 % of sales and 35 % of net accounts receivable for the three months ended September 30, 2022.

The Company had one customer that accounted for 33 % of sales and 35 % of net accounts receivable, and another customer that accounted for 11 % of sales and 0.1 % of net accounts receivable for the nine months ended September 30, 2022.

The Company had one vendor that accounted for approximately 20 % and 13 % of total cost for the three months ended September 30, 2023 and 2022, respectively.

The Company expects to maintain this relationship with the vendor and believes the services provided by this vendor are available from alternative sources.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company had one vendor that accounted for approximately 13 % and 16 % of total cost for the three months ended June 30, 2023 and 2022, respectively.

The Company expects to maintain this relationship with the vendor and believes the services provided from this vendor are available from alternative sources.

The Company had one vendor that accounted for approximately 11 % and 12 % of total cost for the six months ended June 30, 2023 and 2022, respectively.

The Company expects to maintain this relationship with the vendor and believes the services provided from this vendor are available from alternative sources.

The Company ha d one vendor that accounted for approximately 13 % and 11 % of total cost for the nine months ended September 30, 2023 and 2022, respectively.

The Company expects to maintain thi s relationship with the vendor and believes the services provided by this vendor are available from alternative sources.

Emerging Growth Company

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

The Company will remain an emerging growth company until the earliest of:

(i) the end of the fiscal year in which the Company has total annual gross revenue of $1.235 billion;

(ii) the last day of the Company’s fiscal year following the fifth anniversary of the Company’s initial offering, or December 31, 2025;

(iii) the date on which the Company issues more than $1.0 billion in non-convertible debt during the preceding three-year period;

or (iv) the end of the fiscal year in which the market value of the Common Stock held by non-affiliates exceeds $700 million as of the last business day of its most recently completed second fiscal quarter.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), are required to comply with the new or revised financial accounting standards.

The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non- emerging growth companies but any such an election to opt out is irrevocable.

The Company has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

The JOBS Act provides that an emerging growth company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies, but any such election to opt out is irrevocable.

The Company has elected not to opt out of the extended transition period, which means that when a financial accounting standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison of the Company’s financial statements with another public company, which is neither an emerging growth company nor an emerging growth company that has opted out of using the extended transition period, difficult or impossible because of the potential differences in accounting standards used.

Reclassifications

4 unchanged sentences

The Company maintains most of its cash and cash equivalents with financial institutions in the U.S.

The accounts at financial institutions in the U.S.

are insured by the Federal Deposit Insurance Corporation (“FDIC”) and are in excess of FDIC limits.

The Company had cash balances of approximately $ 5,336,308 and $ 8,125,966 with foreign financial institutions on June 30, 2023 and December 31, 2022, respectively.

The Company’s accounts at financial institutions in the U.S.

are insured by the FDIC and are in excess of FDIC insured limits.

The Company had cash balances of approximately $ 5,434,110 and $ 8,125,966 with foreign financial institutions on September 30, 2023 and December 31, 2022, respectively.

Restricted Cash and Insurance Reserves

1 unchanged sentence

Restricted cash is classified as either a current or non-current asset depending on the restriction period.

The Company is required to pledge or otherwise restrict a portion of cash and cash

The Company is required to pledge or otherwise restrict a portion of cash and cash equivalents as collateral for its line of credit, transportation equipment leases and a standby letter of credit as required by its insurance carrier (see Notes 9 and 14).

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

equivalents as collateral for its line of credit, transportation equipment leases and a standby letter of credit as required by its insurance carrier (see Notes 9 and 14).

The Company utilizes a combination of insurance and self-insurance programs, including a wholly owned captive insurance entity, to provide for the potential liabilities for certain risks, including workers’ compensation, automobile liability, general liability and professional liability.

1 unchanged sentence

The Company has commercial insurance in place for catastrophic claims above its deductible limits.

ARM Insurance, Inc.

a Vermont-based wholly-owned captive insurance subsidiary of the Company, charges the operating subsidiaries premiums to insure the retained workers’ compensation, automobile liability, general liability and professional liability exposures.

ARM Insurance, Inc., a Vermont-based wholly owned captive insurance subsidiary of the Company, charges the operating subsidiaries premiums to insure the retained workers’ compensation, automobile liability, general liability and professional liability exposures.

Pursuant to Vermont insurance regulations, ARM Insurance, Inc.

10 unchanged sentences

Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of June 30, 2023 and December 31, 2022.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of September 30, 2023 and December 31, 2022.

For certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, restricted cash, accounts payable and accrued expenses, and due to seller, the carrying amounts approximate their fair values as it is short term in nature.

1 unchanged sentence

Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value.

Future changes in fair value of the contingent financial milestone consideration, as a result of changes in significant inputs such as the discount rate and estimated probabilities of financial milestone achievements, could have a material effect on the unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income and Condensed Consolidated Balance Sheets in the period of the change.

During the year ended December 31, 2022, the Company recorded $ 4,000,000 in Contingent consideration in connection with the Ryan Brothers Atkinson, LLC business acquisition, to be paid based on the completion of certain performance obligations over a 24-month period.

In relation to the acquisition of Exceptional Medical Transportation, LLC (“Exceptional”), the Company also agreed to pay up to $ 2,000,000 upon meeting certain performance conditions within two years of the Closing Date.

The estimated Contingent consideration amount for Exceptional was $ 1,080,000 as of December 31, 2022.

Future changes in fair value of the contingent financial milestone consideration, as a result of changes in significant inputs such as the discount rate and estimated probabilities of financial milestone achievements, could have a material effect on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income and Condensed Consolidated Balance Sheets in the period of the change.

During the year ended December 31, 2022, the Company recorded $ 4,000,000 in contingent consideration in connection with the acquisition by Holdings of Ryan Bros.

Fort Atkinson, LLC (“Ryan Brothers”), to be paid based on the completion of certain performance obligations over a 24-month period.

The Company recorded a change in fair value of contingent consideration in the amount of $ 159,974 for the three and nine months ended September 30, 2023.

As of September 30, 2023, there was a remaining contingent liability balance of $ 3,840,026 (see Note 4).

In connection with the acquisition of Exceptional Medical Transportation, LLC (“Exceptional”), the Company also agreed to pay up to $ 2,000,000 in contingent consideration upon meeting certain performance conditions within two years of the closing date of such acquisition.

The estimated contingent consideration amount for Exceptional was $ 1,080,000 as of December 31, 2022 and September 30, 2023 (see Note 4).

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the year ended December 31, 2022, the Company also recorded $ 2,475,540 estimated Contingent consideration in relation to the Location Medical Services, LLC ("LMS") acquisition to be paid upon LMS meeting certain performance conditions in 2023.

The outstanding balance as of June 30, 2023 increased to $ 2,587,104 as a result of foreign exchange fluctuations.

For Government Medical Services, LLC ("GMS"), an amount of $ 3,000,000 was recorded in Contingent consideration to be paid upon GMS meeting certain performance conditions within a year of the Closing Date.

For Cardiac RMS, LLC ("CRMS"), an amount of 15,822,190 was recorded in Contingent consideration to be paid out over 36 months for the remaining 49 % equity of CRMS, based on CRMS' attainment of full-year EBITDA targets (see Note 4).

During the year ended December 31, 2022, the Company also recorded $ 2,475,540 estimated contingent consideration in connection with the acquisition by Holdings of Location Medical Services, LLC (“LMS”) to be paid upon LMS meeting certain performance conditions in 2023.

The outstanding balance as of September 30, 2023 increased to $ 2,496,270 as a result of foreign exchange fluctuations (see Note 4).

In connection with the acquisition by Holdings of Government Medical Services, LLC (“GMS”), the Company recorded an amount of $ 3,000,000 in contingent consideration to be paid upon GMS meeting certain performance conditions within a year of the closing date of such acquisition.

As of September 30, 2023, there was a remaining contingent liability balance of $ 3,000,000 (see Note 4).

In connection with the acquisition by Holdings of Cardiac RMS, LLC (“CRMS”), the Company recorded $ 15,822,190 in contingent consideration to be paid out over 36 months for the remaining 49 % equity of CRMS, based on CRMS’ attainment of full-year EBITDA targets.

As of September 30, 2023, there was a remaining contingent liability balance of $ 15,822,190 (see Note 4).

Accounts Receivable

9 unchanged sentences

Property and equipment are stated at cost, net of accumulated depreciation and amortization.

