What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-06 compared with 2023-08-08 · 333 added, 294 removed, 211 unchanged (75% of the section changed)

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

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

Unless the context requires otherwise, references to “DocGo,” “we,” “us,” “our” and the “Company” refer to the business and operations of DocGo Inc.

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

Unless the context requires otherwise, references to the “Company,” “we,” “us,” and “our” refer to the business and operations of DocGo Inc.

and its consolidated subsidiaries.

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

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

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

For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in DocGo’s unaudited Condensed Consolidated Financial Statements or in the associated notes.

For this reason, percentage amounts in this section may vary slightly from those obtained by performing the same calculations using the figures in our unaudited Condensed Consolidated Financial Statements or in the accompanying notes.

Certain other amounts that appear in this section may similarly not sum due to rounding.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), regarding, among other things, the plans, strategies, outcomes, and prospects, both business and financial, of the Company.

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act regarding, among other things, the plans, strategies, outcomes, and prospects, both business and financial, of the Company.

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

Although the Company believes that its plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, the Company cannot assure you that it will achieve or realize these plans, intentions, outcomes or expectations.

Forward-looking statements are inherently subject to substantial risks, uncertainties and assumptions, many of which are beyond our control, and which may cause actual results to differ materially from those contained in our forward-looking statements.

Forward-looking statements are inherently subject to substantial risks, uncertainties and assumptions, many of which are beyond our control, and which may cause our actual results or outcomes, or the timing of our results or outcomes, to differ materially from those contained in our forward-looking statements.

Accordingly, you should not place undue reliance on such statements.

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

Forward-looking statements include, but are not limited to, statements concerning possible or assumed future actions, business strategies, plans, goals, future events, future revenues or performance, financing needs, business trends, results of operations, objectives and intentions with respect to future operations, services and products, including our transition to non-COVID related services, geographic expansion, our normalization initiative, new and existing contracts, M&A activity, workforce growth, leadership transition, cash position, share repurchase program, impacts of financial institution instability or the prospect of a shutdown of the U.S.

federal government, our competitive position and opportunities, including our ability to realize the benefits from our operating model, and others.

Forward-looking statements include, but are not limited to, statements concerning our possible or assumed future actions;

business strategies;

future events;

future revenues or performance;

financing needs;

business trends;

results of operations;

objectives and intentions with respect to future operations, services and products, including our transition to non-COVID related services;

geographic expansion;

our margin normalization initiative;

new and existing contracts and backlog;

M&A activity;

workforce growth;

leadership transitions;

cash position;

share repurchase program;

expected impacts of macroeconomic factors, including inflationary pressures, general economic slowdown or a recession, rising interest rates, foreign exchange rate volatility, changes in monetary pressure , financial institution instability or the prospect of a shutdown of the U.S.

federal government;

potential changes in federal, state or local government policies regarding immigration and asylum seekers;

expected impacts of geopolitical instability, including the conflict in Ukraine, conflict in Israel and surrounding areas and rising tensions between China mainland and Taiwan;

our competitive position and opportunities, including our ability to realize the benefits from our operating model;

our ability to improve gross margins;

cost-containment measures;

legislative and regulatory actions;

the impact of legal proceedings and compliance risk;

the impact on our business and reputation in the event of information technology system failures, network disruptions, cyber-attacks, or losses or unauthorized access to, or release of, confidential information;

the ability of the Company to comply with laws and regulations regarding data privacy and protection;

In some cases, these statements may be preceded by, followed by or include the words “believes,” “estimates,” “expects,” “projects,” “forecasts,” “may,” “might,” “will,” “should,” “could,” “can,” “would,” “design,” “potential,” “seeks,” “plans,” “scheduled,” “anticipates,” “intends” or the negative of these terms or similar expressions.

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

While DocGo believes that these forward-looking statements are reasonable, there can be no assurance that DocGo will achieve or realize these plans, intentions, outcomes or expectations.

We undertake no intent or obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

DocGo, which was originally formed in 2015, is a healthcare transportation and mobile services company that uses proprietary dispatch and communication technology to help provide quality healthcare transportation and mobile, in-person medical treatment directly to patients in the comfort of their homes, workplaces and other non-traditional locations, in major metropolitan cities in the United States and the United Kingdom.

Moreover, we operate in a very competitive and rapidly changing environment.

New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q.

The results, events, and circumstances reflected in the forward-looking statements may not be achieved or occur, and actual results or outcomes could differ materially from those described in the forward-looking statements.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject.

These statements are based on information available to us as of the date of this Quarterly Report on Form 10-Q, and, while we believe that information provides a reasonable basis for these statements, that information may be limited or incomplete.

Our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of,

all relevant information.

These statements are inherently uncertain, and investors are cautioned not to unduly rely on these statements.

The forward-looking statements made in this Quarterly Report on Form 10-Q are based on events or circumstances as of the date on which the statements are made.

We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as and to the extent required by law.

We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements.

Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments.

The Company is a healthcare transportation and mobile services company that uses proprietary dispatch and communication technology to help provide quality healthcare transportation and mobile, in-person medical treatment directly to patients in major metropolitan cities in the U.S.

The Company derives revenue primarily from two operating segments:

Mobile Health Services and Transportation Services.

• Mobile Health Services:

The services offered by this segment include services performed at home and offices, COVID-19 testing, and event services which include on-site healthcare support at sporting events and concerts.

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.

The services offered by this segment include services performed at homes and offices, 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.

• Transportation Services:

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The segment reporting for the prior-year period has been adjusted to conform to the new methodology, for the purposes of allowing for a clearer analysis of year-over-year performance.

See Note 11, “Business Segment Information” to the unaudited Condensed Consolidated Financial Statements for additional information regarding DocGo’s segments and “Operating Expenses” below.

For the three months ended June 30, 2023, the Company recorded net income of $1.3 million, compared to net income of $11.8 million in the three months ended June 30, 2022.

For the six months ended June 30, 2023, the Company recorded a net loss of $2.6 million, compared to net income of $21.1 million in the six months ended June 30, 2022.

See Note 11, “Business Segment Information” to the unaudited Condensed Consolidated Financial Statements for additional information regarding the Company’s segments and “Operating Expenses” below.

For the three months ended September 30, 2023, the Company recorded net income of $4.6 million, compared to net income of $2.5 million in the three months ended September 30, 2022.

For the nine months ended September 30, 2023, the Company recorded net income of $2.1 million, compared to net income of $23.6 million in the nine months ended September 30, 2022.

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 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 trip volume.

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 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.

There were two areas in which the Company initially experienced positive business impacts from COVID-19.

In April and May 2020, the Company participated in an emergency project with Federal Emergency Management Agency (“FEMA”) in the New York City area.

In April and May 2020, the Company participated in an emergency project with FEMA in the New York City area.

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, 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.

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our competitive environment;

overall macroeconomic and geopolitical conditions, including rising interest rates, the inflationary environment, the potential recessionary environment, regional conflict and tensions and financial institution instability and the prospect of a shutdown of the U.S.

overall macroeconomic and geopolitical conditions, including rising interest rates, the inflationary environment, the potential recessionary environment, regional conflict and tensions, financial institution instability and the prospect of a shutdown of the U.S.

federal government;

availability of healthcare professionals;

availability of healthcare professionals and other personnel;

changes in the cost of labor;

and production schedules of our suppliers.

Some of these important factors are briefly discussed below.

Future revenue growth and improvement in operating results will be largely contingent

on DocGo’s ability to penetrate new markets and further penetrate existing markets, which is subject to a number of uncertainties, many of which are beyond DocGo’s control.

Some of these key factors are briefly discussed below.

Future revenue growth and improvement in operating results will be largely contingent on our ability to penetrate new markets, to further penetrate existing markets and to successfully bid on contracts, which are subject to a number of uncertainties, many of which are beyond our control.

Operating Licenses

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

We have historically pursued a strategy of applying for ambulance operating licenses in the states, counties and cities we have identified for future new market entry.

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

DocGo aims to reduce this risk through its acquisition strategy by identifying businesses and/or underlying licenses in these new markets that may be for sale.

Historically, DocGo has pursued an acquisition strategy to obtain ambulance operating licenses from small operators or to obtain enhanced capabilities to offer Mobile Health services.

We aim to reduce this risk through our acquisition strategy, pursuant to which we identify businesses and/or underlying licenses in these new markets that may be for sale.

Historically, we have pursued an acquisition strategy to obtain ambulance operating licenses from small operators or to obtain enhanced capabilities to offer Mobile Health Services.

Future acquisitions may also include larger companies that may help drive revenue, profitability, cash flow and stockholder value.

During the six months ended June 30, 2023, the Company completed two acquisitions, for a purchase price of $32.8 million.

DocGo did not complete any acquisitions during the six months ended June 30, 2022.

During the nine months ended September 30, 2023, the Company completed two acquisitions for an aggregate purchase price of $32.8 million.

During the nine months ended September 30, 2022, the Company completed three acquisitions for an aggregate purchase price of $34.1 million, excluding $1.3 million held in escrow.

Healthcare Services Market

The Mobile Health Services market is dependent on several factors, including increased patient acceptance of services that are provided outside of traditional health care facilities, such as in homes, businesses or other designated locations;

healthcare coverage of the various Mobile Health Services;

and continued desire on the part of government and municipal entities to fund programs to assist currently underserved patient segments via “population health” programs.

These programs have increased in number, scale and scope since the beginning of the COVID-19 pandemic.

While COVID-19 testing and vaccination programs have been scaled back from their levels at the pandemic’s peak, there have been expansions of these population health programs into other areas, such as the provision of healthcare and related services to recent migrants and asylum seekers.

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

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

However, demand recovered in 2021, and since the first half of 2022, the Company has seen increased demand and trip volumes in nearly all of its Transportation services markets, as the Company expanded its customer base.

The Company primarily focuses on the non-emergency medical transport market, which includes services that are provided to patients who need assistance getting to and from medical appointments.

Key drivers of this market are the increase in chronic conditions and the number of elective surgeries as well as the ongoing aging of the population, as the older demographics tend to be much more frequent consumers of medical transportation services.

The market will also grow if hospitals and other healthcare facilities continue to outsource more of their transportation needs to independent providers, such as the Company.

Overall Economic Conditions in the Markets in Which We Operate

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

Unfavorable changes in demographics, health care coverage of transportation and mobile health services, interest rates, ambulance manufacturing, a weakening of the national economy or of any regional or local economy in which we operate and other factors beyond our control could adversely affect our business.

Unfavorable changes in demographics, health care coverage of Transportation Services and Mobile Health Services, interest rates, or ambulance manufacturing;

a weakening of the national economy or of any regional or local economy in which we operate;

and other factors beyond our control could adversely affect our business.

Trip Volumes and Average Trip Price

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As trip volume represents the most basic unit of transportation service provided by the Company, the Company believes it is a good measure of the level of demand for the Company’s Transportation Services and is used by management to monitor and manage the scale of the business.

The average trip price is calculated by dividing the aggregate revenue from completed transports (“trips”) by the total number of transports and is an important indicator of the effective rate at which the Company is being compensated for its provision of Transportation Services.

Revenues generated from programs under which DocGo is paid a fixed hourly or daily rate for the use of a fully staffed and equipped ambulance do not factor in the trip counts or average trip prices mentioned above.

We expect these fixed rate, “leased hour” programs to account for an increasing proportion of the Transportation segment’s revenues in the future.

The average trip price is calculated by dividing the aggregate revenue from the total number of trips by the total number of trips and is an important indicator of the effective rate at which the Company is being compensated for its provision of Transportation Services.

Revenues generated from programs under which the Company is paid a fixed hourly or daily rate for the use of a fully staffed and equipped ambulance do not factor in the trip counts or average trip prices mentioned above.

We expect these fixed rate, “leased hour” programs to account for an increasing proportion of the Transportation Services segment’s revenues in the future.

Our Ability to Control Expenses

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

We employ our proprietary technology to drive improvements in productivity per transport and per shift.

We regularly analyze our workforce productivity to achieve the optimum, cost-efficient labor mix for our locations.

We employ our proprietary technology to help drive improvements in productivity per transport and per shift.

We regularly analyze our workforce productivity to help achieve the optimum, cost-efficient labor mix for our locations.

This involves managing the mix of company-employed labor and subcontracted labor as well as full-time and part-time employees.

Since 2021, the inflation rate in the US, as measured by the Consumer Price Index (“CPI”), has generally trended higher.

Since 2021, the inflation rate in the U.S., as measured by the Consumer Price Index, has generally trended higher.

This data is reported monthly, showing year-over-year changes in prices across a basket of goods and services.

Though the inflation rate moderated in the first half of 2023, reaching an annualized level of 3.0% in June, it remains above historical averages.

Though the inflation rate moderated in the first nine months of 2023, reaching an annualized level of 3.7% in September, it remains above historical averages.

The increased inflation rate has had an impact on the Company’s expenses in several areas, including wages, fuel and medical and other supplies.

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In a continued attempt to dampen inflation, the U.S.

Federal Reserve implemented four interest rate hikes to date in 2023, raising its benchmark rate (the “federal funds rate”) to the current level of 5.25%-5.50% as of the date of the filing of this Quarterly Report on Form 10-Q.

Federal Reserve implemented four interest rate hikes to date in 2023, raising its benchmark rate to the current level of 5.25-5.50% as of the date of the filing of this Quarterly Report on Form 10-Q.

Looking to the remainder of 2023, we anticipate a continued moderation of the inflation rate when compared to the levels seen in 2022, as a result of these recent interest rate hikes and additional potential rate hikes, but expect inflation to remain above the levels seen in the previous 10 years.

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Investing in R&D and Enhancing Our Customer Experience

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

We intend to develop and introduce innovative new software services, integrate with third-party products and services, mobile applications and other new offerings.

If we fail to innovate and enhance our brand and our products, our market position and revenue will likely be adversely affected.

Our performance is dependent on the investments we make in research and development (“R&D”), including our ability to attract and retain highly skilled R&D personnel.

We intend to develop and introduce innovative new software services, integrations with third-party products and services, mobile applications and other new offerings.

If we fail to innovate and enhance our brand and our products, our market position and revenue may be adversely affected.

Regulatory Environment

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

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

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

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

All revenue and cost of goods sold are contained within the Mobile Health Services and Transportation Services.

Accordingly, revenues and cost of goods sold are discussed below on a consolidated level and are also broken down between Mobile Health Services and Transportation Services.

All revenue and cost of goods sold are contained within the Mobile Health Services and Transportation Services segments.

Accordingly, revenues and cost of goods sold are discussed below on a consolidated level and are also broken down

between Mobile Health Services and Transportation Services.

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

The Company evaluates the performance of each of its segments based primarily on results of its operations.

Accordingly, other income and expenses not included in results from operations are only included in the discussion of consolidated results of operations.

The Company evaluates the performance of each of its segments based primarily on its results of operations.

Accordingly, other income and expenses not included in results of operations are only included in the discussion of consolidated results of operations.

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

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Cost of revenues consists primarily of revenue generating wages paid to employees, vehicle insurance costs (including insurance premiums and costs incurred under the insurance deductibles), maintenance, fuel, laboratory fees, facility rent, medical supplies and subcontractors.

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

We expect cost of revenues to continue to rise along with the expected increase in revenue.

Operating Expenses

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General and administrative expense consists primarily of salaries, bad debt expense, insurance expense, consultant fees, and professional fees for accounting services.

We expect our general and administrative expense to increase as we scale up headcount with the growth of our business, and as a result of operating as a public company, including our compliance with SEC rules and regulations, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.

We expect our general and administrative expense to increase as we continue to scale our business and grow headcount and as a result of operating as a public company, including our compliance with SEC rules and regulations, audit activities, additional insurance expenses, investor relations activities, and other administrative and professional services.

Depreciation and Amortization

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

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

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

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Technology and Development Expenses

Technology and development expense, net of capitalization, consists primarily of cost incurred in the design and development of DocGo’s proprietary technology, third-party software and technologies.

Technology and development expense, net of capitalization consists primarily of costs incurred in the design and development of the Company’s proprietary technology, third-party software and technologies.

We expect technology and development expense to increase in future periods to support our growth, including our intent to continue investing in the optimization, accuracy and reliability of our platform and drive efficiency in our operations.

These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we may choose to make more significant investments, particularly when entering new business lines or customer sales channels.

These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, particularly when entering new business lines or customer sales channels.

Sales, Advertising and Marketing Expenses

Our sales and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include sales commissions, marketing programs, trade shows, and promotional materials.

Our sales, advertising and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include sales commissions, marketing programs, trade shows, and promotional materials.

We expect our sales and marketing expenses to continue to increase over time as we increase our marketing activities, grow our domestic and international operations, and continue to build brand awareness.

As the Company expands its sales efforts to include the direct-to-consumer channel, marketing expenses are likely to increase as a percentage of revenues, given the marketing-intensive nature of that sales channel.

Interest Expense

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Results of Operations

Comparison of the Three Months Ended June 30, 2023 and 2022

Three Months Ended June 30, Change

Comparison of the Three Months Ended September 30, 2023 and 2022

Three Months Ended September 30, Change

$ in Millions 2023 2022

Revenue, net $ 125.5 $ 109.5 $ 16.0 15 %

Actual Results % of Total Revenue Actual Results % of Total Revenue

Revenues, net $ 186.6 100.0 % $ 104.3 100.0 % $82.3 78.9 %

Cost of revenues 131.5 70.5 % 71.3 68.3 % 60.2 84.4 %

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Total expenses 177.8 95.3 % 100.1 96.0 % 77.7 77.6 %

Income (loss) from operations 1.6 7.5 (5.9)

Income from operations 8.8 4.7 % 4.2 4.0 % 4.6

Other income (expenses):

Interest income (expense), net 0.5 0.1 0.4 431 %

Gain on remeasurement of warrant liabilities — 3.0 (3.0)

(Loss) gain on initial equity method investments (0.1) 0.1 (0.2)

Interest income, net 0.3 0.2 % 0.3 0.3 % — — %

(Loss) on remeasurement of warrant liabilities — — % (1.8) (1.8) % 1.8

Change in fair value of contingent liability 0.2 0.1 % — — % 0.2

(Loss) gain on equity method investments (0.1) (0.1) % 0.1 0.1 % (0.2)

Gain on remeasurement of finance leases — — % — — % —

(Loss) gain on disposal of fixed assets — — % 0.1 0.1 % (0.1)

Other (expense) income (0.9) — (0.9)

Total other (expense) income (0.6) 4.6 (5.2)

Net income (loss) before income tax benefit (expense) 1.0 12.1 (11.1)

Income tax benefit (provision) 0.3 (0.3) 0.6

Net income (loss) 1.3 11.8 (10.4)

Net income (loss) attributable to noncontrolling interests 3.3 (1.0) 4.4 447 %

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

Other income (expense) — — % — — % —

Total other income (expense) 0.4 0.2 % (1.3) (1.3) % 1.7

Net income before income tax provision 9.2 4.9 % 2.9 2.7 % 6.3

Income tax (provision) (4.5) (2.4) % (0.4) (0.4) % -4.1

Net income 4.7 2.5 % 2.5 2.4 % 2.1

Net (loss) attributable to noncontrolling interests (0.1) (0.1) % (0.7) (0.7) % 0.6 (85.7) %

Net income attributable to stockholders of DocGo Inc.

and Subsidiaries $ 4.8 2.6 % $ 3.2 3.0 % 1.6

For the three months ended June 30, 2023, total revenues were $125.5 million, and increased by $16.0 million, or 15%, from the three months ended June 30, 2022.