When an item is sold or retired, the costs and related accumulated depreciation or amortization are eliminated, and the resulting gain or loss, if any, is recorded in operating expenses in the unaudited Condensed Consolidated Statement of Operations and Comprehensive (Loss) Income.

The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the respective assets.

13 unchanged sentences

Capitalized software costs are amortized over its useful life.

Estimated useful life of software development activities are reviewed annually or whenever events or changes in circumstances indicate that intangible assets may be impaired and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades or enhancements to the existing functionality.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Business Combinations

16 unchanged sentences

Assets targeted for disposal are reported at the lower of the carrying amount or fair value less cost to sell.

In 2022, the Company reassigned all the assets at Ambulnz Health, LLC (“Health”) to Assets held for sale as a result of an assignment for the benefit of creditors (“ABC”) transaction.

In 2022, the Company reassigned all the assets at Ambulnz Health, LLC (“Health”) to Assets held for sale as a result of an assignment for the benefit of creditors (“ABC”).

The Company also recognized a non-cash charge of $ 2,921,958 for its Goodwill impairment for the year ended December 31, 2022 in the Consolidated Statements of Operations.

1 unchanged sentence

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.

Goodwill and indefinite-lived intangible assets are not amortized but are 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:

5 unchanged sentences

The costs associated with the Company’s line of credit are deferred and recognized over the term of the line of credit as interest expense.

Related Party Transactions

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

interest), management, and members of immediate families of principal owners or management, other parties with which the Company may deal with if one party controls or can significantly influence management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

Related party transactions are recorded within operating expenses in the Company’s unaudited Condensed Consolidated Statement of Operations and Comprehensive (Loss) Income.

For details regarding the related party transactions that occurred during the periods ended June 30, 2023 and 2022, refer to Note 16.

Related Party Transactions

The Company defines related parties as affiliates of the Company, entities for which investments are accounted for by the equity method, trusts for the benefit of employees, principal owners (beneficial owners of more than 10 % of the voting interest), management, members of immediate families of principal owners or management, and other parties with which the Company may deal with if one party controls or can significantly influence management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests.

Related party transactions are recorded within operating expenses in the Company’s unaudited Condensed Consolidated Statement of Operations and Comprehensive Income.

For details regarding the related party transactions that occurred during the three and nine months ended September 30, 2023 and 2022, see Note 16.

Revenue Recognition

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

On January 1, 2019, the Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”).

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:

5 unchanged sentences

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) ambulance and medical transportation services (“Transportation Services”) and (2) Mobile Health services.

The customer simultaneously receives and consumes the benefits provided by the Company as the performance obligations are fulfilled, therefore the Company satisfies performance obligations immediately.

The Company generates revenues from the provision of (1) Transportation Services and (2) Mobile Health Services.

Since the customer simultaneously receives and consumes the benefits provided by the Company as the performance obligations are fulfilled, the Company satisfies performance obligations immediately.

The Company has utilized the “right to invoice” expedient, which allows an entity to recognize revenue in the amount of consideration to which the entity has the right to invoice when the amount that the Company has the right to invoice corresponds directly to the value transferred to the customer.

9 unchanged sentences

Mobile Health Services :

These services include services performed at home and offices, COVID-19 testing and vaccinations, 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 other services, such as shelter.

These services include services performed at homes and offices, COVID-19 testing and vaccinations, and event services such as 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.

The Company concluded that Transportation Services and any related support activities are a single performance obligation under ASC 606.

The transaction price is determined by the fixed rate usage-based fees or fixed fees which are agreed upon in the Company’s executed contracts.

For Mobile Health, the performance of the services and any related support activities are a single performance obligation under ASC 606.

For Mobile Health Services, the performance of the services and any related support activities are a single performance obligation under ASC 606.

Mobile Health Services are typically billed based on a fixed rate (i.e., time and materials separately or combined) fee structure taking into consideration staff and materials utilized.

As the performance associated with such services is known and quantifiable at the end of a period in which the services occurred (i.e., monthly or quarterly), revenues are typically recognized in the respective period performed.

The typical billing cycle for Transportation Services and Mobile Health services is same day to 5 days with payments generally due within 30 days.

For large municipal customers in the Mobile Health segment, invoices are generally produced on a monthly basis, in arrears, and are generally due within 30-60 days of when they are submitted to the customer.

For Transportation Services, the Company estimates the amount unbilled at month end and recognizes such amounts as revenue, based on available data and customer history.

The Company’s Transportation Services and Mobile Health services each represent a

The typical billing cycle for Transportation Services and Mobile Health Services is same day to five days with payments generally due within 30 days.

For large municipal customers in the Mobile Health Services segment, invoices are generally produced on a monthly basis, in arrears, and are generally due within 30-60 days of when they are submitted to the customer.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

single performance obligation.

Transportation Services, the Company estimates the amount unbilled at month end and recognizes such amounts as revenue, based on available data and customer history.

The Company’s Transportation Services and Mobile Health Services each represent a single performance obligation.

Therefore, allocation is not necessary as the transaction price (fees) for the services provided is standard and explicitly stated in the contractual fee schedule and/or invoice.

The Company monitors and evaluates all contracts on a case-by-case basis to determine if multiple performance obligations are present in a contractual arrangement.

For Transportation 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 at the same time.

For Transportation Services, since the customer simultaneously receives and consumes the benefits provided by the Company as the performance obligations are fulfilled, the Company satisfies performance obligations at the same time.

For Transportation Services, where the customer pays fixed rate usage-based fees, the actual usage in the period represents the best measure of progress.

Generally, for 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 at the same time.

For certain Mobile Health services that have a fixed fee arrangement, and the services are provided over time, revenue is recognized over time as the services are provided to the customer.

For Mobile Health Services, the customer also generally simultaneously receives and consumes the benefits provided by the Company as the performance obligations are fulfilled.

Therefore, the Company satisfies performance obligations at the same time.

For certain Mobile Health Services that have a fixed fee arrangement and are provided over time, revenue is recognized over time as the services are provided to the customer.

In the following table, revenue is disaggregated as follows:

Revenue Breakdown Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

5 unchanged sentences

Transportation Services $ 47,212,443 $ 27,670,109 $ 132,690,538 $ 77,657,852

Mobile Health 80,064,609 87,344,071 153,011,367 177,423,113

Mobile Health Services 139,340,467 76,649,785 292,351,835 254,072,898

Total revenue $ 186,552,910 $ 104,319,894 $ 425,042,373 $ 331,730,750

Stock-Based Compensation

The Company accounts for stock-based compensation using the provisions of ASC 718, Stock-Based Compensation , which requires the recognition of the fair value of stock-based compensation.

The Company expenses stock-based compensation over the requisite service period based on the estimated grant-date fair value of the awards.

1 unchanged sentence

The Company accounts for forfeitures as they occur.

All stock-based compensation costs are recorded in operating expenses in the unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

All stock-based compensation costs are recorded in operating expenses in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.

Earnings per Share

Earnings per share represents the net income attributable to stockholders divided by the weighted-average number of shares outstanding during the period.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock of the Company during the reporting periods.

Potential dilutive common stock equivalents consist of the incremental common stock issuable upon exercise of warrants and the incremental shares issuable upon conversion of stock options.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock during the reporting periods.

Potential dilutive Common Stock equivalents consist of the incremental shares of Common Stock issuable upon exercise of warrants and the incremental shares issuable upon conversion of stock options.

In reporting periods in which the Company has a net loss, the effect is considered anti-dilutive and excluded from the diluted earnings per share calculation.

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

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

Net income attributable to stockholders of DocGo Inc.

and Subsidiaries:

9 unchanged sentences

Equity Method Investment

The Company uses the equity method to account for investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee but does not exercise control.

The Company’s judgment regarding its level of influence over an equity method investee includes considering key factors, such as ownership interest, representation on the board of directors, and participation in policy-making decisions.

Under the equity method, the Company’s investment is initially measured at cost and subsequently increased or decreased to recognize the Company’s share of income and losses of the investee, capital contributions and distributions and impairment losses.

The Company performs a qualitative assessment annually and recognizes an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value.

On October 26, 2021, the Company acquired a 50 % interest in RND Health Services Inc.

(“RND”) for $ 655,876 .

The Company’s carrying value in the equity method investee is reflected in the caption “Equity method investment” in the unaudited Condensed Consolidated Balance Sheets.