Mobile Health

For the three months ended June 30, 2023, Mobile Health revenue totaled $80.1 million, and decreased by $7.3 million, or 8.2%, as compared with the three months ended June 30, 2022.

The decrease in revenues was due to a significant decline in COVID-19 related testing services and related revenues when compared to the prior year period.

The Company estimates that revenues from mass COVID-19 testing programs amounted to approximately $1.0 million in the second quarter of 2023, compared to approximately $28.0 million in second quarter of 2022.

The decline in COVID-19 testing revenue was

mostly offset by the expansion of the services offered by the Mobile Health segment.

This expansion has accelerated through 2022 and into the first half of 2023 as the Company increased its customer base and geographic reach, while extending several large customer contracts and introducing a broader range of services.

For the three months ended September 30, 2023, total revenue was $186.6 million, an increase of $82.3 million, or 78.9%, compared to the three months ended September 30, 2022.

Mobile Health Services

For the three months ended September 30, 2023, Mobile Health Services revenue totaled $139.3 million, an increase of $62.7 million, or 81.8%, compared to the three months ended September 30, 2022.

The increase in revenue was primarily due to an expansion in services offered by the Mobile Health Services segment, particularly in the government customer sector.

This expansion accelerated during the nine months ended September 30, 2023 as the Company increased its

customer base and geographic reach, while extending several large customer contracts and introducing a broader range of services.

Transportation Services

For the three months ended June 30, 2023, Transportation Services revenue totaled $45.4 million and increased by $23.2 million, or 104.5%, as compared with the three months ended June 30, 2022.

For the three months ended September 30, 2023, Transportation Services revenue totaled $47.2 million, an increase of $19.5 million, or 70.6%, compared to the three months ended September 30, 2022.

The increase in Transportation Services revenue reflected higher trip volumes and average trip prices.

Volumes increased by approximately 32%, from 47,673 trips for the three months ended June 30, 2022, to 62,907 trips for the three months ended June 30, 2023.

The increase in trip volumes was due to a combination of growth in the customer base in certain core markets, entry into new markets in 2022 and acquisitions made during the second half of 2022.

Our average trip price increased from $360 in the three months ended June 30, 2022, to $390 in the three months ended June 30, 2023.

The increase in the average trip price in 2023 reflected a shift in mix toward higher-priced transports with existing customers, as well as the acquisition of licenses to provide higher acuity transports resulting in higher prices per trip.

Volumes increased by approximately 9.4%, from 58,751 trips for the three months ended September 30, 2022, to 64,321 trips for the three months ended September 30, 2023.

The increase in trip volumes was due to a combination of growth in the Company's customer base in certain core markets and acquisitions made during the first nine months of 2022.

Our average trip price increased from $374 in the three months ended September 30, 2022 to $409 in the three months ended September 30, 2023.

The average trip price also benefited from an 8.7% increase in the average Medicare reimbursement rate for ambulance transports.

Cost of Revenue

For the three months ended June 30, 2023, total cost of revenue (exclusive of depreciation and amortization) increased by 19%, as compared to the three months ended June 30, 2022, while revenue increased by approximately 15%.

Cost of revenue as a percentage of revenue increased to 66.6% in the three months ended June 30, 2023 from 64.1% in the three months ended June 30, 2022.

In absolute dollar terms, total cost of revenue in the three months ended June 30, 2023 increased by $13.4 million, compared to the same period in 2022.

This was primarily attributable to a $10.5 million increase in total compensation, due to higher headcount for both the Transportation Services and Mobile Health segments and higher average hourly wages;

a $6.7 million increase in subcontracted labor costs, primarily driven by new projects in both segments which required more personnel than the Company was able to initially provide through its existing staff;

a $0.7 increase in medical and related supplies;

and a $1.1 million net increase in other cost of revenue categories.

These items were partially offset by a $3.4 million decrease in lab fees related to COVID-19 testing activity, reflecting significantly reduced testing activity than in the prior-year period;

a $1.9 million decline in travel costs, as there were fewer field personnel and other clinicians who traveled out of their home regions to provide Mobile Health services;

and a $0.3 decline in vehicle costs, as the Company exited certain rental agreements.

For the Mobile Health segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended June 30, 2023 amounted to $52.1 million, down slightly from $52.5 million in the three months ended June 30, 2022.

Cost of revenues as a percentage of revenues increased to 65.1% from 60.1% in the prior year period, due to the decrease in COVID-testing revenues and significantly higher compensation expenses, reflecting headcount growth;

and increased subcontracted labor costs, which outweighed the impact of reduced lab fees.

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the three months ended June 30, 2023 amounted to $31.5 million, up 78% from $17.7 million in the three months ended June 30, 2022.

Cost of revenues as a percentage of revenues decreased to 69.3% from 79.8% in the prior year quarter, reflecting the impact of higher per-trip prices, increased number of standby contracts (for which we are paid a daily or hourly rate) and the overall increase in revenue, as well as a decline in the average fuel price.

Cost of Revenues

For the three months ended September 30, 2023, total cost of revenue (exclusive of depreciation and amortization) increased by 84.4% compared to the three months ended September 30, 2022, while revenue increased by approximately 78.8%.

Cost of revenue as a percentage of revenue increased to 70.5% in the three months ended September 30, 2023 from 68.3% in the three months ended September 30, 2022.

In absolute dollar terms, total cost of revenue in the three months ended September 30, 2023 increased by $60.2 million compared to the same period in 2022.

This increase was primarily attributable to a $6.3 million increase in total compensation, due to higher headcount for both the Transportation Services and Mobile Health Services segments;

a $35.7 million increase in subcontracted labor costs, primarily driven by new projects in both segments that required more personnel than the Company was able to initially provide through its existing staff;

a $12.3 million increase in medical and related supplies;

a $2.3 million increase in travel costs for field personnel and other clinicians who traveled out of their home regions to provide Mobile Health Services;

and a $4.6 million net increase in other cost of revenues categories.

These items were partially offset by a $1.0 million decline in vehicle costs, as the Company exited certain rental agreements.

For the Mobile Health Services segment, cost of revenue (exclusive of depreciation and amortization) in the three months ended September 30, 2023 amounted to $99.3 million, up 98.6% from $50.0 million in the three months ended September 30, 2022.

Cost of revenue as a percentage of revenue increased to 71.2%% from 65.2% in the prior year period, despite a significant increase in revenue, reflecting higher compensation expenses as a result of headcount growth, significantly higher subcontracted labor costs and increased costs for medical supplies.

For the Transportation Services segment, cost of revenue (exclusive of depreciation and amortization) in the three months ended September 30, 2023 amounted to $32.2 million, up 51.2% from $21.3 million in the three months ended September 30, 2022.

Cost of revenue as a percentage of revenues decreased to 68.3% from 76.8% in the prior year quarter, reflecting the impact of higher per-trip prices, increased revenues from standby contracts (for which we are paid a daily or hourly rate) and the overall increase in revenue, as well as a decline in the average fuel price.

Operating Expenses

For the three months ended June 30, 2023, the Company recorded $40.3 million of operating expenses compared to $31.8 million for the three months ended June 30, 2022, an increase of 27%.

As a percentage of revenue, operating expenses increased from 29.0% in the second quarter of 2022 to 32.1% in the second quarter of 2023.

The increase of $8.4 million related primarily to a $5.6 million increase in total compensation due to investments in and expansion of corporate overhead to support revenue growth, partially driven by higher stock compensation expense;

a $1.8 million increase in depreciation and amortization due to an increase in assets to support revenue growth, capitalized software amortization and assets that were added as part of acquisitions that the Company completed in the second half of 2022 and the first quarter of 2023;

a $1.7 million increase in insurance costs, reflecting higher headcount and expanded operations;

For the three months ended September 30, 2023, the Company recorded $46.4 million of operating expenses compared to $28.9 million for the three months ended September 30, 2022, an increase of 60.7%.

As a percentage of revenue, operating expenses decreased from 27.7% in the third quarter of 2022 to 24.9% in the third quarter of 2023, reflecting the increase in revenues described above.

The increase of $17.5 million of operating expenses related primarily to an $8.3 million increase in total compensation due to investments in and expansion of corporate overhead to support revenue growth, partially driven by higher stock compensation expense;

a $1.5 million increase in depreciation and amortization due to an increase in assets to support revenue growth, capitalized software amortization and assets that were added as part of acquisitions that the Company completed in the second half of 2022 and the second quarter of 2023;

a $1.5 million increase in commissions related to both Mobile Health Services and Transportation Services projects;

a $0.8 million increase in IT infrastructure, driven by the Company’s business and headcount expansion and acquisitions;

and a $0.9 million increase in rent and utilities, relating to the Company’s ongoing geographic expansion.

These increased expenses were partially offset by a $2.4 million decline in professional fees;

a $0.4 million decline in subcontracted labor;

million in net declines spread across a variety of other operating expense categories.

The Company anticipates that operating expenses will decline as a percentage of revenue from the levels seen in the first two quarters of 2023.

For the Mobile Health segment, operating expenses in the three months ended June 30, 2023 were $9.9 million, up from $4.6 million in the three months ended June 30, 2022.

Operating expenses as a percentage of revenues increased to 12.3% in the second quarter of 2023, from 5.3% in the second quarter of 2022, reflecting significant expenditures that have been made in recent quarters in the expansion of services and geographic areas of operation, as well as the continued buildout of the Mobile Health management infrastructure and the costs of developing the Company’s “on-demand” direct-to-consumer offering.

For the Transportation Services segment, operating expenses in the three months ended June 30, 2023 were $14.6 million, compared to $9.9 million in the three months ended June 30, 2022.

Operating expenses as a percentage of revenues decreased to 32.1% for the three months ended June 30, 2023 from 44.5% in the three months ended June 30, 2022, reflecting the increased revenues in the current year period.

For the Corporate segment, which represents primarily shared services that are not contained within the entities which comprise either the Mobile Health Services or Transportation Services segments, operating expenses in the three months ended June 30, 2023 were $15.9 million, compared to $17.4 million in the three months ended June 30, 2022.

Corporate expenses amounted to approximately 12.6% of total consolidated revenues in the second quarter of 2023, compared to 15.9% in the second quarter of 2022.

Interest Income/(Expense), Net

For the three months ended June 30, 2023, the Company recorded $0.5 million of net interest income compared to $0.1 million of net interest income in the three months ended June 30, 2022.

This was due to a significantly higher amount of interest earned in the three months ended June 30, 2023, due to higher rates of interest earned on balances in the Company's interest-bearing accounts, which reflected significantly higher market interest rates.

Gain/(loss) on Remeasurement of Warrant Liabilities

During the three months ended June 30, 2023, there were no gains or losses recorded relating to remeasurement of warrant liabilities, as all warrants were redeemed during the third quarter of 2022.

During the three months ended June 30, 2022, the Company recorded a gain of approximately $3.0 million from the remeasurement of warrant liabilities.

The warrants were marked-to-market in each reporting period, and this gain reflected the decrease in DocGo’s stock price relative to the beginning of the first quarter of 2022.

Gain/(Loss) on Equity Method Investment

During the three months ended June 30, 2023, the Company recorded a loss on equity method investments of $90,573 representing its share of the losses incurred by an entity in which the Company has a minority interest.

During the three months ended June 30, 2022, the Company recorded a gain on equity method investments of $89,810.

a $0.4 million increase in bad debt expense, reflecting the growth of the business and related increase in accounts receivable;

and a net $4.9 million increase spread across a variety of other operating expense categories.

The Company anticipates that operating expenses will continue to decline as a percentage of revenue from the levels seen in the first three quarters of 2023.

For the Mobile Health Services segment, operating expenses in the three months ended September 30, 2023 were $19.0 million, up from $8.7 million in the three months ended September 30, 2022.

Operating expenses as a percentage of revenue increased to 13.4% in the third quarter of 2023, from 11.4% in the third quarter of 2022, reflecting significant expenditures that have been made in recent quarters in the expansion of services and geographic areas of operation, as well as the continued buildout of the Mobile Health Services management infrastructure.

For the Transportation Services segment, operating expenses in the three months ended September 30, 2023 were $14.5 million, compared to $10.3 million in the three months ended September 30, 2022.

Operating expenses as a percentage of revenue decreased to 30.6% for the three months ended September 30, 2023 from 37.2% in the three months ended September 30, 2022, reflecting the increased revenue in the current year period.

For the Corporate segment, which represents primarily shared services that are not contained within the entities included in either the Mobile Health Services or Transportation Services segments, operating expenses in the three months ended September 30, 2023 were $12.9 million, compared to $9.9 million in the three months ended September 30, 2022.

Corporate expenses amounted to approximately 6.9% of total consolidated revenues in the third quarter of 2023, compared to 9.5% in the third quarter of 2022, reflecting the significant increase in total consolidated revenues.

Interest Income, Net

For the three months ended September 30, 2023, the Company recorded $0.3 million of interest income, net compared to $0.3 million of interest income, net in the three months ended September 30, 2022.

Higher rates of interest were earned on balances in the Company’s interest-bearing accounts in the three months ended September 30, 2023, offsetting the impact of a decline in average cash balances when compared to the three months ended September 30, 2022.

(Loss) on Remeasurement of Warrant Liabilities

During the three months ended September 30, 2023, there were no gains or losses recorded relating to remeasurement of warrant liabilities, as all warrants were redeemed during the third quarter of 2022.

During the three months ended September 30, 2022, the Company recorded a loss of approximately $1.8 million from the remeasurement of warrant liabilities.

The warrants were marked-to-market in each reporting period, and this loss reflected the increase in the Company’s stock price relative to the beginning of the third quarter of 2022.

Change in Fair Value of Contingent Liability

During the three months ended September 30, 2023, the Company recorded a change in fair value of contingent consideration of $0.2 million.

There was no related change in fair value recorded in the three months ended September 30, 2022.

(Loss) Gain on Equity Method Investments

During the three months ended September 30, 2023, the Company recorded a loss on equity method investments of $0.1 million representing its share of the losses incurred by an entity in which the Company has a minority interest.

During the three months ended September 30, 2022, the Company recorded a gain on equity method investments of $0.1 million.

Gain on Remeasurement of Finance Leases

During the three months ended June 30, 2023, there were no gains or losses recorded relating to remeasurement of finance leases.

During the three months ended June 30, 2022, the Company recorded a gain of approximately $1.4 million, resulting from a change in estimated remaining liabilities under the terms of its leases.

Gain/(loss) on Disposal of Fixed Assets

During the three months ended June 30, 2023, the Company recorded a loss on the disposal of fixed assets of $98,630.

No such gain or loss was recorded during the three months ended June 30, 2022.

Income Tax (Expense)/Benefit

During the three months ended June 30, 2023, the Company recorded an income tax benefit of $0.4 million, compared to an income tax expense of $0.3 million in the three months ended June 30, 2022.

Net Loss Attributable to Noncontrolling Interest

For the three months ended June 30, 2023, the Company had net income attributable to noncontrolling interests of approximately $3.3 million, compared to a net loss attributable to noncontrolling interest of $1.0 million for the three

months ended June 30, 2022, which reflected improved performance in the Company’s joint venture markets in the three months ended June 30, 2023.

Comparison of the Six Months Ended June 30, 2023 and 2022

Six Months Ended

June 30, Change

During the three months ended September 30, 2023 and 2022, there were no gains or losses recorded relating to remeasurement of finance leases.

(Loss) Gain on Disposal of Fixed Assets

During the three months ended September 30, 2023, the Company recorded a loss on the disposal of fixed assets of $9,983, compared to a gain on the disposal of fixed assets of $42,667 during the three months ended September 30, 2022.

Income Tax (Provision)

During the three months ended September 30, 2023, the Company recorded an income tax provision of $4.5 million, compared to an income tax provision of $0.4 million in the three months ended September 30, 2022.

The increased tax expense was due to higher pretax income in the 2023 period.

Net (Loss) Income Attributable to Noncontrolling Interests

For the three months ended September 30, 2023, the Company had net loss attributable to noncontrolling interests of approximately $0.1 million, compared to a net loss attributable to noncontrolling interests of approximately $0.7 million for the three months ended September 30, 2022, which reflected improved performance in the Company’s joint venture markets in the three months ended September 30, 2023.