Changes in value of RND are recorded in “(Loss)/gain on initial equity method investments” on the unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

The Company’s judgment regarding its level of influence over the equity method investee includes considering key factors, such as ownership interest, representation on the board of directors, and participation in policy-making decisions.

During the three months ended September 30, 2023, the Company made an additional investment amounting to $ 150,509 .

The Company’s carrying value in RND, an equity method investee, is reflected in the caption “Equity method investments” in the unaudited Condensed Consolidated Balance Sheets.

Changes in value of RND are recorded in “(Loss) gain on equity method investments” on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.

On November 1, 2021, the Company acquired a 20 % interest in National Providers Association, LLC (“NPA”) for $ 30,000 .

The Company’s carrying value in the equity method investee is reflected in the caption “Equity method investment” in the unaudited Condensed Consolidated Balance Sheets.

Changes in value of NPA are recorded in “Gain (loss) on equity method investment” in the unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income.

Effective December 21, 2021, three members withdrew from NPA, resulting in the remaining two members obtaining the remaining ownership percentage.

As of December 31, 2022 and June 30, 2023, DocGo owned 50 % of NPA.

The Company performs a qualitative assessment annually and recognizes an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value.

The Company categorizes leases at its inception as either operating or finance leases based on the criteria in FASB ASC 842, Leases , (“ASC 842”).

The Company adopted ASC 842 on January 1, 2019, using the modified retrospective approach, and has established a Right-of-Use (“ROU”) Asset and a current and non-current lease liability for each lease arrangement identified.

The lease liability is recorded at the present value of future lease payments discounted using the discount rate that approximates the Company’s incremental borrowing rate for the lease established at the commencement date, and the ROU asset is measured as the lease liability plus any initial direct costs, less any lease incentives received before commencement.

As of December 31, 2022 and September 30, 2023, the Company owned 50 % of NPA.

The Company’s carrying value in NPA, an equity method investee, is reflected in the caption “Equity method investments” in the unaudited Condensed Consolidated Balance Sheets.

Changes in value of NPA are recorded in “(Loss) gain on equity method investments” in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income.

The Company categorizes leases at its inception as either operating or finance leases based on the criteria in ASC 842, Leases (“ASC 842”).

The Company adopted ASC 842 on January 1, 2019, using the modified retrospective approach, and has established a right-of-use asset and a current and non-current lease liability for each lease arrangement identified.

The lease liability is recorded at the present value of future lease payments discounted using the discount rate that approximates the Company’s incremental borrowing rate for the lease established at the commencement date, and the right-of-use asset is measured as the lease liability plus any initial direct costs, less any lease incentives received before commencement.

The Company recognizes a single lease cost, so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis.

2 unchanged sentences

The Company’s lease arrangements may contain both lease and non-lease components.

The Company has elected

The Company has elected to combine and account for lease and non-lease components as a single lease component.

The Company has incorporated

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

to combine and account for lease and non-lease components as a single lease component.

The Company has incorporated residual value obligations in leases for which there is such occurrences.

residual value obligations in leases for which there is such occurrences.

Regarding short-term leases, ASC 842-10-25-2 permits an entity to make a policy election not to apply the recognition requirements of ASC 842 to short-term leases.

8 unchanged sentences

The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

Recently Issued Accounting Standards Not Yet Adopted

In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) , that eliminates accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40 Receivables—Troubled Debt Restructurings by Creditors , while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

Recently Issued Accounting Standards Adopted

In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments – Credit Losses Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminates accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors , while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty.

ASU 2022-02 also requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost .

This ASU only affects entities that already adopted ASU 2016-13, which is effective for fiscal years beginning after December 15, 2022.

The Company expects that this ASU should not have a material impact on the Company’s unaudited Condensed Consolidated Financial Statements.

ASU 2022-02 only affects entities that have already adopted ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), which is effective for fiscal years beginning after December 15, 2022.

The Company adopted ASU 2022-02 on January 1, 2023, which did not have a material impact on the Company’s unaudited Condensed Consolidated Financial Statements.

Property and Equipment, Net

Property and equipment, net, as of June 30, 2023 and December 31, 2022 are as follows:

Property and equipment, net as of September 30, 2023 and December 31, 2022 are as follows:

September 30,

2023 December 31,

8 unchanged sentences

Property and equipment, net $ 21,852,663 $ 21,258,175

The Company recorded depreciation expense of $ 1,590,037 and $ 729,560 for the three months ended June 30, 2023 and 2022, respectively.

The Company recorded depreciation expense of $ 3,072,647 and $ 1,441,438 for six months ended June 30, 2023 and 2022, respectively.

During the nine months ended September 30, 2023, the Company disposed of assets with a cost of $ 591,184 and accumulated depreciation of $ 154,443 for proceeds of $ 274,210 .

The Company recorded a loss on disposal of assets of $ 163,452 .

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company recorded depreciation expense of $ 1,625,070 and $ 1,150,806 for the three months ended September 30, 2023 and 2022, respectively.

The Company recorded depreciation expense of $ 4,697,717 and $ 2,592,244 for the nine months ended September 30, 2023 and 2022, respectively.

Acquisition of Businesses

2 unchanged sentences

The aggregate purchase price consisted of $ 20,338,789 in cash consideration.

Holdings also agreed to pay GMS an additional $ 3,000,000 upon GMS meeting certain performance conditions within a year of the Closing Date.

Holdings also agreed to pay GMS an additional $ 3,000,000 upon GMS meeting certain performance conditions within a year of the closing date of the acquisition, or July 6, 2023.

Acquisition costs are included in general and administrative expenses and totaled $ 1,001,883 for the twelve months ended December 31, 2022.

As of September 30, 2023, there was a remaining contingent liability balance of $ 3,000,000 .

Exceptional Medical Transportation, LLC

On July 13, 2022, Holdings acquired 100 % of the outstanding shares of common stock of Exceptional in exchange for $ 13,708,333 consisting of $ 7,708,333 in cash at closing and $ 6,000,000 payable over a 24-month period.

Holdings also agreed to pay an estimated $ 1,080,000 Contingent consideration upon Exceptional meeting certain performance conditions in 2023.

Exceptional is in the business of providing medical transportation services.

On July 13, 2022, Holdings acquired 100 % of the outstanding shares of common stock of Exceptional, a provider of medical transportation services, in exchange for an aggregate purchase price of $ 13,708,333 , consisting of $ 7,708,333 in cash at closing and $ 6,000,000 payable over a 24-month period following the closing date of the acquisition.

The Company also agreed to pay up to $ 2,000,000 in contingent consideration upon meeting certain performance conditions within two years of the closing date of such acquisition.

The estimated contingent consideration amount payable for Exceptional was $ 1,080,000 as of December 31, 2022 and September 30, 2023.

Acquisition costs are included in general and administrative expenses and totaled $ 56,571 for the twelve months ended December 31, 2022.

Ryan Brothers Fort Atkinson, LLC

On August 9, 2022, Holdings acquired 100 % of the outstanding shares of common stock of Ryan Brothers Fort Atkinson, LLC (“RB”) in exchange for $ 11,422,252 consisting of $ 7,422,252 in cash at closing and $ 4,000,000 of estimated Contingent consideration to be paid out over 24 months based on performance of certain obligations.

RB is in the business of providing medical transportation services.

The Company paid $ 3,000,000 of the $ 6,000,000 remaining purchase price payable as of September 30, 2023.

Fort Atkinson, LLC

On August 9, 2022, Holdings acquired 100 % of the outstanding shares of common stock of Ryan Brothers, a provider of medical transportation services, in exchange for an aggregate purchase price of $ 11,422,252 , consisting of $ 7,422,252 in cash at closing and an estimated $ 4,000,000 in contingent consideration to be paid out over 24 months, commencing on August 1, 2022, based on performance of certain obligations.

Acquisition costs are included in general and administrative expenses and totaled $ 230,175 for the twelve months ended December 31, 2022.

The remaining contingent consideration amounted to $ 3,840,026 as of September 30, 2023.

Community Ambulance Services Ltd.

On October 12, 2022, Holdings, through its indirect wholly owned subsidiary Ambulnz U.K.

Ltd., acquired Community Ambulance Service Ltd (“CAS”), a company located in United Kingdom, in exchange for approximately $ 5,541,269 in cash.

The net assets acquired through the CAS acquisition was $ 7,134,881 mainly from the vehicles with high fair market value, which directly lead to a Gain on bargain purchase of $ 1,593,612 .