Comparison of the Nine Months Ended September 30, 2023 and 2022

Nine Months Ended

September 30, Change

$ in Millions 2023 2022

Revenue, net $ 238.5 $ 227.4 $ 11.1 4.9 %

Actual Results % of Total Revenue Actual Results % of Total Revenue

Revenues, net $ 425.0 100.0 % $ 331.7 100.0 % $ 93.3 28.1 %

Cost of revenues 296.3 69.7 % 219.4 66.1 % 76.9 35.1 %

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Total expenses $ 421.6 99.2 % 310.0 93.4 % 111.6 36.0 %

Income (loss) from operations (5.3) 17.5 (22.7)

Income from operations $ 3.4 0.8 % $ 21.8 6.6 % (18.4)

Other income (expenses):

Interest income (expense), net 1.3 — 1.3 100.0 %

Gain on remeasurement of warrant liabilities — 3.0 (3.0)

(Loss) gain on initial equity method investments (0.2) — (0.2)

Interest income, net 1.7 0.4 % 0.3 0.1 % 1.4 466.7 %

(Loss) gain on remeasurement of warrant liabilities — — % 1.1 0.3 % (1.1)

Change in fair value of contingent liability 0.2 — % — 0.3 % 0.2

(Loss) gain on equity method investments (0.3) (0.1) % 0.1 — % (0.4)

Gain on remeasurement of finance leases — — % 1.4 0.4 % (1.4)

(Loss) gain on disposal of fixed assets (0.2) — % 0.1 — % (0.3)

Other (expense) income (0.7) — (0.7)

Total other (expense) income 0.2 4.4 (4.2) (94.0 %)

Net income (loss) before income tax benefit (expense) (5.1) 21.9 (27.0)

Income tax benefit (provision) 2.5 (0.8) 3.3

Net income (loss) (2.6) 21.1 (23.7)

Other income (expense) (0.7) (0.2) % — — % (0.7)

Total other income (expense) 0.7 0.2 % 3.0 0.9 % (2.3) (76.7 %)

Net income before income tax provision 4.1 1.0 % 24.8 7.5 % (20.7)

Income tax (provision) (2.0) (0.5) % (1.2) — % (0.8)

Net income 2.1 0.5 % 23.6 7.1 % (21.5)

Net income (loss) attributable to noncontrolling interests 2.8 0.7 % (2.9) (0.9) % 5.7 196.6 %

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

Net income attributable to stockholders of DocGo Inc.

and Subsidiaries $ (0.7) (0.2) % $ 26.5 8.0 % $ (27.2)

For the six months ended June 30, 2023, total revenues were $238.5 million, an increase of $11.1 million, or 4.9%, from the total revenues recorded in the six months ended June 30, 2022.

Mobile Health

For the six months ended June 30, 2023, Mobile Health revenue totaled $153.0 million, a decrease of $24.4 million, or 14%, as compared with the six months ended June 30, 2022.

The decrease in revenues was due to a significant decline in COVID-19 related mass testing services and related revenues when compared to the prior year period.

The Company estimates that revenues from mass COVID-19 testing programs amounted to approximately $2.0 million in the first six months of 2023, compared to approximately $66.0 million in the first six months of 2022.

The decline in COVID-19 testing revenue was partially offset by the expansion of the services offered by the Mobile Health segment.

This expansion

accelerated through 2022 and into the first half of 2023 as the Company increased its customer base and geographic reach, while extending several large customer contracts and introducing a broader range of services.

For the nine months ended September 30, 2023, total revenue was $425.0 million, an increase of $93.3 million, or 28.1%, from the total revenue recorded in the nine months ended September 30, 2022.

Mobile Health Services

For the nine months ended September 30, 2023, Mobile Health Services revenue totaled $292.4 million, an increase of $38.3 million, or 15.1%, compared to the nine months ended September 30, 2022.

The increase in revenue was due to an expansion in services offered by the Mobile Health Services segment, particularly in the government customer sector.

This expansion has accelerated through the first nine months of 2023 as the Company increased its customer base and geographic reach, while extending several large customer contracts and introducing a broader range of services.

This outweighed a significant decline in COVID-19 related mass testing services and related revenue when compared to the prior year period.

The Company estimates that revenue from mass COVID-19 testing programs amounted to approximately $3.0 million in the first nine months of 2023, compared to approximately $74.0 million in the first nine months of 2022.

Transportation Services

For the six months ended June 30, 2023, Transportation Services revenue totaled $85.5 million, an increase of $35.5 million, or 71.0%, as compared with the six months ended June 30, 2022.

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

Volumes increased by approximately 26%, from 95,783 trips for the six months ended June 30, 2022, to 121,083 trips for the six months ended June 30, 2023.

The increase in trip volumes was due to a combination of growth in the customer base in certain core markets, entry into new markets in 2022 and acquisitions made during the second half of 2022.

Our average trip price increased from $356 in the six months ended June 30, 2022, to $402 in the six months ended June 30, 2023.

For the nine months ended September 30, 2023, Transportation Services revenue totaled $132.7 million, an increase of $55.0 million, or 70.9% compared to the nine months ended September 30, 2022.

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

Trip volumes increased by approximately 20%, from 154,534 trips for the nine months ended September 30, 2022 to 185,404 trips for the nine months ended September 30, 2023.

The increase in trip volumes was due to a combination of growth in the Company’s customer base in certain core markets and acquisitions made during the second half of 2022 and second quarter of 2023.

Our average trip price increased from $362 in the nine months ended September 30, 2022 to $405 in the nine months ended September 30, 2023.

The average trip price also benefited from an 8.7% increase in the average Medicare reimbursement rate for ambulance transports.

Cost of Revenue

For the six months ended June 30, 2023, total cost of revenue (exclusive of depreciation and amortization) increased by 11.2% as compared to the six months ended June 30, 2022, while revenue increased by approximately 4.9%.

Cost of revenue as a percentage of revenue increased to 69.1% in the first six months of 2023 from 65.2% in the first six months of 2022.

In absolute dollar terms, total cost of revenue in the six months ended June 30, 2023 increased by $16.6 million from the prior year period.

This was primarily attributable to a $26.1 million increase in total compensation, reflecting higher headcount for both the Transportation Services and Mobile Health segments;

a $4.5 million increase in subcontracted labor, driven mostly by the Mobile Health segment, where revenue increases outpaced the Company’s ability to service such revenue solely with internal resources;

and a $1.0 million increase in vehicle costs, driven by a continued increase in the Company’s vehicle fleet.

These items were partially offset by an $6.8 million decrease in lab fees related to COVID-19 testing activity and a $7.5 million decline in supplies, both reflecting the significant decline in COVID-19 testing activity in the first half of 2023 compared to the first half of 2022;

and a $0.7 million net decline in expenses across a variety of other cost of revenue categories.

For the Mobile Health segment, cost of revenues (exclusive of depreciation and amortization) in the six months ended June 30, 2023 amounted to $104.9 million, down $4.1 million, or 3.8% from the six months ended June 30, 2022.

Cost of revenues as a percentage of revenues increased to 68.5%, from 61.4% in the six months ended June 30, 2023, due to the decline in COVID-testing revenues and significantly higher compensation expenses, reflecting headcount growth, and subcontracted labor costs, which outweighed the impact of reduced lab fees and supplies costs.

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the six months ended June 30, 2023 amounted to $59.9 million, up 53% from $39.2 million in the six months ended June 30, 2022.

Cost of revenues as a percentage of revenues decreased to 70.2% in the first six months of 2023 from 78.4% in the prior year period, reflecting the impact of higher per-trip prices, increased number of standby contracts (for which we are paid a daily or hourly rate) and the overall increase in revenue, as well as a decline in the average fuel price.

Cost of Revenues

For the nine months ended September 30, 2023, total cost of revenue (exclusive of depreciation and amortization) increased by 35.1% compared to the nine months ended September 30, 2022, while revenue increased by approximately 28.1%.

Cost of revenue as a percentage of revenue increased to 69.7% in the nine months ended September 30, 2023 from 66.1% in the nine months ended September 30, 2022.

In absolute dollar terms, total cost of revenue in the nine months ended September 30, 2023 increased by $76.9 million from the prior year period.

This was primarily attributable to a $32.3 million increase in total compensation, reflecting higher headcount for both the Transportation Services and Mobile Health Services segments;

a $40.2 million increase in subcontracted labor, driven primarily by the Mobile Health Services segment, where revenue increases outpaced the Company’s ability to service such revenue solely with internal resources, as well as certain projects which required more specialized personnel;

and a $4.8 million increase in medical and related supplies.

These increases were slightly offset by a net decrease of $0.5 million in expenses across a variety of other cost of revenues categories.

For the Mobile Health Services segment, cost of revenue (exclusive of depreciation and amortization) in the nine months ended September 30, 2023 amounted to $204.1 million, up $45.2 million, or 29%, from the nine months ended September 30, 2022.

Cost of revenue as a percentage of revenue increased to 69.8% in the nine months ended September 30, 2023 from 62.6% in the nine months ended September 30, 2022, despite a significant increase in revenues, reflecting higher compensation expenses as a result of headcount growth, significantly higher subcontracted labor costs and increased costs for medical supplies, which outweighed the impact of reduced lab fees and supplies costs due to the significant decline in COVID testing.

For the Transportation Services segment, cost of revenue (exclusive of depreciation and amortization) in the nine months ended September 30, 2023 amounted to $92.2 million, up $31.8 million, or 53%, from the nine months ended September 30, 2022.

Cost of revenue as a percentage of revenues decreased to 69.5% in the nine months ended September 30, 2023 from 77.8% in the prior year period, reflecting the impact of higher per-trip prices, increased number of standby contracts (for which we are paid a daily or hourly rate) and the overall increase in revenue, as well as a decline in the average fuel price.

Operating Expenses

For the six months ended June 30, 2023, the Company recorded $78.9 million of operating expenses compared to $61.7 million for the six months ended June 30, 2022, an increase of 28%.

As a percentage of revenue, operating expenses increased from 27.1% in the first six months of 2022 to 33.1% in the first six months 2023.

The increase of $17.2 million related primarily to a $13.0 million increase in total compensation, which includes costs for both direct and subcontracted staff, due to investments in and expansion of corporate infrastructure to support the revenue growth, as well as stock-based compensation expense;

For the nine months ended September 30, 2023, the Company recorded $125.3 million of operating expenses compared to $90.6 million for the nine months ended September 30, 2022, an increase of 38.4%.

As a percentage of revenue, operating expenses increased from 27.3% in the nine months ended September 30, 2022 to 29.5% in the nine months ended September 30, 2023.

The increase of $34.4 million related primarily to a $21.3 million increase in total compensation,

which included costs for both directly employed and subcontracted staff due to investments in and expansion of corporate infrastructure to support the revenue growth, as well as an increase in stock-based compensation expense;

a $4.7 million increase in depreciation and amortization due to an increase in assets to support revenue growth and capitalized software amortization, as well as recently acquired companies;

1 unchanged sentence

a $2.2 million increase in insurance costs, reflecting higher headcount and expanded operations;

and a $1.7 million increase in rent and utilities, relating to the Company’s ongoing geographic expansion.

These increased expenses were partially offset by a $2.8 million decline in bad debt expense, as allowances for doubtful accounts were adjusted to better reflect the aging and collection history of the Company’s accounts receivable;

a $0.8 million decline in commissions, in the absence of certain per-test and per-vaccination commissions that were paid in relation to certain mass COVID-19 testing and vaccination projects in the first

half of 2022;

and a $2.0 million decline across various operating expense categories, including professional fees and travel and entertainment.

We anticipate that operating costs over the remainder of 2023, as a percentage of total revenue, will decline from the levels seen in the first half of 2023.

For the Mobile Health segment, operating expenses in the six months ended June 30, 2023 were $17.2 million, up 16% from $14.8 million in the six months ended June 30, 2022.

Operating expenses as a percentage of revenues increased to 11.2% from 8.4% in the first six months of 2022, reflecting significant expenditures that have been made in recent quarters in the expansion of services and geographic areas of operation, as well as the continued buildout of the Mobile Health management infrastructure and the costs of developing the Company’s “on-demand” direct-to-consumer offering, as described above.

For the Transportation Services segment, operating expenses in the six months ended June 30, 2023 were $25.2 million, up 35% from $18.7 million in the six months ended June 30, 2022.

Operating expenses as a percentage of revenues decreased to 29.4% for the six months ended June 30, 2023, from 37.3% for the six months ended June 30, 2022, reflecting the increased revenues in the current year period.

For the Corporate segment, which represents primarily shared services that are not contained within the entities which comprise either the Mobile Health Services or Transportation Services segments, operating expenses in the six months ended June 30, 2023 were $36.6 million, compared to $28.1 million in the six months ended June 30, 2022.

a $2.0 million increase in rent and utilities relating to the Company’s ongoing geographic expansion;

and a $3.1 million net increase across a variety of expense categories.

These increased expenses were partially offset by a $2.4 million decrease in bad debt expense, as allowances for doubtful accounts were adjusted to better reflect the aging and collection history of the Company’s accounts receivable.

We anticipate that operating costs over the remainder of 2023, as a percentage of total revenue, will decline from the levels seen in the nine months ended September 30, 2023.

For the Mobile Health Services segment, operating expenses in the nine months ended September 30, 2023 were $35.8 million, up 52% from $23.5 million in the nine months ended September 30, 2022.

Operating expenses as a percentage of revenues increased to 12.3% in the nine months ended September 30, 2023 from 9.3% in the nine months ended September 30, 2022, reflecting significant expenditures that were made in the nine months ended September 30, 2023 related to the expansion of services and geographic areas of operation, as well as the continued buildout of the Mobile Health Services management infrastructure and the costs of developing the Company’s “on-demand” direct-to-consumer offering.

For the Transportation Services segment, operating expenses in the nine months ended September 30, 2023 were $39.6 million, up 37% from $28.9 million in the nine months ended September 30, 2022.

Operating expenses as a percentage of revenues decreased to 29.9% for the nine months ended September 30, 2023 from 37.3% for the nine months ended September 30, 2022, reflecting the increased revenues in the current year period.

For the Corporate segment, which represents primarily shared services that are not contained within the entities included in either the Mobile Health Services or Transportation Services segments, operating expenses in the nine months ended September 30, 2023 were $49.6 million, compared to $38.1 million in the nine months ended September 30, 2022.

The increase was driven by higher headcount as the Company built out its corporate infrastructure, as well as significantly higher stock compensation expenses.

As a percentage of total consolidated revenues, Corporate expenses amounted to approximately 15.4% of revenues in the first half of 2023, compared to 12.4% in the first half of 2022.

Interest Income/(Expense), Net

For the six months ended June 30, 2023, the Company recorded $1.3 million of net interest income compared to $37,330 million of net interest expense in the six months ended June 30, 2022.

This was due to a significantly higher amount of interest earned in the six months ended June 30, 2023, due to higher rates of interest earned on balances in the Company's interest-bearing accounts, which reflected significantly higher market interest rates.

Gain/(loss) on Remeasurement of Warrant Liabilities

During the six months ended June 30, 2023, there were no gains or losses recorded relating to remeasurement of warrant liabilities, as all warrants were redeemed during the third quarter of 2022.

During the six months ended June 30, 2022, the Company recorded a gain of approximately $3.0 million from the remeasurement of warrant liabilities.

The warrants were marked-to-market in each reporting period, and this gain reflected the decrease in DocGo’s stock price relative to the beginning of 2022.

Gain/(Loss) on Equity Method Investment

During the six months ended June 30, 2023, the Company recorded a loss of $205,859 on equity method investments, representing its share of the losses incurred by an entity in which the Company has a minority interest.

During the six months ended June 30, 2022, the Company recorded a gain of $6,469 on equity method investments, representing its share of the losses incurred by an entity in which the Company has a minority interest.

Gain/(loss) from Remeasurement of Finance Leases

During the six months ended June 30, 2023, the Company did not record a gain or loss relating to a change in estimated remaining liabilities under the terms of its leases.

During the six months ended June 30, 2022, the Company recorded a gain of approximately $1.4 million, resulting from a change in estimated remaining liabilities under the terms of its leases.

Gain/(loss) on Disposal of Fixed Assets

During the six months ended June 30, 2023, the Company recorded a loss of $153,469 on the disposal of fixed assets.

During the six months ended June 30, 2022, no gain or loss was recorded on the disposal of fixed assets.

Income Tax (Expense)/Benefit

During the six months ended June 30, 2023, the Company recorded an income tax benefit of $2.5 million, compared to an income tax expense of $0.8 million in the six months ended June 30, 2022.

The income tax benefit reflects a pretax loss recorded during the six months ended June 30, 2023, compared to pretax income in the prior year period.

The income tax

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

Net Loss Attributable to Noncontrolling Interest

For the six months ended June 30, 2023, the Company had net income attributable to noncontrolling interest of approximately $2.9 million, compared to a net loss attributable to noncontrolling interest of $2.2 million for the six months ended June 30, 2022.

The income compared to the prior year period loss reflected improved performance in the Company’s joint venture markets in the three months ended June 30, 2023.

As a percentage of total consolidated revenues, Corporate expenses amounted to approximately 11.7% of revenues in the nine months ended September 30, 2023, compared to 11.5% in the nine months ended September 30, 2022.

Interest Income, Net

For the nine months ended September 30, 2023, the Company recorded $1.7 million of interest income, net compared to $0.3 million of interest income, net in the nine months ended September 30, 2022.

This increase was primarily due to higher rates of interest earned on balances in the Company's interest-bearing accounts in the nine months ended September 30, 2023, which reflected significantly higher market interest rates.

(Loss) Gain on Remeasurement of Warrant Liabilities

During the nine months ended September 30, 2023, there were no gains or losses recorded relating to remeasurement of warrant liabilities, as all warrants were redeemed during the third quarter of 2022.

During the nine months ended September 30, 2022, the Company recorded a gain of approximately $1.1 million from the remeasurement of warrant liabilities.

The warrants are marked-to-market in each reporting period, and this gain was due to the decline in the Company’s stock price relative to the beginning of the period.

Change in Fair Value of Contingent Liability

During the nine months ended September 30, 2023, the Company recorded a change in fair value of contingent consideration of $0.2 million.

No change in fair value was recorded during the nine months ended September 30, 2022.

(Loss) Gain on Equity Method Investments

During the nine months ended September 30, 2023, the Company recorded a loss of $0.3 million on equity method investments, representing its share of the losses incurred by an entity in which the Company has a minority interest.

During the nine months ended September 30, 2022, the Company recorded a gain on equity method investments of approximately $0.1 million.

Gain on Remeasurement of Finance Leases

During the nine months ended September 30, 2023, the Company did not record a gain or loss relating to a change in

estimated remaining liabilities under the terms of its leases.

During the nine months ended September 30, 2022, the Company recorded a gain of approximately $1.4 million, resulting from a change in estimated remaining liabilities under the terms of its leases.

(Loss) Gain on Disposal of Fixed Assets

During the nine months ended September 30, 2023, the Company recorded a loss of $0.2 million on the disposal of fixed assets.