CAS is engaged in providing emergency and non-emergency transport services, including high dependency, urgent care, mental health and blue light transport services and diagnostics testing.

We expect this acquisition to help us to increase our presence in that market, while giving us improved access to municipal contracts.

Acquisition costs are included in general and administrative expenses totaling $ 171,779 for the twelve months ended December 31, 2022.

(“UK Ltd.”), acquired Community Ambulance Service Ltd (“CAS”), a provider of emergency and non-emergency transport services, including high dependency, urgent care, mental health and blue light transport services, and diagnostics testing in the U.K.

The aggregate purchase price consisted of approximately $ 5,541,269 in cash.

The net assets acquired through the CAS acquisition was $ 7,134,881 mainly from the vehicles with high fair market value, which directly lead to a gain on bargain purchase amounting to $ 1,593,612 .

The Company expects this acquisition to help increase the Company’s presence in the U.K.

market and help provide improved access to municipal contracts.

Acquisition costs are included in general and administrative expenses and amounted to $ 171,779 for the twelve months ended December 31, 2022.

Location Medical Services, LLC

On December 9, 2022, Holdings through its indirect wholly owned subsidiary, Ambulnz U.K.

Ltd., closed acquiring 100 % of the outstanding shares of common stock of LMS.

On December 9, 2022, Holdings, through UK Ltd., acquired 100 % of the outstanding shares of common stock of LMS.

The aggregate purchase price consisted of $ 302,450 in cash consideration.

The Company also agreed to pay LMS an additional $ 11,279,201 deferred consideration and an estimated $ 2,475,540 Contingent consideration upon LMS meeting certain performance conditions in 2023.

The Company paid $ 11,279,201 of deferred consideration to LMS during the six months ended June 30, 2023.

Holdings also agreed to pay LMS an additional $ 11,279,201 in deferred consideration and an estimated $ 2,475,540 in contingent consideration upon LMS meeting certain performance conditions in 2023.

The Company paid $ 11,279,201 of deferred consideration to LMS during the nine months ended September 30, 2023.

Acquisition costs are included in general and administrative expenses and totaled $ 4,200 for the twelve months ended December 31, 2022.

Cardiac RMS, LLC

On March 31, 2023, Holdings acquired 51 % of the outstanding shares of common stock of Cardiac RMS, LLC (“CRMS”) in exchange for $ 10,000,000 closing consideration, consisting of $ 9,000,000 in cash and $ 1,000,000 worth of shares of DocGo common stock issued in a private placement transaction.

A further probable consideration of $ 15,822,190 is to be paid out over 36 months for the remaining 49 % equity of CRMS, based on CRMS’ attainment of full-year EBITDA targets.

CRMS LLC provides cardiac implantable electronic device “CIED” remote monitoring and virtual care management services.

Acquisition costs included in general and administrative expenses totaled $ 229,937 for the six months ended June 30, 2023.

Ambulnz-FMC North America LLC

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

On April 1, 2023, the Company acquired the remaining outstanding shares of Ambulnz-FMC North America LLC common stock from its joint venture with Ambulnz Holdings, LLC, in exchange for $ 4,000,000 in cash and $ 3,000,000 in stock.

Ambulnz-FMC North America LLC is a prominent healthcare company that focuses on providing vital products and services for patients suffering from kidney diseases and renal failure.

Acquisition costs are included in general and administrative expenses totaling approximately $ 35,560 for the three and six months ended June 30, 2023, respectively.

Healthworx LLC

On May 10, 2023, the Company acquired the remaining outstanding shares of common stock from its joint venture with Rapid Reliable Testing, in exchange for $ 1,385,156 in cash.

The following table presents the preliminary allocation of the assets acquired and liabilities assumed:

On March 31, 2023, Holdings acquired 51 % of the outstanding shares of common stock of CRMS, a provider of cardiac implantable electronic device remote monitoring and virtual care management services.

The closing consideration of $ 10,000,000 consisted of $ 9,000,000 in cash and $ 1,000,000 worth of shares of Common Stock issued in a private placement transaction.

A further probable consideration of $ 15,822,190 is to be paid out over 36 months following the closing of the transaction for the remaining 49 % equity of CRMS, based on CRMS’ attainment of full-year EBITDA targets.

$ 5,000,000 of such further probable consideration is to be paid in cash and the remaining $ 10,822,190 is to be paid in shares of Common Stock.

Acquisition costs are included in general and administrative expenses and totaled $ 229,937 for the nine months ended September 30, 2023.

Ambulnz-FMC North America LLC

Cardiac RMS LLC Location Medical Services Community Ambulance Service Ryan Brothers Exceptional

Medical Transport Government Medical Services Total

On April 1, 2023, the Company acquired the remaining outstanding shares of common stock of Ambulnz-FMC North America LLC (“FMC NA”), a prominent healthcare company that focuses on providing vital products and services for patients suffering from kidney diseases and renal failure, from its joint venture with Holdings in exchange for $ 4,000,000 in cash and $ 3,000,000 in Common Stock.

Acquisition costs are included in general and administrative expenses totaling approximately $ 35,560 for the nine months ended September 30, 2023.

Healthworx LLC

On May 10, 2023, the Company acquired the remaining outstanding shares of common stock of Healthworx LLC (“Healthworx”), a provider of management, administration and support services to Service Providers focused on medical testing and diagnostic screening, from its joint venture with Rapid Reliable Testing, LLC (“RRT”) in exchange for $ 1,385,156 in cash.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the preliminary allocation of the assets acquired and liabilities assumed at each acquisition date:

CRMS LMS CAS Ryan Brothers Exceptional GMS Total

Consideration:

20 unchanged sentences

Total purchase price $ 7,000,000 $ 25,822,190 $ 14,057,191 $ 5,541,269 $ 11,422,252 $ 14,788,333 $ 23,338,789 $ 101,970,024

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

ABC Transaction and Held for Sale

During the fiscal year 2022, the Company started discussions regarding the potential liquidation process of Health through an assignment for the benefit of creditors (“ABC”), with a targeted timeline for the transaction to be fully closed in December 2022.

ABC and Held for Sale

During the fiscal year 2022, the Company started discussions regarding the potential liquidation process of Health through an ABC, with a targeted timeline for the transaction to be fully closed in December 2022.

The conversation involved operations, human resources, external legal counsel, and Amb, LLC, a California limited liability company (the “Assignee”).

Due to operational processes, the filing was extended and finalized on February 3, 2023.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

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 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 assets.

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.

In the ABC, all of Health’s assets were transferred to the Assignee, who acted as a fiduciary for creditors and in a capacity equivalent to that of a bankruptcy trustee.

The Assignee was responsible for liquidating the assets.

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

Creditors of Health received notice of the ABC and a proof of claim form and were required to submit a proof of claim in order to participate in distribution of net liquidation proceeds by the Assignee.

As of December 31, 2022, Health met the criteria to be classified as held for sale.

As the entity has met this criteria, the Company is required to record the respective assets and liabilities at the lower of carrying value or fair value less any costs to sell, and present the related assets and liabilities as separate line items in the Consolidated Balance Sheets.

The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in the Company’s Consolidated Balance Sheets as of December 31, 2022:

As such, the Company is required to record Health’s assets and liabilities at the lower of carrying value or fair value less any costs to sell and present the related assets and liabilities as separate line items in the Condensed Consolidated Balance Sheets.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Pre ABC Adjustment 2022 Adjustments December 31, 1Q23 Adjustments June 30,

Pre ABC Adjustment 2022 Adjustments December 31, YTD 2023 Adjustments September 30,

Current assets:

25 unchanged sentences

Total liabilities and stockholders’ equity $ 25,359,378 $ ( 2,921,958 ) $ 22,437,420 $ ( 22,437,420 ) $ —

The Intercompany receivables and Intercompany payables are eliminated in the Company’s Consolidated Balance Sheets.

In connection with the ABC transaction, the Company evaluated its Goodwill balances as of December 31, 2022 and determined that there was an impairment of Goodwill related to its Health reporting unit.

The intercompany receivables and intercompany payables are eliminated in the Company’s Consolidated Balance Sheet.

In connection with the ABC, the Company evaluated its goodwill balances as of December 31, 2022 and determined that there was an impairment of goodwill related to its Health reporting unit.

The impairment was primarily due to the ABC filing.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As a result of this impairment, the Company recognized a non-cash charge of $ 2,921,958 in the year ended December 31, 2022 in the Consolidated Statements of Operations.

The charge was recorded as part of other income in the Company’s Consolidated Statements of Operations and has no impact on its cash flow, liquidity, or compliance with debt covenants.

Additionally, the Company recorded Goodwill in connection with its acquisitions, the total Goodwill acquired in 2022 was $ 35,299,136 .

The Company also updated the carrying value of the Goodwill in its unaudited Condensed Consolidated Balance Sheets to reflect the additional Goodwill and the impairment charge.

The carrying value of Goodwill amounts $ 47,820,840 , the changes in the carrying value of Goodwill for the period ended June 30, 2023 are as noted in the tables below:

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Additionally, the Company recorded an aggregate of $ 35,299,136 in goodwill in connection with its acquisitions in the year ended December 31, 2022.

The Company also updated the carrying value of the goodwill in its unaudited Condensed Consolidated Balance Sheets to reflect the additional goodwill.

The carrying value of goodwill amounted to $ 47,594,304 as of September 30, 2023.

The changes in the carrying value of goodwill for the period ended September 30, 2023 are as noted in the table below:

Carrying Value

Balance at December 31, 2022 $ 38,900,413

Balance as of December 31, 2022 $ 38,900,413

Goodwill acquired during the period 8,642,190

Balance at June 30, 2023 $ 47,820,840

Intangible assets consist of the following as of June 30, 2023 and December 31, 2022:

June 30, 2023

Currency translation adjustment 51,701

Balance as of September 30, 2023 $ 47,594,304

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Intangible assets consisted of the following as of September 30, 2023 and December 31, 2022:

September 30, 2023

Estimated Useful

8 unchanged sentences

Material contracts Indefinite 62,550 — — 62,550

Customer Relationship 9 years

Customer relationships 9 years

12,397,954 15,847,527 ( 2,530,535 ) 25,714,946

1 unchanged sentence

326,646 2,735 ( 34,311 ) 295,070

Non-compete Agreement 5 years

Non-compete agreements 5 years

— 100,000 ( 10,000 ) 90,000

Trade credits 5 years — 1,500,000 — 1,500,000

$ 30,180,863 $ 19,908,808 $ ( 11,503,173 ) $ 38,586,498

10 unchanged sentences

Material contracts Indefinite — 62,550 — 62,550

Customer relationship 8 - 9 years

Customer relationships 8 - 9 years

— 12,397,954 ( 594,301 ) 11,803,653

2 unchanged sentences

$ 14,731,842 $ 15,449,021 $ ( 7,211,617 ) $ 22,969,246

The intangible assets include an immaterial foreign currency translation adjustment in the amount of $ 4,402 .

Intangible asset balances are translated into U.S.

dollars using exchange rates in effect at period end, and adjustments related to foreign currency translation are included in other comprehensive income.

The Company recorded amortization expense of $ 1,515,378 and $ 990,345 for the three months ended September 30, 2023 and 2022, respectively.

The Company recorded amortization expense of $ 4,295,958 and $ 2,269,423 for the nine months ended September 30, 2023 and 2022, respectively.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company recorded amortization expense of $ 1,414,944 and $ 645,715 for the three months ended June 30, 2023 and 2022, respectively.

The Company recorded amortization expense of $ 2,780,580 and $ 1,279,078 for the six months ended June 30, 2023 and 2022, respectively.

Future amortization expense at June 30, 2023 for the next five years and in the aggregate are as follows:

Future amortization expense at September 30, 2023 for the next five years and in the aggregate are as follows:

2023, remaining $ 986,093

5 unchanged sentences

Total $ 27,624,944

Trade Credit Agreement

During 2022, the Company provided mobile health services to one of its customers for an aggregate of $ 5,000,000 .

In June 2023, the Company entered into a Trade Credit Agreement with this customer whereby the customer was expected to provide the Company with $ 5,000,000 in trade credit on future vendor advertising expenditures.

In July 2023, the customer paid $ 3,500,000 in cash to partially settle the outstanding amount owed to the Company.

The fair value of the trade credits amounted to $ 1,500,000 , which was the remaining amount owed to the Company.

As of September 30, 2023, the trade credits have been reclassified from accounts receivable to intangible assets, net on the Condensed Consolidated Balance Sheets.

These trade credits are amortized to amortization expense under a usage-model as the credits are used to purchase advertising services.

The Company had a remaining balance of $ 1,500,000 in trade credits as of September 30, 2023.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Accrued Liabilities

Accrued liabilities consist of the following as of June 30, 2023 and December 31, 2022:

Accrued liabilities consisted of the following as of September 30, 2023 and December 31, 2022:

September 30,

2023 December 31,

Accrued subcontractors $ 24,121,473 $ 8,101,150

Accrued workers compensation and insurance liabilities 10,330,099 3,766,469

Accrued general expenses 13,595,062 11,436,462

Accrued workers' compensation and other insurance liabilities 10,786,533 3,766,469

Accrued payroll 5,707,651 4,245,838

Accrued bonus 1,893,172 1,500,717

Accrued legal fees 1,048,393 344,417

Accrued fuel and maintenance 902,789 253,243

Other current liabilities 798,826 706,528

Accrued legal fees 550,921 344,417

Accrued lab fees 463,008 584,203

Accrued fuel and maintenance 314,894 253,243

Credit card payable 34,941 78,838

2 unchanged sentences

Line of Credit

On November 1, 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.

On November 1, 2022, the Company entered into a credit agreement with two banks, with one bank in the capacity as a lender and the administrative agent (collectively with the other lender, the “Lenders”).

The Credit Agreement provides for a revolving credit facility in the initial aggregate principal amount of $ 90,000,000 (the “Revolving Facility”).

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) is obligated to increase its respective commitments.

Borrowings under the Revolving Facility bear interest at a per annum rate equal to:

(i) at the Company’s option, (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 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 the five-year anniversary of the closing date, 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

The Revolving Facility is subject to certain financial covenants such as a net leverage ratio and interest coverage ratio, as defined in the Credit Agreement.

As of September 30, 2023, the Company had not made any draws under the Revolving Facility, and there were no amounts outstanding.

On October 19, 2023, the Company drew down $ 25,000,000 under the Revolving Facility.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

coverage ratio, as defined in the agreement.

The Company has not made any draws under the facility and as of June 30, 2023, there is no amount outstanding.

Notes Payable

The Company has various loans with finance companies with monthly installments aggregating $ 83,823 , inclusive of interest ranging from 2.5 % through 11.3 %.

The notes mature at various times through 2028 and are secured by transportation equipment.

The loan notes mature at various times through 2028 and are secured by transportation equipment.

The following table summarizes the Company’s notes payable:

September 30,

2023 December 31,

Equipment and financing loans payable, between 2.5 % and 10.1 % interest and maturing between January 2023 and May 2028

Equipment and financing loans payable, between 2.5 % and 11.3 % interest and maturing between June 2023 and August 2028

$ 2,740,991 $ 1,901,514

3 unchanged sentences

Total non-current portion of notes payable $ 2,044,938 $ 1,236,601

Interest expense was $ 32,375 and $ 20,949 for the three months period ended June 30, 2023 and 2022, respectively.

Interest expense was $ 61,409 and $ 43,508 for the six months period ended June 30, 2023 and 2022, respectively.

Future minimum annual maturities of notes payable as of June 30, 2023 are as follows:

Interest expense was $ 48,794 and $ 26,296 for the three month periods ended September 30, 2023 and 2022, respectively.

Interest expense was $ 110,203 and $ 69,804 for the nine month periods ended September 30, 2023 and 2022, respectively.

Future minimum annual maturities of notes payable as of September 30, 2023 are as follows:

Notes Payable

5 unchanged sentences

Business Segment Information

The Company conducts business in three operating segments, Transportation Services, Mobile Health Services and Corporate.

The Company conducts business in three operating segments:

Transportation Services, Mobile Health Services and Corporate.

In accordance with ASC 280, Segment Reporting , operating segments are components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, the Company’s Chief Executive Officer, in deciding how to allocate resources and assessing performance.

Prior to 2023, the Company reported in two segments, because the Company’s entities have two main revenue streams.

Beginning with the first quarter of 2023, the Company is now 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.

Beginning with the first quarter of 2023, the Company began 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.

2 unchanged sentences

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.

The Company’s chief operating decision maker evaluates the Company’s financial information and resources and assesses the performance of these resources by revenue stream and by operating income or loss performance.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s Chief Executive Officer evaluates the Company’s financial information and resources and assesses the performance of these resources by revenue stream and by operating income or loss performance.

The accounting policies of the segments are the same as the accounting policies of the Company as a whole.

The Company evaluates the performance of its Transportation Services, Mobile Health Services and Corporate segments based primarily on results of operations.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Operating results for the business segments of the Company are as follows:

2 unchanged sentences

Services Corporate Total

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Revenues $ 47,212,443 $ 139,340,467 $ — $ 186,552,910

5 unchanged sentences

Capital expenditures 3,016,381 1,692,902 783,422 5,492,705

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Revenues $ 27,670,109 $ 76,649,785 $ — $ 104,319,894

10 unchanged sentences

Services Corporate Total

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Revenues $ 132,690,538 $ 292,351,835 $ — $ 425,042,373

5 unchanged sentences

Capital expenditures 16,460,730 28,109,057 3,159,172 47,728,959

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Revenues $ 77,657,852 $ 254,072,898 $ — $ 331,730,750

6 unchanged sentences

Long-lived assets include property and equipment, goodwill, intangible assets, operating lease right-of-use assets and finance lease right-of-use assets.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Geographic Information

The table below shows long-lived assets by geographic location.

2023 June 30,

September 30,

2023 September 30,

Primary Geographical Markets

3 unchanged sentences

Revenues by geographic location are included in Note 2.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Share Repurchase Program

On May 24, 2022, the Board of Directors authorized a share repurchase program to purchase up to $ 40 million of the Company’s common stock (the “Program”).

On May 24, 2022, the Company’s Board of Directors (the “Board of Directors”) authorized a share repurchase program to purchase up to $ 40,000,000 of Common Stock (the “Program”).

During the second and fourth quarter of 2022, the Company repurchased 536,839 shares of its Common Stock for $ 3,731,712 .

These shares were subsequently cancelled.

There were no shares repurchased during the three and six months ended June 30, 2023.

There were no shares repurchased during the nine months ended September 30, 2023.

The Program does not oblige the Company to acquire any specific number of shares and will expire on November 24, 2023.

Under the Program, shares may be repurchased using a variety of methods, including privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Exchange Act, as part of accelerated share repurchases, block trades and other methods.

Under the Program, shares may be repurchased using a variety of methods, including privately negotiated and/or open market transactions, under plans complying with Rule 10b5-1 under the Exchange Act, as part of accelerated share repurchases, block trades and other methods.

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.

4 unchanged sentences

Stock options granted have a maximum contractual term of 10 years.

On June 30, 2023, approximately 3.0 million employee stock options had vested.

As of September 30, 2023, approximately 2.9 million employee stock options had vested.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model.

Before the Company’s shares of stock were publicly traded, management took the average of several publicly traded companies that were representative of the Company’s size and industry in order to estimate its expected stock volatility.

The expected term of the options represented the period of time the instruments are expected to be outstanding.

Before the consummation of the Business Combination, management took the average of several publicly traded companies that were representative of the Company’s size and industry in order to estimate its expected stock volatility.

The expected term of the options represented the period of time the instruments were expected to be outstanding.

The Company based the risk-free interest rate on the rate payable on the U.S.

1 unchanged sentence

Expected dividend yield was zero based on the fact that the Company had not historically paid and does not intend to pay a dividend in the foreseeable future.

The following assumptions were used to compute the fair value of the stock option grants during the period ended June 30, 2023 and 2022:

Period Ended June 30,

The following assumptions were used to compute the fair value of the stock option grants during the nine months ended September 30, 2023 and 2022:

Nine Months Ended September 30,

Risk-free interest rate 4.10 - 4.87

4 unchanged sentences

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the Company’s stock option activity under the Plan for the period ended June 30, 2023:

The following table summarizes the Company’s stock option activity under the Company’s 2021 Stock Incentive Plan for the nine months ended September 30, 2023:

Shares Weighted

5 unchanged sentences

Cancelled during the year ( 551,665 ) 7.66 — —

Balance as of June 30, 2023 11,252,392 7.28 8.62 46,592,930

Options vested and exercisable at June 30, 2023 3,005,069 $ 6.36 7.89 9,093,754

The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Company’s common stock price and the exercise price of the stock options.

The weighted average grant date fair value per share for stock option grants during the periods ended June 30, 2023 and December 31, 2022 was $ 8.61 and $ 7.04 , respectively.

On June 30, 2023 and December 31, 2022, the total unrecognized compensation related to unvested stock option awards granted was $ 30,583,415 and $ 41,666,564 , respectively, which the Company expects to recognize over a weighted-average period of approximately 3.73 years.

Balance as of September 30, 2023 11,641,533 7.42 8.47 49,268,644

Options vested and exercisable as of September 30, 2023 2,937,143 $ 6.36 7.65 3,060,026

The aggregate intrinsic value in the above table is calculated as the difference between the fair value of the Common Stock price and the exercise price of the stock options.

The weighted average grant date fair value per share for stock option grants during the nine months ended September 30, 2023 and the year ended December 31, 2022 was $ 8.92 and $ 7.04 , respectively.

On September 30, 2023 and December 31, 2022, the total unrecognized compensation related to unvested stock option awards granted was $ 30,994,529 and $ 41,666,564 , respectively, which the Company expects to recognize over a weighted-average period of approximately 1.85 years.

Restricted Stock Units

The fair value of restricted stock units (“RSUs”) is determined on the date of grant.

The Company records compensation expense in the unaudited Condensed Consolidated Statement of Operations and Comprehensive (Loss) Income on a straight-line basis over the vesting period for RSUs.

The Company records compensation expense in the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income on a straight-line basis over the vesting period for RSUs.

The vesting period for employees and members of the Board of Directors ranges from one to four years .

Activity under RSUs was as follows:

Activity under RSUs during the nine months ended September 30, 2023 was as follows:

RSUs Weighted-

1 unchanged sentence

Granted 253,796 8.39

Vested during the year ( 136,258 ) 8.02

Vested ( 156,276 ) 8.90

Forfeited — —

Balance as of, June 30, 2023 270,687 8.25

Vested and unissued at June 30, 2023 192,500 8.25

Non-vested at June 30, 2023 270,687 8.25

The total grant-date fair value of RSUs granted during the period ended June 30, 2023 was $ 774,218 .

The Company recorded stock-based compensation expense related to RSUs of $ 663,748 and $ 1,093,423 for the three and six months ended June 30, 2023, respectively,

As of June 30, 2023, the Company had $ 2,232,968 in unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of approximately 0.8 years.

Balance as of September 30, 2023 403,107 8.16

Vested and unissued as of September 30, 2023 212,518 8.25

Non-vested as of September 30, 2023 403,107 8.16

The total grant-date fair value of RSUs granted during the nine months ended September 30, 2023 was $ 2,130,040 .

The Company recorded stock-based compensation expense related to RSUs of $ 25,000 and $ 1,416,338 for the three and nine months ended September 30, 2023, respectively,

As of September 30, 2023, the Company had $ 3,290,875 in unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of approximately 1.3 years.

and Subsidiaries

5 unchanged sentences

Certain leases for property and transportation equipment contain options to purchase, extend or terminate the lease.

Determining the lease term and amount of lease payments to include in the calculation of the right-of-use (ROU) asset and lease obligations for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain and whether the optional period and payments should be included in the calculation of the associated ROU asset and lease obligation.

Determining the lease term and amount of lease payments to include in the calculation of the right-of-use asset and lease obligations for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain and whether the optional period and payments should be included in the calculation of the associated right-of-use asset and lease obligation.

In making such judgment, the Company considers all relevant economic factors that would require whether to exercise or not exercise the option.

3 unchanged sentences

The Company used estimated borrowing rates of 6 % on January 1, 2019 for all leases that commenced prior to that date for office spaces and transportation equipment.

The table below comprise lease expenses for the periods ended June 30, 2023 and 2022:

The table below comprises operating lease expenses for the periods ended September 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

Components of total lease cost:

2 unchanged sentences

Short-term lease expense 452,538 334,619 1,156,886 863,316

Total lease cost $ 1,234,017 $ 702,329 $ 2,326,580 $ 1,420,050

Lease Position as of June 30, 2023

Right-of-use lease assets and lease liabilities for the Company’s operating leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows:

June 30, 2023 December 31, 2022

Total lease cost - operating leases $ 1,149,588 $ 960,807 $ 3,476,168 $ 2,380,857

Lease Position as of September 30, 2023

Right-of-use assets and lease liabilities for the Company’s operating leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows:

September 30, 2023 December 31, 2022

Lease right-of-use assets $ 9,420,525 $ 9,074,277

8 unchanged sentences

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s finance leases as of June 30, 2023:

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s finance leases as of September 30, 2023:

Weighted average remaining lease term (in years) - operating leases 4.36

1 unchanged sentence

Undiscounted Cash Flows

Future minimum lease payments under the operating leases at June 30, 2023 are as follows:

Future minimum lease payments under the operating leases as of September 30, 2023 are as follows:

2023, remaining $ 813,120

3 unchanged sentences

2027 1,090,802

Thereafter 862,023

Total future minimum lease payments 10,919,459

1 unchanged sentence

Present value of future minimum lease payments $ 9,757,761

Operating lease expense was approximately $ 865,987 and $ 428,728 for the three months ended June 30, 2023 and 2022, respectively.

Operating lease expense was approximately $ 1,622,232 and $ 891,353 for the six months ended June 30, 2023 and 2022, respectively.

For the three months ended June 30, 2023, the Company made $ 865,987 of fixed cash payments related to operating leases and $ 766,492 related to finance leases.

For the three months ended June 30, 2022, the Company made $ 428,728 of fixed cash payments related to operating leases and $ 851,307 related to finance leases.

For the six months ended June 30, 2023, the Company made $ 1,622,232 of fixed cash payments related to operating leases and $ 1,510,523 related to finance leases.

For the six months ended June 30, 2022, the Company made $ 891,353 of fixed cash payments related to operating leases and $ 1,473,882 related to finance leases.

Operating lease expense was approximately $ 697,050 and $ 960,807 for the three months ended September 30, 2023 and 2022, respectively.

Operating lease expense was approximately $ 2,319,282 and $ 2,380,857 for the nine months ended September 30, 2023 and 2022, respectively.

For the three months ended September 30, 2023, the Company made $ 697,050 of fixed cash payments related to operating leases and $ 782,808 related to finance leases.

For the three months ended September 30, 2022, the Company made $ 626,188 of fixed cash payments related to operating leases and $ 672,975 related to finance leases.

For the nine months ended September 30, 2023, the Company made $ 2,319,282 of fixed cash payments related to operating leases and $ 2,293,330 related to finance leases.

For the nine months ended September 30, 2022, the Company made $ 1,517,541 of fixed cash payments related to operating leases and $ 2,146,587 related to finance leases.

Finance Leases

The Company leases vehicles under a non-cancelable finance lease agreements with a liability of $ 8,643,832 and $ 8,646,803 as of June 30, 2023 and December 31, 2022, respectively.

This includes accumulated depreciation expense of $ 9,553,571 and $ 7,096,966 as of June 30, 2023 and December 31, 2022, respectively.

Depreciation expense for the vehicles under non-cancelable lease agreements amounted to $ 826,180 and $ 662,495 for the three months ended June 30, 2023 and 2022, respectively.

Depreciation expense for the vehicles under non-cancelable lease agreements amounted to $ 1,627,263 and $ 1,518,276 for the six months ended June 30, 2023 and 2022, respectively.

The Company leases vehicles under non-cancelable finance lease agreements with a liability of $ 8,664,108 and $ 8,646,803 as of September 30, 2023 and December 31, 2022, respectively.

This includes accumulated depreciation expense of $ 10,701,206 and $ 7,096,966 as of September 30, 2023 and December 31, 2022, respectively.

Depreciation expense for the vehicles under non-cancelable lease agreements amounted to $ 1,195,719 and $ 873,713 for the three months ended September 30, 2023 and 2022, respectively.

Depreciation expense for the vehicles under non-cancelable lease agreements amounted to $ 2,822,982 and $ 2,391,989 for the nine months ended September 30, 2023 and 2022, respectively.

and Subsidiaries

2 unchanged sentences

In June 2022, the Company reassessed its finance lease estimates relating to vehicle mileage and residual value.

As a result, the Company determined to purchase the vehicles at the end of the leases which resulted in a gain of $ 1.4 million recorded as gains from lease accounting on the unaudited Condensed Consolidated Statement of Operations and Comprehensive (Loss) Income.

Lease Payments

The table below presents lease payments for the periods ended June 30, 2023 and 2022:

As a result, the Company determined to purchase the vehicles at the end of the leases, which resulted in a gain of $ 1,400,000 recorded as gains from lease accounting on the unaudited Condensed Consolidated Statement of Operations and Comprehensive Income during the three months ended June 30, 2022.

The table below presents lease payments for the periods ended September 30, 2023 and 2022:

Three Months Ended

June 30, Six Months Ended

Components of total lease payment:

September 30, Nine Months Ended

September 30,

Components of total lease cost:

2023 2022 2023 2022

2 unchanged sentences

Total lease payments $ 782,808 $ 672,975 $ 2,293,330 $ 2,146,857

Lease Position as of June 30, 2023

Right-of-use lease assets and lease liabilities for the Company’s finance leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows:

Lease Position as of September 30, 2023

Right-of-use assets and lease liabilities for the Company’s finance leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows:

September 30,

2023 December 31,

7 unchanged sentences

Lease Terms and Discount Rate

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s finance leases as of June 30, 2023:

The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s finance leases as of September 30, 2023:

Weighted average remaining lease term (in years) - finance leases 3.58

3 unchanged sentences

Undiscounted Cash Flows

Future minimum lease payments under the finance leases at June 30, 2023 are as follows:

Future minimum lease payments under the finance leases as of September 30, 2023 are as follows:

Finance Leases

3 unchanged sentences

2026 1,969,492

Thereafter 114,107

Total future minimum lease payments 9,560,671

1 unchanged sentence

Present value of future minimum lease payments $ 8,664,108

Other (expense)/income

The Company recognized $( 587,389 ) and $ 4,619,765 of Other (expenses)/income for the three months ended June 30, 2023 and June 30, 2022, respectively.

The Company recognized $ 266,538 and $ 4,337,816 of Other income for the six months ended June 30, 2023 and June 30, 2022, respectively, as follows:

Three Months Ended Six Months Ended

June 30, June 30,

Other (expense) income:

2023 2022 2023 2022

Other Income (Expense)

The Company recognized $ 449,051 and $( 1,330,788 ) of other income (expense) for the three months ended September 30, 2023 and September 30, 2022, respectively, as set forth in the table below.

The Company recognized $ 715,589 and $ 3,007,029 of other income for the nine months ended September 30, 2023 and September 30, 2022, respectively, as follows:

Three Months Ended Nine Months Ended

September 30, September 30,

Other Income (Expense) 2023 2022 2023 2022

Interest income (expense), net $ 346,376 $ 334,221 $ 1,677,420 $ 296,891

Gain on remeasurement of warrant liabilities — 3,027,766 — 2,969,017

(Loss)/gain on initial equity method investments ( 90,573 ) 89,810 ( 205,859 ) 6,469

Loss on disposal of fixed assets ( 98,630 ) — ( 153,469 ) —

(Loss) gain on remeasurement of warrant liabilities — ( 1,831,947 ) — 1,137,070

Change in fair value of contingent liability 159,974 — 159,974 —

(Loss) gain on equity method investments ( 95,503 ) 93,371 ( 301,362 ) 99,840

Gain on remeasurement of finance leases 4,834 — 4,834 1,388,273

(Loss) gain on disposal of fixed assets ( 9,983 ) 42,667 ( 163,452 ) 42,667

ABC litigation — — ( 1,000,000 ) —

Other income 43,353 30,900 338,175 42,288

Total other (expense) income $ ( 587,389 ) $ 4,619,765 $ 266,538 $ 4,337,816

For the three months ended June 30, 2023, the Company recognized other income of $ 79,942 , net of $ 6,410 from realized foreign exchange gain offset by rental income of $ 0 .

For the three months ended June 30, 2022, the Company recognized other income of $ 15,640 , net of $ 1,145 from realized foreign exchange gain offset by rental income of $ 14,495 .

For the six months ended June 30, 2023, the Company recognized other income of $ 294,822 , net of $ 5,773 from realized foreign exchange gain offset by rental income of $ 8,496 .

For the six months ended June 30, 2022, the Company recognized other income of $ 11,387 , net of $ 19,660 from realized foreign exchange loss offset by rental income of $ 31,047 .

Total other income (expense) $ 449,051 $ ( 1,330,788 ) $ 715,589 $ 3,007,029

For the three months ended September 30, 2023, the Company recognized other income of $ 43,353 , inclusive of $ 924 from realized foreign exchange gain and rental income of $ 26 .

For the three months ended September 30, 2022, the Company recognized other income of $ 30,900 , inclusive of $ 777 from realized foreign exchange gain and rental income of $ 30,123 .

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the nine months ended September 30, 2023, the Company recognized other income of $ 338,175 , inclusive of $ 6,697 from realized foreign exchange gain and rental income of $ 8,522 .

For the nine months ended September 30, 2022, the Company recognized other income of $ 42,288 , net of $( 18,883 ) from realized foreign exchange loss offset by rental income of $ 61,171 .

Related Party Transactions

1 unchanged sentence

Tendler Strategic & Legal Services PLLC provides legal services for the Company.

Tendler Strategic & Legal Services PLLC is owned by the General Counsel and Director of the Company, and therefore is a related party.

Tendler Strategic & Legal Services PLLC is owned by Ely D.

Tendler, the General Counsel and Secretary and a Director of the Company, and therefore is a related party.

The Company made legal payments to Ely D.

Tendler Strategic & Legal Services PLLC totaling $ 126,600 and $ 234,255 for the three months ended June 30, 2023 and 2022, respectively, and $ 470,270 and $ 443,408 for the six months ended June 30, 2023 and 2022, respectively.

Included in accounts payable were $ 80,000 and $ 86,555 due to related parties as of June 30, 2023 and December 31, 2022, respectively.

As a result of the Company’s history of net operating losses (“NOL”), the Company had historically provided for a full valuation allowance against its deferred tax assets for assets that were not more-likely-than-not to be realized.

The Company’s income tax benefit (provision) for the three months ended June 30, 2023 and 2022 were $ 355,054 and $( 321,660 ), respectively, and $ 2,484,924 and $( 761,839 ) for the six months ended June 30, 2023 and 2022, respectively.

Tendler Strategic & Legal Services PLLC totaling $ 204,700 and $ 261,185 for the three months ended September 30, 2023 and 2022, respectively, and $ 674,970 and $ 704,593 for the nine months ended September 30, 2023 and 2022, respectively.

Included in accounts payable were $ 78,800 and $ 86,555 due to related parties as of September 30, 2023 and December 31, 2022, respectively.

As a result of the Company’s history of net operating losses, the Company had historically provided for a full valuation allowance against its deferred tax assets for assets that were not more-likely-than-not to be realized.

The Company’s income tax (provision) for the three months ended September 30, 2023 and 2022 were $( 4,526,767 ) and $( 401,916 ), respectively, and $( 2,041,843 ) and $( 1,163,755 ) for the nine months ended September 30, 2023 and 2022, respectively.

In determining the quarterly provision for income taxes, we use an estimated annual effective tax rate adjusted for discrete items.

This rate is based on our expected annual income, statutory tax rates, and best estimates of non-taxable and non-deductible income and expense items.

The Company has established a 401(k) plan in January 2022 that qualifies as a deferred compensation arrangement under Section 401 of the Internal Revenue Code.

The Company established a 401(k) plan in January 2022 that qualifies as a deferred compensation arrangement under Section 401 of the Internal Revenue Code.

employees that complete two months of service with the Company are eligible to participate in the plan.

The Company did not make any employer contributions to this plan as of June 30, 2023.

The Company did not make any employer contributions to this plan as of September 30, 2023.

Legal Proceedings

4 unchanged sentences

If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in the Consolidated Financial Statements.

As of June 30, 2023 and December 31, 2022, the Company recorded a liability of $ 1,000,000 , which represents an amount for an agreed settlement of various class-based claims, both actual and potential, under California state law, as described in detail below

As of December 31, 2022, the Company recorded a liability of $ 1,000,000 , which represents an amount for an agreed settlement of various class-based claims, both actual and potential, under California state law, as described below.

Stephanie Zamora, Jascha Dlugatch, et al.

4 unchanged sentences

On May 6, 2021, the parties attended mediation and settled the claims pled in the Consolidated Complaint on a class-wide and PAGA basis in exchange for a proposed $ 1,000,000 payment by the defendant parties, inclusive of administrative costs and fees.

On September 9, 2022, the Court preliminarily approved the proposed settlement , which was paid in July 2023.

On September 9, 2022, the Los Angeles Superior Court preliminarily approved the proposed settlement, which was paid in July 2023.

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Risk and Uncertainties

1 unchanged sentence

The spread of COVID-19 and the related shutdowns and restrictions had a mixed impact on the Company’s business.

In the ambulance transportation business, which predominantly comprises of non-emergency medical transportation, the Company initially saw a decline in volumes from historical and expected levels, as elective surgeries and other procedures were postponed.

In some of the Company’s larger markets, such as New York and California, there were declines in trip

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In addition, the Company experienced lost revenues associated with sporting, concerts and other events, as those events were cancelled or had a significantly restricted (or entirely eliminated) the number of permitted attendees.

In the ambulance transportation business, which predominantly comprises non-emergency medical transportation, the Company initially saw a decline in volumes from historical and expected levels, as elective surgeries and other procedures were postponed.

In some of the Company’s larger markets, such as New York and California, there were declines in the volume of transports completed by the Company (“trips”).

In addition, the Company experienced lost revenues associated with sporting, concerts and other events, as those events were cancelled or significantly restricted (or entirely eliminated) the number of permitted attendees.

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

2 unchanged sentences

This engagement resulted in incremental transportation revenue.

In addition, in response to the need for widespread COVID-19 testing, emergency medical technicians (“EMT”) and paramedics, the Company formed a new subsidiary, Rapid Reliable Testing, LLC (“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 segment.

In addition, in response to the need for widespread COVID-19 testing, emergency medical technicians (“EMTs”) and paramedics, the Company formed a new subsidiary, 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 Services segment.

As COVID-19 testing activity slowed to account for a minor portion of the Company’s revenues, RRT expanded its services beyond COVID-19 testing to a wide variety of tests, vaccinations and other procedures.

The Company’s current business plan assumes 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.

The Company’s current business plan assumes increased demand for Mobile Health Services.

Demand for such services was accelerated by the pandemic, but 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.

Subsequent Events

In July 2023, the Company paid the settlement for the Stephanie Zamora, Jascha Dlugatch, et al.

Ambulnz Health, LLC, et al .

case for the amount of $ 1,000,000 .

Transition Services Agreement

On October 11, 2023, the Company and Anthony Capone, who resigned as Chief Executive Officer of the Company on September 15, 2023, entered into a separation and transition services agreement (the “Transition Agreement”).

Pursuant to the Transition Agreement, Mr.

Capone will continue to serve as a consultant to the Company until March 15, 2024 (such period, the “Consulting Period”) to advise on matters relating to business continuity and processes and transition his institutional knowledge with respect to operational and other departmental functions.

As compensation for his services during the Consulting Period, and subject to his compliance with the Transition Agreement, including the execution and non-revocation of a general release of claims in favor of the Company, Mr.

Capone will receive a monthly consulting fee of $ 45,000 and subsidized premiums for continued group health plan coverage for the duration of the Consulting Period.

Capone will not receive new equity awards or incentive compensation under the Company’s equity incentive compensation program during the Consulting Period.

The Transition Agreement further acknowledges and affirms that Mr.

Capone will be bound by and comply with certain restrictive covenants.

Line of Credit

On October 19, 2023, the Company made a draw of $ 25,000,000 under its Revolving Facility.

Letter of Credit

On October 20, 2023, the Company obtained an unconditional and irrevocable letter of credit from a financial institution in the amount of $ 1,080,000 .

The letter of credit expires on the one-year anniversary of the closing date, or October 20, 2024, and is renewed automatically for successive one-year periods, unless earlier terminated by the institution.

Legal Proceedings

On October 27, 2023, Joe Naclerio, individually and purportedly on behalf of all others similarly situated, filed a putative class action complaint for violation of federal securities laws in the U.S.

District Court for the Southern District of New York against the Company, its Chairman, current and former Chief Executive Officers, and current and former Chief

and Subsidiaries

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Financial Officers.

The complaint alleges that the Company violated various securities laws, and seeks class certification, damages, interest, attorneys’ fees, and other relief.

Due to the early stage of this proceeding, the Company cannot reasonably estimate the potential range of loss, if any.

The Company disputes the allegations of wrongdoing and intends to defend itself vigorously in this matter.

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 1. Financial Statements