During the nine months ended September 30, 2022, the Company recorded a gain of $42,667 on the disposal of fixed assets.

Income Tax (Provision)

During the nine months ended September 30, 2023, the Company recorded an income tax provision of $2.0 million, compared to an income tax provision of $1.2 million in the nine months ended September 30, 2022.

Net Income (Loss) Attributable to Noncontrolling Interests

For the nine months ended September 30, 2023, the Company had net income attributable to noncontrolling interests of approximately $2.8 million, compared to a net loss attributable to noncontrolling interests of $2.9 million for the nine months ended September 30, 2022.

The income compared to the prior year period loss reflected improved performance in the Company’s joint venture markets in the nine months ended September 30, 2023.

Liquidity and Capital Resources

Since inception, DocGo has completed three equity financing transactions as its principal source of liquidity.

Generally, the Company has utilized equity raised to finance operations, investments in assets, ambulance operating licenses and to fund accounts receivable.

Since inception and prior to the Business Combination, the Company completed three equity financing transactions as its principal source of liquidity.

In November 2021, upon the completion of the Business Combination and the PIPE Financing, the Company received proceeds of approximately $158.1 million, net of transaction expenses.

Generally, the Company has utilized proceeds from the financing transactions and the Business Combination to finance operations, invest in assets, acquire ambulance operating licenses and fund accounts receivable.

The Company has also funded these activities through operating cash flows.

In November 2021, upon the completion of the merger between Motion Acquisition Corp.

("Motion") and Ambulnz, Inc.

("Ambulnz"), the Company received proceeds of approximately $158.1 million, net of transaction expenses.

However, even when the Company generates positive net income, operating cash flows are not always sufficient to meet immediate obligations arising from current operations.

For example, as the business has grown, the Company’s expenditures for human capital and supplies has expanded accordingly, and the timing of the payments for payroll and to associated vendors, compared to the timing of receipts of cash from customers, frequently results in the need to use existing cash balances to fund these working capital needs.

The Company’s working capital needs depend on many factors, including the overall growth of the Company and the various payment terms that are negotiated with customers and vendors.

Future capital requirements depend on many factors, including potential acquisitions, DocGo’s level of investment in technology and ongoing technology development, and rate of growth in existing markets and into new markets.

The Company’s future capital requirements also depend on many factors, including potential acquisitions, the Company’s level of investment in technology and ongoing technology development, and rate of growth in existing markets and into new markets.

Capital requirements may also be affected by factors outside of the Company’s control, such as interest rates, rising inflation, financial institution instability or failure and other monetary and fiscal policy changes to the manner in which the Company currently operates.

If the Company’s growth rate is higher than is currently anticipated, resulting in greater-than-anticipated capital requirements, the Company might need to, or choose to, raise additional capital through debt or equity financings.

On November 1, 2022, the Company entered into a revolving loan and security agreement with two banks, with one bank acting as the administrative agent (the “Lenders”), with an initial maximum commitment amount of $90,000,000.

The revolving facility includes the ability for the Company to request an increase to the commitment by an additional amount of up to $50,000,000, though no Lender (nor the Lenders collectively) are obligated to increase their respective commitments.

Borrowings under the revolving facility bear interest at a per annum rate equal to (i) at the Company’s option, the (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin.

On November 1, 2022, the Company entered into the Credit Agreement, which provides for the Revolving Facility in the initial aggregate principal amount of $90 million.

The Revolving Facility includes the ability for the Company to request an increase to the commitment by an additional amount of up to $50 million, 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 Company’s consolidated net leverage ratio.

The revolving facility matures on November 1, 2027.

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

The revolving facility is subject to certain financial covenants, such as a net leverage ratio and interest coverage ratio, as defined in the agreement.

As of the date of the filing of this Quarterly Report on Form 10-Q, the Company has not made any draws under the facility and there are no amounts outstanding.

Considering the foregoing, DocGo anticipates that existing balances of cash and cash equivalents, future expected cash flows generated from our operations and the available line of credit (as discussed in Note 9, “Line of Credit” to the unaudited Condensed Consolidated Financial Statements) will be sufficient to satisfy operating requirements for at least the next twelve months.

The Revolving Facility matures on November 1, 2027 and is secured by a first-priority lien on substantially all of the Company’s present and future personal assets and intangible assets.

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

On October 19, 2023, the Company drew down $25 million under the Revolving Facility, and this amount remains outstanding as of the date of the filing of this Quarterly Report on Form 10-Q.

Considering the foregoing, the Company anticipates that existing balances of cash and cash equivalents, future expected cash flows generated from our operations and the remaining available line of credit under the Revolving Facility will be sufficient to satisfy operating requirements for at least the next twelve months.

Capital Resources

Working Capital as of June 30, 2023 and June 30, 2022

As of June 30, Change

Working capital as of September 30, 2023 and December 31, 2022 was as follows:

September 30 December 31 Change

$ in Millions 2023 2022

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Total working capital $ 154.0 $ 170.9 $ (17.0) (10.0 %)

As of June 30, 2023, available cash totaled $109.2 million, which represented a decrease of $89.0 million as compared to June 30, 2022, as acquisitions made during the second half of 2022 and in the first half of 2023 outweighed cash flow from operations.

As of June 30, 2023, working capital amounted to $142.6 million, which represented a decrease of $75.2 million as compared to June 30, 2022, primarily reflecting the decreased cash balance.

Increased accounts receivable in the six months ended June 30, 2023, which reflected the growth of the business and a shift towards higher credit quality customers, who have longer payment terms, were outweighed by the increase in current liabilities in the first half of 2023, which reflected the growth of the business and amounts due to the seller and contingent consideration resulting from acquisitions.

Six months ended June 30, 2023 and 2022

As of June 30, Change

As of September 30, 2023, available cash totaled $52.9 million, which represented a decrease of $104.4 million compared to December 31, 2022, reflecting a significant increase in accounts receivable and acquisitions made during the nine months ended September 30, 2023.

As of September 30, 2023, working capital amounted to $154.0 million, which represented a decrease of $17.0 million compared to December 31, 2022, primarily reflecting the decreased cash balance.

Increased accounts receivable in the nine months ended September 30, 2023, which reflected the growth of the business and a shift towards higher credit quality customers who have longer payment terms, partially offset by the decline in cash, resulting in a decline in current assets as of September 30, 2023 compared to December 31, 2022.

However, this was outweighed by the increase in current liabilities in the nine months ended September 30, 2023 due to higher accrued liabilities, reflecting the growth of the business and higher amounts of contingent consideration resulting from acquisitions.

Cash flows as of the nine months ended September 30, 2023 and 2022 were as follows:

As of September 30, Change

$ in Millions 2023 2022

Cash flow summary

Net cash used in operating activities $ (12.4) $ 30.2 $ (42.6) (141 %)

Net cash (used in) provided by operating activities $ (58.3) $ 37.6 $ (95.9) (255.1 %)

Net cash (used in) investing activities (26.9) (37.8) 10.9 28.8 %

Net cash used in financing activities (3.2) 1.1 (4.3) (390 %)

Net cash (used in) provided by financing activities (11.9) 0.7 (12.6) (1794.1 %)

Effect of exchange rate changes 0.2 (0.3) 0.5 (176.0 %)

Net decrease in cash $ (40.3) $ 29.3 $ (69.6) (238 %)

Net (decrease) increase in cash $ (96.9) $ 0.2 $ (97.1) (48526.6 %)

Operating Activities

During the six months ended June 30, 2023, operating activities used $12.4 million of cash, due in part to a net loss of $2.6 million.

Non-cash charges amounted to $19.4 million and included $4.7 million in depreciation of property and equipment and right-of-use assets, $2.8 million from amortization of intangible assets, $1.0 million in bad debt expense primarily related to a provision for potential uncollectible accounts receivable, $11.8 million of stock compensation expense, a $0.2 million loss on the disposal of assets and a loss of $0.2 million from an investment that is accounted for under the equity method.

These were partially offset by a non-cash gain of $1.3 million from a deferred tax asset.

Changes in assets and liabilities resulted in approximately $29.2 million in negative operating cash flow, as a $15.4 million increase in accounts receivable, driven by an increased amount of business with municipalities, who tend to have longer payment cycles;

a $14.9 million decrease in accounts payable, and a $0.2 million decrease in prepaid expenses outweighed a $1.2 million increase in accrued liabilities.

During the six months ended June 30, 2022, operating activities provided $30.2 million of cash, aided by net income of $21.1 million.

During the nine months ended September 30, 2023, operating activities used $58.3 million of cash, despite net income of $2.1 million.

Non-cash charges amounted to $28.1 million and included $7.5 million in depreciation of property and equipment and right-of-use assets, $4.3 million from amortization of intangible assets, $15.2 million of stock compensation expense, a $0.2 million loss on the disposal of assets and a loss of $0.3 million from an investment that is accounted for under the equity method, and $1.0 million in deferred taxes.

These were partially offset by a $0.3 million reduction in bad debt expense, and a non-cash gain of $0.2 million resulting from a reduction in the fair value of contingent consideration.

Changes in assets and liabilities resulted in approximately $88.4 million in negative operating cash flow, as a $103.5 million increase in accounts receivable, reflecting the growth of the business and primarily driven by an increased amount of business with municipalities, which tend to have longer payment cycles;

a $12.6 million decrease in accounts payable, and a $0.3 million increase in prepaid expenses and other current assets, partially offset by a $27.3 million increase in accrued liabilities and a $0.7 million decline in other assets.

During the nine months ended September 30, 2022, operating activities provided $37.6 million of cash, aided by net income of $23.6 million.

Non-cash charges amounted to $11.9 million and included $5.0 million in depreciation of property and equipment and right-of-use assets, $2.2 million from amortization of intangible assets, $2.7 million in bad debt expense primarily related to a provision for potential uncollectible accounts receivable and $4.6 million of stock compensation expense.

These were partially offset by non-cash gains of $1.4 million relating to the remeasurement of finance lease liabilities and $3.0 million from the remeasurement of warrant liabilities.

Changes in assets and liabilities resulted in approximately $3.9 million in additional operating cash flow, as a $4.3 million decrease in accounts receivable, a $2.1 million decrease in other assets and a $3.6 million increase in accrued liabilities outweighed the effect of a $3.2 million increase in prepaid expenses and a $2.9 million decline in accounts payable.

Operating cash flow in the first half of 2022 was aided by collections of large accounts receivable from invoices generated in the fourth quarter of 2021.

These were partially offset by non-cash gains of $1.4 million relating to the remeasurement of finance lease liabilities, $1.1 million from the remeasurement of warrant liabilities and a gain of $0.1 million from an investment that is accounted for under the equity method.

Changes in assets and liabilities resulted in an approximately $2.1 million increase to operating cash flow, as a $2.9 million decrease in accounts receivable, a $0.9 million decrease in

other assets and a $2.6 million increase in accrued liabilities outweighed the effect of a $0.3 million increase in prepaid expenses and a $4.0 million decline in accounts payable.

Investing Activities

During the six months ended June 30, 2023, investing activities used $25.4 million of cash and consisted of the acquisition of property and equipment totaling approximately $3.6 million, the acquisition of intangibles in the amount of $1.9 million and $20.2 million from the acquisition of businesses, partially offset by $0.3 in cash from the disposal of property and equipment.

During the six months ended June 30, 2022, investing activities used $2.0 million of cash and consisted of the acquisition of property and equipment totaling approximately $1.0 million and the acquisition of intangibles in the amount of $1.0 million to support the ongoing growth of the business.

During the nine months ended September 30, 2023, investing activities used $26.9 million of cash and consisted of the acquisition of property and equipment totaling approximately $4.4 million, the acquisition of intangibles in the amount of $2.5 million, the acquisition of businesses in the amount of $20.2 million, and an equity method investment in the amount of $0.2 million, partially offset by $0.3 million in cash proceeds from the disposal of property and equipment.

During the nine months ended September 30, 2022, investing activities used $37.8 million of cash and consisted of the acquisition of property and equipment totaling approximately $2.0 million, the acquisition of intangibles in the amount of $2.0 million and the acquisition of businesses in the amount of $33.8 million, primarily relating to acquisitions the Company completed in the third quarter of 2022.

Financing Activities

During the six months ended June 30, 2023, financing used $3.2 million of cash, primarily due to a $2.6 million decrease in amounts due to seller, relating to payments made for acquisitions that were completed in the second half of 2022 and early 2023;

$1.5 million in payments on obligations under the terms of finance leases, and $0.2 million in repayments of notes payable.

These were partially offset by $1.1 million in proceeds from the exercise of stock options.

During the six months ended June 30, 2022, financing activities provided $1.1 million of cash, due to $1.0 million in proceeds from one of the Company’s subsidiary’s revolving credit line, $2.1 million in non-controlling interest contributions and $0.7 million in proceeds from the exercise of stock options, which were partly offset by $1.4 million in payments on obligations under the terms of finance leases, $0.3 million in repayments of notes payable, a reduction of $0.9 million in amounts due to seller and $0.1 million in equity costs.

Future minimum annual maturities of notes payable as of the six months ended June 30, 2023 are as follows (in $ millions):

During the nine months ended September 30, 2023, financing activities used $11.9 million of cash, primarily due to a $8.4 million decrease in amounts due to seller, relating to payments made for acquisitions that were completed in the second half of 2022 and second quarter of 2023;

$2.3 million in payments on obligations under the terms of finance leases;

$2.2 million in payments for taxes related to shares withheld for employee taxes;

and $0.5 million in repayments of notes payable.

These amounts were partially offset by $1.5 million in proceeds from the exercise of stock options.

During the nine months ended September 30, 2022, financing activities provided $0.7 million of cash, and primarily included $2.0 million in non-controlling interest contributions, $1.9 million in proceeds from the exercise of stock options, and proceeds of $1.0 million from a revolving credit line.

These factors were partially offset by a $1.0 million decrease in amounts due to seller, $0.6 million in repayments of notes payable, $0.5 million in Common Stock repurchased, and $2.1 million in payments on obligations under the terms of finance leases.

Future minimum annual maturities of notes payable as of the nine months ended September 30, 2023 are as follows (in millions):

Notes Payable

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Long-term portion of notes payable $ 2.0

Future minimum lease payments under finance leases as of the six months ended June 30, 2023 are as follows (in $ millions):

Future minimum lease payments under finance leases as of the nine months ended September 30, 2023 are as follows (in millions):

Finance Leases

2023, remaining $ 0.9

Thereafter 0.1

Total future minimum lease payments 9.6

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Present value of future minimum lease payments $ 8.7

Future minimum lease payments under operating leases as of the six months ended June 30, 2023 are as follows (in $ millions):

Future minimum lease payments under operating leases as of the nine months ended September 30, 2023 are as follows (in millions):

2023, remaining $ 0.8

Thereafter 0.8

Total future minimum lease payments 10.9

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Basis of Presentation

The Company’s unaudited Condensed Consolidated Financial Statements are presented in conformity with accounting principles generally accepted in the United States of America (“U.S.

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

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

The Company’s unaudited Condensed Consolidated Financial Statements are presented in conformity with U.S.

GAAP and pursuant to the rules and regulations of the SEC.

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

All intercompany accounts and transactions are eliminated upon consolidation.

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

Accounts and transactions between consolidated entities have been eliminated.

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

NCI in the unaudited Condensed Consolidated Financial Statements represent the portion of consolidated joint ventures and a VIE in which the Company does not have direct equity ownership.

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

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.

Further, Ambulnz was determined to be the accounting acquirer in the Business Combination, and as such, the Business Combination is considered a business combination under ASC 805 and was accounted for using the acquisition method of accounting.

Principles of Consolidation

The Company’s unaudited Condensed Consolidated Financial Statements include the accounts of DocGo Inc and its subsidiaries.

The Company’s unaudited Condensed Consolidated Financial Statements include the accounts of DocGo Inc.

and its subsidiaries.

All significant intercompany transactions and balances have been eliminated in these unaudited Condensed Consolidated Financial Statements.

The Company holds a variable interest in 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.

The Company holds a variable interest in MD1, which contracts with physicians and other health professionals in order to provide services to the Company.

MD1 is considered a VIE since it does not have sufficient equity to finance its activities without additional subordinated financial support.

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

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

Net 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.

Business Combinations

The Company accounts for its business combinations under the provisions of ASC 805-10, Business Combinations (“ASC 805-10”), which requires that the acquisition method of accounting be used for all business combinations.

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 $0.6 million as of September 30, 2023.

Total liabilities, all of which were current for MD1, were $0.5 million as of September 30, 2023.

MD1’s total stockholders’ equity was $0.2 million as of September 30, 2023.

Business Combination

The Company accounts for its business combinations under the provisions of ASC 805-10, which requires that the acquisition method of accounting be used for all business combinations.

Assets acquired and liabilities assumed, including NCI, are recorded at the date of acquisition at their respective fair values.

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or (iv) a sustained decrease in our market capitalization, as indicated by our publicly quoted share price, below our net book value.

On February 3, 2023, Ambulnz Health, LLC (“Health”), commenced an assignment for the benefit of creditors (“ABC”) pursuant to California law.

On February 3, 2023, Health commenced an ABC pursuant to California law.

An ABC is a liquidation process governed by state law (California law in this instance) that is an alternative to a bankruptcy case under 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 an assignee (the “Assignee”) who acts as a fiduciary for creditors and in a capacity equivalent to that of a bankruptcy trustee.

The Assignee is responsible for liquidating the 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.

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

Revenue Recognition

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

On January 1, 2019, the Company adopted 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:

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

and (5) recognize revenue when (or as) the relevant performance obligation is

and (5) recognize revenue when (or as) the relevant performance obligation is satisfied.

The Company only applies the five-step model to contracts when it is probable that the Company will be able to collect the consideration it is entitled to in exchange for the goods or services the Company provides to the customer.

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

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

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

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

Therefore, the Company satisfies performance obligations immediately.

The Company has utilized the “right to invoice” expedient.

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

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

1 unchanged sentence

All transaction prices are fixed and determinable which includes a fixed base rate, fixed mileage rate and an evaluation of historical collections by each payor.

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

Income taxes are recorded in accordance with ASC 740, which provides for deferred taxes using an asset and liability approach.

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or its tax returns.

7 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis