DocGo Inc. 10-K

Item 8. Financial Statements and Supplementary Data. 69 Table of Contents DocGo Inc. and Subsidiaries Index to the Consolidated Financial Statements Report s of Independent Registered Public Accounting Firm (PCAOB ID: 1013 ) F- 2 Consolidated Balance Sheets as of December 31, 202 3 and 202 2 F- 5 Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 202 3 , 2022 and 20 2 1 F- 7 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 202 3 , 2022 and 20 2 1 F- 8 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 3 , 2022 and 20 21 F- 10 Notes to Consolidated Financial Statements F- 12 F-1 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors DocGo Inc. and Subsidiaries New York, New York Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of DocGo, Inc. and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 , in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 28, 2024 expressed an unqualified opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Loss allowance for Accounts Receivable As described in Note 2 to the consolidated financial statements, the Company recorded consolidated accounts receivable of approximately $262.1 million net of a loss allowance of approximately $6.3 million at December 31, 2023. The allowance is management’s estimate of loss allowance on accounts receivable after considering quantitative and qualitative factors, applied for accounts receivables without a significant financing component by using a loss provision. Management makes periodic as well as individual assessments on the recoverability of accounts receivables based on customer historical credit loss experience, and where necessary, adjusted for information based on macroeconomic factors affecting the ability of its customers to settle the accounts receivables. Accounts receivables from customers with known financial difficulties or with significant doubt on collection of receivables are assessed individually for a loss allowance. Management assesses other customers by grouping them based on shared credit risk characteristics including geographical location, service type and payor. F-2 Table of Contents The principal considerations for our determination that performing procedures relating to the loss allowance for accounts receivables is a critical audit matter are the significant judgment by management in determining the loss allowance for accounts receivable as influenced by qualitative factors in particular, which led to a high level of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence obtained. The primary procedures we performed to address this critical audit matter included: • Testing the effectiveness of controls relating to the loss allowance for trade receivables. • Testing management’s process included (i) evaluating the appropriateness of the methodology and models; (ii) testing the completeness and accuracy of certain data used in the estimate; (iii) evaluating management’s process to identify customers with known financial difficulties; and (iv) evaluating the reasonableness of significant assumptions and judgments made by management to estimate the loss allowance for accounts receivable, including the grouping of accounts receivables based on type of service and historical collections. Revenue Recognition – Transport Services As described in Note 2 to the consolidated financial statements, the Company recorded transport services revenue of approximately $181.5 million. Transport revenues are recorded net of an estimated contractual allowances for claims subject to contracts with responsible paying entities. The Company estimates contractual allowances at the time of billing based on contractual terms and historical collections by each payor and geographical location. The principal considerations for our determination that performing procedures relating to the transport revenue is a critical audit matter are the significant judgement by management in determining the lookback periods of historical collections which led to a high level of auditor judgment, subjectivity, and effort in performing procedures. The primary procedures we performed to address this critical audit matter included: • Testing the effectiveness of controls relating to transport services revenue recognition. • Testing the Company’ process included (i) selected a sample of transactions and verified the transport service has been performed (ii) obtained supporting cash collections for a sample of transactions (iii) obtained the Company’s historical collections for recent completed services, verified the receipts and recalculated the applied historical rate to the recorded revenue (iv) obtained the Company’s historical collections and verified these collections to ensure appropriate reserves for unpaid, open services. /s/ Urish Popeck & Co., LLC We have served as the Company’s auditor since 2021. Pittsburgh, PA February 28, 2024 F-3 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors DocGo, Inc. and Subsidiaries New York, New York Opinion on Internal Control over Financial Reporting We have audited DocGo Inc. and Subsidiaries’ (the “Company’s”) internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on the COSO criteria . We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of DocGo, Inc. and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated February 28, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Urish Popeck & Co., LLC Pittsburgh, PA February 28, 2024 F-4 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS December 31, 2023 2022 ASSETS Current assets: Cash and cash equivalents $ 59,286,147 $ 157,335,323 Accounts receivable, net of allowance of $ 6,276,454 and $ 7,818,702 as of December 31, 2023 and December 31, 2022, respectively 262,083,462 102,995,397 Assets held for sale — 4,480,344 Prepaid expenses and other current assets 17,499,953 6,269,841 Total current assets 338,869,562 271,080,905 Property and equipment, net 16,835,484 21,258,175 Intangibles, net 37,682,928 22,969,246 Goodwill 47,539,929 38,900,413 Restricted cash 12,931,839 6,773,751 Operating lease right-of-use assets 9,580,535 9,074,277 Finance lease right-of-use assets 12,003,919 9,039,663 Equity method investments 553,573 597,977 Deferred tax assets 11,888,539 9,957,967 Other assets 2,565,649 3,625,254 Total assets $ 490,451,957 $ 393,277,628 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 19,827,258 $ 21,582,866 Accrued liabilities 91,340,609 31,573,031 Line of credit 25,000,000 — Notes payable, current 28,131 664,913 Due to seller 7,823,009 26,244,133 Contingent consideration 19,792,982 10,555,540 Operating lease liability, current 2,773,020 2,325,024 Liabilities held for sale — 4,480,344 Finance lease liability, current 3,534,073 2,732,639 Total current liabilities 170,119,082 100,158,490 Notes payable, non-current 41,586 1,236,601 Operating lease liability, non-current 7,223,941 7,040,982 Finance lease liability, non-current 7,896,392 5,914,164 Total liabilities 185,281,001 114,350,237 Commitments and contingencies Stockholders’ equity: Common stock ($ 0.0001 par value; 500,000,000 shares authorized as of December 31, 2023 and December 31, 2022; 104,055,168 and 102,411,162 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively) 10,406 10,241 Additional paid-in-capital 320,693,866 301,451,435 Accumulated deficit ( 21,394,310 ) ( 28,972,216 ) F-5 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS (CONTINUED) December 31, 2023 2022 Accumulated other comprehensive income 1,484,905 741,206 Total stockholders’ equity attributable to DocGo Inc. and Subsidiaries 300,794,867 273,230,666 Noncontrolling interests 4,376,089 5,696,725 Total stockholders’ equity 305,170,956 278,927,391 Total liabilities and stockholders’ equity $ 490,451,957 $ 393,277,628 The accompanying notes are an integral part of these Consolidated Financial Statements. F-6 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Year Ended December 31, 2023 2022 2021 Revenues, net $ 624,288,642 $ 440,515,746 $ 318,718,580 Expenses: Cost of revenues (exclusive of depreciation and amortization, which is shown separately below) 428,906,225 285,794,520 208,971,062 Operating expenses: General and administrative 137,152,512 103,403,416 74,892,828 Depreciation and amortization 16,431,892 10,565,578 7,511,579 Legal and regulatory 13,082,569 8,780,590 3,907,660 Technology and development 10,858,724 5,384,853 3,320,183 Sales, advertising and marketing 2,801,740 4,755,161 4,757,970 Total expenses 609,233,662 418,684,118 303,361,282 Income from operations 15,054,980 21,831,628 15,357,298 Other income: Interest income (expense), net 1,684,399 762,685 ( 763,030 ) Gain on remeasurement of warrant liabilities — 1,127,388 5,199,496 Change in fair value of contingent liability 1,437,525 — — (Loss) gain on equity method investments ( 343,336 ) 8,919 ( 66,818 ) (Loss) gain on remeasurement of operating and finance leases ( 866 ) 1,388,273 — Gain on bargain purchase — 1,593,612 — Gain from PPP loan forgiveness — — 142,667 Loss on disposal of fixed assets ( 852,544 ) ( 21,173 ) ( 34,342 ) Goodwill impairment — ( 2,921,958 ) — Other expense ( 686,865 ) ( 987,482 ) ( 40,086 ) Total other income 1,238,313 950,264 4,437,887 Net income before (provision for) benefit from income tax 16,293,293 22,781,892 19,795,185 (Provision for) benefit from income taxes ( 6,244,965 ) 7,961,321 ( 615,697 ) Net income 10,048,328 30,743,213 19,179,488 Net income (loss) attributable to noncontrolling interests 3,189,873 ( 3,841,285 ) ( 4,564,270 ) Net income attributable to stockholders of DocGo Inc. and Subsidiaries 6,858,455 34,584,498 23,743,758 Other comprehensive income Foreign currency translation adjustment 743,699 773,707 16,038 Total comprehensive income $ 7,602,154 $ 35,358,205 $ 23,759,796 Net income per share attributable to DocGo Inc. and Subsidiaries - Basic $ 0.07 $ 0.34 $ 0.30 Weighted-average shares outstanding - Basic 103,511,299 101,228,369 80,293,959 Net income per share attributable to DocGo Inc. and Subsidiaries - Diluted $ 0.06 $ 0.34 $ 0.25 Weighted-average shares outstanding - Diluted 105,617,817 102,975,831 94,863,613 The accompanying notes are an integral part of these Consolidated Financial Statements. F-7 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Series A Preferred Stock Class A Common Stock Class B Common Stock Additional Paid-in- Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Noncontrolling Interests Total Stockholders’ Equity Shares Amount Shares Amount Shares Amount Balance - December 31, 2020 28,055 $ — 35,497 $ — 55,008 $ — $ 142,346,852 $ ( 87,300,472 ) $ ( 48,539 ) $ 11,949,200 $ 66,947,041 Effect of reverse acquisition 18,099,548 — 22,900,719 — 35,488,938 — — — — — — Conversion of share due to merger recapitalization ( 18,099,548 ) — ( 22,900,719 ) 7,649 ( 35,488,938 ) — — — — — 7,649 Effect of reverse acquisition — — 76,489,205 7,649 — — 142,346,852 ( 87,300,472 ) ( 48,539 ) 11,949,200 66,954,690 Share issued for services — — 171,608 17 — — — — — — 17 Exercise of cashless warrants — — 1,817,507 182 — — — — — — 182 Issuance of shares net redemption and issuance costs of $ 9,566,304 — — 5,297,097 530 — — 43,404,558 — — — 43,405,088 PIPE, net of issuance costs of $ 10,396,554 — — 12,500,000 1,250 — — 114,602,318 — — — 114,603,568 Exercise of stock options — — 1,235,131 123 — — 628,469 — — — 628,592 Stock based compensation — — — — — — 1,376,353 — — — 1,376,353 Fair value of Warrants from reverse acquisition — — — — — — ( 18,717,998 ) — — — ( 18,717,998 ) UK Ltd. Shares purchase — — 50,192 5 — — ( 479,336 ) — — ( 242,945 ) ( 722,276 ) Sponsor Earnout shares — — 2,573,213 257 — — — — — — 257 Noncontrolling interest contribution — — — — — — — — — 333,025 333,025 Foreign currency translation — — — — — — — — 16,038 — 16,038 Net loss attributable to noncontrolling interests — — — — — — — — — ( 4,564,270 ) ( 4,564,270 ) Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — — — — — 23,743,758 — — 23,743,758 Balance - December 31, 2021 — $ — 100,133,953 $ 10,013 — $ — $ 283,161,216 $ ( 63,556,714 ) $ ( 32,501 ) $ 7,475,010 $ 227,057,024 Equity cost — — — — — — ( 19,570 ) — — — ( 19,570 ) Noncontrolling interest contribution — — — — — — — — — 2,063,000 2,063,000 Common stock repurchased — — ( 536,839 ) ( 54 ) — — ( 3,731,658 ) — — — ( 3,731,712 ) Exercise of stock options — — 1,053,401 105 — — 1,980,674 — — — 1,980,779 Cashless exercise of options — — 354,276 36 — — ( 230 ) — — — ( 194 ) Stock based compensation — — — — — — 7,183,992 — — — 7,183,992 Restricted stock units — — — — — — 495,579 — — — 495,579 Share warrants conversion — — 1,406,371 141 — — 12,381,432 — — — 12,381,573 Net loss attributable to noncontrolling interests — — — — — — — — — ( 3,841,285 ) ( 3,841,285 ) Foreign currency translation — — — — — — — — 773,707 — 773,707 Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — — — — — 34,584,498 — — 34,584,498 Balance - December 31, 2022 — $ — 102,411,162 $ 10,241 — $ — $ 301,451,435 $ ( 28,972,216 ) $ 741,206 $ 5,696,725 $ 278,927,391 UK Ltd. restricted stock — — — — — — 167,175 — — — 167,175 Health liquidation — — — — — — — 70,284 — — 70,284 Acquisition of CRMS — — 117,330 12 — — 1,000,000 — — — 1,000,012 F-8 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (CONTINUED) Acquisition of FMC NA — — 360,145 36 — — ( 1,432,963 ) 649,167 — ( 3,213,956 ) ( 3,997,716 ) Acquisition of Healthworx — — — — — — — — — ( 1,296,553 ) ( 1,296,553 ) Exercise of stock options — — 465,429 46 — — 1,413,962 — — — 1,414,008 Cashless exercise of options — — 6,374 1 — — ( 1 ) — — — — Shares withheld for taxes — — ( 280,654 ) ( 27 ) — — ( 2,308,927 ) — — — ( 2,308,954 ) Stock-based compensation — — 975,382 97 — — 20,403,185 — — — 20,403,282 Net loss attributable to noncontrolling interests — — — — — — — — — 3,189,873 3,189,873 Foreign currency translation — — — — — — — — 743,699 — 743,699 Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — — — — — 6,858,455 — — 6,858,455 Balance - December 31, 2023 — $ — 104,055,168 $ 10,406 — $ — $ 320,693,866 $ ( 21,394,310 ) $ 1,484,905 $ 4,376,089 $ 305,170,956 The accompanying notes are an integral part of these Consolidated Financial Statements. F-9 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2023 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 10,048,328 $ 30,743,213 $ 19,179,488 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation of property and equipment 4,829,780 4,114,346 2,312,437 Amortization of intangible assets 5,249,358 3,214,814 1,845,193 Amortization of finance lease right-of-use assets 6,352,754 3,236,418 2,913,925 Loss on disposal of assets 852,544 21,173 34,342 Deferred income tax ( 1,981,519 ) ( 9,957,967 ) ) — Gain from PPP loan forgiveness — — ( 142,667 ) Loss (gain) on equity method investments 343,336 ( 8,919 ) ) 66,818 Bad debt expense 3,601,520 3,815,187 4,467,956 Stock-based compensation 20,969,174 8,054,571 1,376,353 Loss on remeasurement of operating and finance leases 866 ( 1,388,273 ) ) — Loss on liquidation of business 70,284 — — Gain on remeasurement of warrant liabilities — ( 1,127,388 ) ( 5,199,496 ) Gain on bargain purchase — ( 1,593,612 ) — Goodwill impairment — 2,921,958 — Change in fair value of contingent consideration ( 1,437,525 ) — — Changes in operating assets and liabilities: Accounts receivable ( 160,524,934 ) ( 8,415,793 ) ( 57,996,613 ) Asset held for sale — 190,312 — Prepaid expenses and other current assets ( 10,843,890 ) ( 4,181,035 ) ( 961,165 ) Other assets 1,059,605 1,557,655 ( 2,490,564 ) Accounts payable ( 1,780,403 ) 3,637,305 11,879,850 Accrued liabilities 58,968,844 ( 5,964,064 ) 20,766,723 Net cash (used in) provided by operating activities ( 64,221,878 ) 28,869,901 ( 1,947,420 ) CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment ( 7,584,561 ) ( 3,198,234 ) ( 4,808,409 ) Acquisition of intangibles ( 2,541,661 ) ( 2,299,558 ) ( 1,849,136 ) Acquisition of businesses ( 20,203,464 ) ( 32,953,179 ) ( 1,300,000 ) Equity method investments ( 298,932 ) — ( 655,876 ) Proceeds from disposal of property and equipment 747,088 3,000 74,740 Acquisition of leased assets — — ( 50,504 ) Net cash used in investing activities ( 29,881,530 ) ( 38,447,971 ) ( 8,589,185 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit line 25,000,000 — 8,000,000 Repayments of revolving credit line — ( 25,881 ) ( 8,000,000 ) Repayments of notes payable ( 25,926 ) ( 925,151 ) ( 604,826 ) Due to seller ( 13,590,382 ) ( 2,535,521 ) ( 595,528 ) Earnout payments on contingent liabilities ( 5,266,681 ) — — Noncontrolling interest contributions — 2,063,000 333,025 Proceeds from exercise of stock options 1,581,183 1,980,585 628,592 Acquisition of UK Ltd remaining 20% shares — — ( 479,331 ) F-10 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) Payments for taxes related to shares withheld for employee taxes ( 2,308,954 ) — — Common stock repurchased — ( 3,731,712 ) — Equity costs — ( 19,570 ) — Payments on obligations under finance lease ( 4,270,553 ) ( 2,985,568 ) ( 2,216,309 ) Issuance costs related to merger recapitalization — — ( 19,961,460 ) Proceeds from issuance of Class A common stock, net of transaction cost — — 178,102,313 Net cash provided (used) in financing activities 1,118,687 ( 6,179,818 ) 155,206,476 Effect of exchange rate changes on cash and cash equivalents 1,093,633 761,232 ( 21,414 ) Net (decrease) increase in cash and restricted cash ( 91,891,088 ) ( 14,996,656 ) 144,648,457 Cash and restricted cash at beginning of period 164,109,074 179,105,730 34,457,273 Cash and restricted cash at end of period $ 72,217,986 $ 164,109,074 $ 179,105,730 Year Ended December 31, 2023 2022 2021 Supplemental disclosure of cash and non-cash transactions: Cash paid for interest $ 250,100 $ 197,005 $ 315,272 Cash paid for interest on finance lease liabilities $ 600,239 $ 559,596 $ 525,476 Cash paid for income taxes $ 4,251,658 $ 1,505,235 $ 615,697 Right-of-use assets obtained in exchange for lease liabilities $ 7,621,538 $ 5,035,201 $ 5,271,662 Fixed assets acquired in exchange for notes payable $ — $ 923,377 $ 1,113,102 Gain from PPP loan forgiveness $ — $ — $ 142,667 Due to seller non-cash $ — $ — $ 434,494 Acquisition of remaining FMC NA through due to seller and issuance of stock $ 7,000,000 $ — $ — Acquisition of CRMS through issuance of stock $ 1,000,000 $ — $ — Receivable exchanged for trade credits $ 1,500,000 $ — $ — Reconciliation of cash and restricted cash Cash $ 59,286,147 $ 157,335,323 $ 175,537,221 Restricted cash 12,931,839 6,773,751 3,568,509 Total cash and restricted cash shown in statement of cash flows $ 72,217,986 $ 164,109,074 $ 179,105,730 The accompanying notes are an integral part of these Consolidated Financial Statements. F-11 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS . 1. Description of Organization and Business Operations On November 5, 2021, DocGo Inc., a Delaware corporation, then known as Motion Acquisition Corp. (collectively with its subsidiaries, the “Company”), consummated a business combination pursuant to that certain Agreement and Plan of Merger, dated March 8, 2021 (the “Merger Agreement”), by and among the Company, Motion Merger Sub Corp., a Delaware corporation and a direct wholly owned subsidiary of the Company (“Merger Sub”), and Ambulnz, Inc., a Delaware corporation (“Ambulnz”). The transactions contemplated by the Merger Agreement are referred to herein as the “Business Combination.” In connection with the closing of the Business Combination, the Company changed its name from Motion Acquisition Corp. to DocGo Inc. As contemplated by the Merger Agreement and as described in the Company’s definitive proxy statement/consent solicitation/prospectus filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 14, 2021, Merger Sub merged with and into Ambulnz, with Ambulnz continuing as the surviving corporation. As a result of the Business Combination, Ambulnz became a wholly owned subsidiary of the Company and each share of Series A preferred stock of Ambulnz, no par value, Class A common stock of Ambulnz, no par value, and Class B common stock of Ambulnz, no par value, was cancelled and converted into the right to receive a portion of the merger consideration issuable as common stock of the Company, par value $ 0.0001 (“Common Stock”), pursuant to the terms and conditions set forth in the Merger Agreement. In connection with the Business Combination, the Company raised $ 158,000,000 of net proceeds. This amount consisted of (i) $ 43,400,000 of cash held in the Company’s trust account established in connection with its initial public offering, net of the Company’s transaction costs and underwriters’ fees of $ 9,600,000 , and (ii) $ 114,600,000 of cash from the sale of shares of Common Stock to certain investors at a price of $ 10.00 per share in a private placement that closed concurrently with the Business Combination (the “PIPE Financing”), net of $ 10,400,000 in transaction costs in connection with the PIPE Financing. These transaction costs consisted of banking, legal, and other professional fees, which were recorded as a reduction to additional paid-in capital. The Business The Company is a mobile healthcare services company that uses proprietary dispatch and communication technology to help provide quality mobile, in-person medical treatment directly to patients in the comfort of their homes, workplaces and other non-traditional locations and healthcare transportation in major metropolitan cities in the United States (“U.S.”) and the United Kingdom (“U.K.”). Ambulnz was originally formed in Delaware on June 17, 2015 as Ambulnz, LLC, a limited liability company. On November 1, 2017, with an effective date of January 1, 2017, Ambulnz converted its legal structure from a limited liability company to a C-corporation and changed its name to Ambulnz, Inc. Ambulnz is the sole owner of Ambulnz Holdings, LLC (“Holdings”), which was formed in the state of Delaware on August 5, 2015 as a limited liability company. Holdings is the owner of multiple operating entities incorporated in various states in the U.S. as well as within England and Wales, U.K. The Company conducts business in three operating segments: Mobile Health Services, Transportation Services and Corporate. Mobile Health Services include a wide variety of healthcare services performed at homes, offices and other locations and event services such as on-site healthcare support at sporting events and concerts. This segment also provides total care management solutions to large, typically underserved, population groups primarily through arrangements with municipalities, which include healthcare services as well as ancillary services, such as shelter. Transportation Services encompass both emergency response and non-emergency transport services. Non-emergency transport services include ambulance transports and wheelchair transports. Net revenue from Transportation Services is derived from the transportation of patients based on billings to third party payors and healthcare facilities. The Company’s Corporate segment primarily represents shared services and personnel that support both the Transportation Services and Mobile Health Services segments. It contains operating expenses such as information technology costs, certain insurance costs and the compensation costs of senior and executive leadership. None of the Company’s revenues or cost of revenues are reported within the Corporate segment. F-12 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and applicable rules and regulations of the SEC. Principles of Consolidation The Consolidated Financial Statements include the accounts and operations of DocGo Inc. and its subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation. Noncontrolling interests on the Consolidated Financial Statements represent a portion of consolidated joint ventures and a variable interest entity in which the Company does not have direct equity ownership. Certain amounts in the prior years’ consolidated statements of changes in stockholders’ equity and statements of cash flows have been reclassified to conform to the current year presentation. The Business Combination was accounted for as a reverse recapitalization in accordance with U.S. GAAP (the “Reverse Recapitalization”). 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, and as such, the acquisition is considered a business combination under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations (“ASC 805”) and was accounted for using the acquisition method of accounting. In accordance with ASC 810, Consolidation (“ASC 810”), the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are variable interest entities (“VIEs”). For those entities that qualify as VIEs, ASC 810 requires the Company to determine if the Company is the primary beneficiary of the VIE, and if so, to consolidate the VIE. The Company holds variable interests in legal entities, which contract with physicians and other health professionals in order to provide services to the Company. These entities are considered VIEs since they do not have sufficient equity to finance their activities without additional subordinated financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it is the primary beneficiary, meaning it has (1) the power to direct the activities of the VIE that most significantly impacts the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of its VIEs and funds and absorbs all losses of its VIEs. The Company has determined that it is the primary beneficiary of its VIEs and therefore appropriately consolidates its VIEs. Net loss for the Company’s VIEs were $ 235,976 , $ 373,456 and $ 122,982 for the years ended December 31, 2023, 2022 and 2021, respectively. The total assets amounted to $ 4,364,274 and $ 610,553 on December 31, 2023 and 2022, respectively. Total liabilities were $ 4,811,857 and $ 320,424 on December 31, 2023 and 2022, respectively. The Company’s VIEs total stockholders’ deficit were $ 447,583 and $ 290,130 on December 31, 2023 and 2022, respectively. Foreign Currency The Company’s functional currency is the U.S. dollar. The functional currency of our foreign operation is the British pound. Assets and liabilities of foreign operations denominated in local currencies are translated at the spot rate in effect at the applicable reporting date, except for equity accounts which are translated at historical rates. The Consolidated Statements of Operations and Comprehensive Income are translated at the weighted average rate of exchange during the applicable period. The resulting unrealized cumulative translation adjustment for the years ended December 31, 2023, 2022 and 2021 were $ 743,699 , $ 773,707 , and $ 16,038 , respectively. F-13 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in its financial statements and the reported amounts of expenses during the reporting period. The most significant estimates in the Company’s financial statements relate to revenue recognition related to the allowance for doubtful accounts, stock-based compensation, calculations related to the incremental borrowing rate for the Company’s lease agreements, estimates related to ongoing lease terms, software development costs, impairment of long-lived assets, goodwill and indefinite-lived intangible assets, business combinations, reserve for losses within the Company’s insurance deductibles, income taxes, and deferred income tax. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially and adversely from these estimates. To the extent there are material differences between the estimates and actual results, the Company’s future results of operations could be adversely affected. Self-Insurance Reserves The Company self-insures a number of risks, including, but not limited to, workers’ compensation, general liability, auto liability and certain employee-related healthcare benefits. Standard actuarial procedures and data analysis are used to estimate the liabilities associated with these risks on an undiscounted basis. The recorded liabilities reflect the ultimate cost for claims incurred but not paid and any estimable administrative run-out expenses related to the processing of these outstanding claim payments. On a regular basis, the liabilities are evaluated for appropriateness with claims reserve valuations. To limit exposure to some risks, the Company maintains insurance coverage with varying limits and retentions, including stop-loss insurance coverage for workers’ compensation, general liability and auto liability. Concentration of Credit Risk and Off-Balance Sheet Risk The Company is potentially subject to concentration of credit risk with respect to its cash, cash equivalents and restricted cash, which the Company attempts to minimize by maintaining cash, cash equivalents and restricted cash with institutions of sound financial quality. At times, cash balances may exceed limits federally insured by the Federal Deposit Insurance Corporation (“FDIC”). The Company believes it is not exposed to significant credit risk due to the financial strength of the depository institutions in which the funds are held. The Company has no financial instruments with off-balance sheet risk of loss. Major Customers The Company had one customer that accounted for approximately 40 % of revenues and 42 % of net accounts receivable and another customer that accounted for 21 % of revenues and 40 % of net accounts receivable for the year ended December 31, 2023. The Company had one customer that accounted for approximately 35 % of revenues and 45 % of net accounts receivable for the year ended December 31, 2022. The Company had one customer that accounted for approximately 23 % of revenues and 26 % of net accounts receivable and another customer that accounted for 26 % of revenues and 24 % of net accounts receivable for the year ended December 31, 2021. F-14 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Major Vendor The Company had one vendor that accounted for approximately 14 %, 12 % and 11 % of total cost for the years ended December 31, 2023, 2022 and 2021, respectively. The Company expects to maintain this relationship with the vendor and believes the services provided from this vendor are available from alternatives sources. Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying Consolidated Financial Statements to maintain consistency between periods presented. The reclassifications had no impact on previously reported net income or retained earnings. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. The Company maintains most of its cash and cash equivalents with financial institutions in the U.S. The Company’s accounts at financial institutions in the U.S. are insured by the FDIC and are in excess of FDIC insured limits. The Company had cash balances of approximately $ 3,699,793 and $ 8,125,966 with foreign financial institutions on December 31, 2023 and 2022, respectively. Restricted Cash Cash and cash equivalents subject to contractual restrictions and not readily available are classified as restricted cash in the Consolidated Balance Sheets. Restricted cash is classified as either a current or non-current asset depending on the restriction period. The Company is required to pledge or otherwise restrict a portion of cash and cash equivalents as collateral for self-insurance exposures, transportation equipment leases and a standby letter of credit as required by its insurance carrier (see Notes 9 and 15). The Company utilizes a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks, including workers’ compensation, automobile liability, general liability and professional liability. Liabilities associated with the risks that are retained by the Company within its high deductible limits are not discounted and are estimated, in part, by considering claims experience, exposure and severity factors and other actuarial assumptions. The Company has commercial insurance in place for catastrophic claims above its deductible limits. ARM Insurance, Inc. a Vermont-based wholly-owned captive insurance subsidiary of the Company, charges the operating subsidiaries premiums to insure the retained workers’ compensation, automobile liability, general liability and professional liability exposures. Pursuant to Vermont insurance regulations, ARM Insurance, Inc. maintains certain levels of cash and cash equivalents related to its self-insurance exposures. The Company also maintains certain cash balances related to its insurance programs, which are held in a self-depleting trust and restricted as to withdrawal or use by the Company other than to pay or settle self-insured claims and costs. These amounts are reflected in “Restricted cash” in the accompanying Consolidated Balance Sheets. Fair Value of Financial Instruments ASC 820, Fair Value Measurements , provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. F-15 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2023, December 31, 2022 and December 31, 2021 . For certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, restricted cash, accounts payable and accrued expenses, and due to seller, the carrying amounts approximate their fair values as it is short term in nature. The notes payable are presented at their carrying value, which based on borrowing rates currently available to the Company for loans with similar terms, approximates its fair values. Level 3 instruments are valued based on unobservable inputs that are supported by little or no market activity and reflect the Company’s own assumptions in measuring fair value. Future changes in fair value of the contingent financial milestone consideration, as a result of changes in significant inputs such as the discount rate and estimated probabilities of financial milestone achievements, could have a material effect on the Consolidated Statements of Operations and Comprehensive Income and Consolidated Balance Sheets in the period of the change. During the year ended December 31, 2022, the Company recorded $ 4,000,000 in contingent consideration in connection with the acquisition by Holdings of Ryan Bros. Fort Atkinson, LLC (“Ryan Brothers”) to be paid based on the completion of certain performance obligations over a 24-month period. During the year, the Company recorded a change in fair value of contingent consideration in the amount of $ 338,956 and made a payment of $ 1,840,026 . As of December 31, 2023, the remaining contingent liability balance was $ 1,821,018 (see Note 4). In connection with the acquisition of Exceptional Medical Transportation, LLC (“Exceptional”), the Company also agreed to pay up to $ 2,000,000 in contingent consideration upon meeting certain performance conditions within two years of the closing date of such acquisition. During the year, the Company recorded a change in fair value of contingent consideration in the amount of $ 374,044 and made a payment of $ 426,655 . The estimated contingent consideration amount for Exceptional was $ 279,301 and $ 1,080,000 as of December 31, 2023 and December 31, 2022 , respectively (see Note 4). During the year ended December 31, 2022, the Company also recorded $ 2,475,540 estimated contingent consideration in connection with the acquisition by Holdings of Location Medical Services, LLC (“LMS”) to be paid upon LMS meeting certain performance conditions in 2023. The Company recorded a change in fair value of contingent consideration in the amount of $ 2,000,312 and recorded $ 129,599 as a result of foreign exchange movement. The outstanding balance as of December 31, 2023 was $ 604,827 (see Note 4). In connection with the acquisition by Holdings of Government Medical Services, LLC (“GMS”), the Company recorded $ 3,000,000 in contingent consideration to be paid upon GMS meeting certain performance conditions within a year of the closing date of such acquisition. During the year, the Company made a $ 3,000,000 payment to settle the contingent liability balance as of December 31, 2023. As of December 31, 2022, there was a balance of $ 3,000,000 (see Note 4). In connection with the acquisition by Holdings of Cardiac RMS, LLC (“CRMS”), the Company recorded $ 15,822,190 in contingent consideration to be paid out over 36 months for the remaining 49 % equity of CRMS, based on CRMS’ attainment of full-year EBITDA targets. The Company recorded a change in fair value of contingent consideration in the amount of $ 1,265,645 for the year ended December 31, 2023. As of December 31, 2023, there was a remaining contingent liability balance of $ 17,087,835 (see Note 4). Accounts Receivable The Company contracts with hospitals, healthcare facilities, businesses, state and local government entities, and insurance providers to provide Mobile Health Services and to transport patients at specified rates. These rates are either on a per procedure or per transport basis, or on an hourly or daily basis. Accounts receivable consist of billings for transportation and healthcare services provided to patients. Billings typically are either paid or settled on the patient’s behalf by health insurance providers, managed care organizations, treatment facilities, government sponsored programs or businesses, or by patients directly. Accounts receivable are net of insurance provider contractual allowances, which are estimated at the time F-16 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) of billing based on contractual terms or other arrangements. Accounts receivable are periodically evaluated for collectability based on past credit history with payors and their current financial condition. Changes in the estimated collectability of accounts receivable are recorded in the results of operations for the period in which the estimate is revised. Accounts receivable deemed uncollectible are offset against the allowance for uncollectible accounts. The Company generally does not require collateral for accounts receivable . Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. When an item is sold or retired, the costs and related accumulated depreciation or amortization are eliminated, and the resulting gain or loss, if any, is recorded in operating expenses in the Consolidated Statements of Operations and Comprehensive Income. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the respective assets. A summary of estimated useful lives is as follows: Estimated Useful Life Buildings 39 years Office equipment and furniture 3 years Vehicles 5 - 8 years Medical equipment 5 years Leasehold improvements Shorter of useful life of asset or lease term Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures that improve an asset or extend its estimated useful life are capitalized. Software Development Costs Costs incurred during the preliminary project stage, maintenance costs and routine updates and enhancements of products are expensed as incurred. The Company capitalizes software development costs intended for internal use in accordance with ASC 350-40, Internal-Use Software . Costs incurred in developing the application of its software and costs incurred to upgrade or enhance product functionalities are capitalized when it is probable that the expenses would result in future economic benefits to the Company and the functionalities and enhancements are used for their intended purpose. Capitalized software costs are amortized over its useful life. Estimated useful life of software development activities are reviewed annually or whenever events or changes in circumstances indicate that intangible assets may be impaired and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades or enhancements to the existing functionality. Business Combinations The Company accounts for its business combinations under the provisions of ASC 805-10, Business Combinations (“ASC 805-10”), which requires that the acquisition method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including noncontrolling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: (1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or (2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. For transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. F-17 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The estimated fair value of net assets to be acquired, including the allocation of the fair value to identifiable assets and liabilities, is determined using established valuation techniques. Management uses assumptions based on historical knowledge of the business and projected financial information of the target. These assumptions may vary based on future events, perceptions of different market participants and other factors outside the control of management, and such variations may be significant to estimated values. Impairment of Long-Lived Assets The Company evaluates the recoverability of the recorded amount of long-lived assets, primarily property and equipment and finite-lived intangible assets, whenever events or changes in circumstance indicate that the recorded amount of an asset may not be fully recoverable. An impairment is assessed when the undiscounted expected future cash flows derived from an asset are less than its carrying amount. If an asset is determined to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Assets targeted for disposal are reported at the lower of the carrying amount or fair value less cost to sell. Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the total purchase consideration over the fair value of the identifiable assets acquired and liabilities assumed in a business combination. Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment at the reporting unit level annually on December 31 or more frequently if events or changes in circumstances indicate that it is more likely than not to be impaired. These events include: (i) severe adverse industry or economic trends; (ii) significant company-specific actions, including exiting an activity in conjunction with restructuring of operations; (iii) current, historical or projected deterioration of the Company’s financial performance; or (iv) a sustained decrease in the Company’s market capitalization, as indicated by its publicly quoted share price, below its net book value. In 2022, the Company reassigned all the assets at Ambulnz Health, LLC (“Health”) to assets held for sale as a result of an assignment for the benefit of creditors (“ABC”) (see Note 5). The Company also recognized a non-cash charge of $ 2,921,958 for Goodwill impairment for the year ended December 31, 2022 in the Consolidated Statements of Operations and Comprehensive Income. Line of Credit The costs associated with the Company’s line of credit are deferred and recognized over the term of the line of credit as interest expense. Derivative Warrant Liabilities The Company does not use derivative instruments to hedge exposures to interest rate, market or foreign currency risks. The Company evaluates its financial instruments to determine if such instruments contain features that qualify as embedded derivatives. Related Party Transactions The Company defines related parties as affiliates of the company, entities for which investments are accounted for by the equity method, trusts for the benefit of employees, principal owners (beneficial owners of more than 10 % of the voting interest), management, and members of immediate families of principal owners or management, other parties with which the Company may deal with if one party controls or can significantly influence management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Related party transactions are recorded within operating expenses in the Consolidated Statements of Operations and Comprehensive Income. For details regarding the related party transactions that occurred during the years ended December 31, 2023, 2022 and 2021 refer to Note 17. Revenue Recognition On January 1, 2019, the Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”). F-18 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) To determine revenue recognition for contractual arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify each contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when (or as) the relevant performance obligation is satisfied. The Company only applies the five-step model to contracts when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services the Company provides to the customer. The Company generates revenues from the provision of (1) Mobile Health Services and (2) Transportation Services. Since the customer simultaneously receives and consumes the benefits provided by the Company as the performance obligations are fulfilled, the Company satisfies performance obligations 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. The Company estimates contractual allowances at the time of billing based on contractual terms, historical collections or other arrangements. All transaction prices are fixed and determinable, which includes a fixed base rate, fixed mileage rate and an evaluation of historical collections by each payor. Nature of Our Services Revenue is primarily derived from: i. Mobile Health Services : These services include a wide variety of healthcare services performed at homes, offices and other locations and event services such as on-site healthcare support at sporting events and concerts. This segment also provides total care management solutions to large, typically underserved population groups, primarily through arrangements with municipalities, which include healthcare services as well as ancillary services, such as shelter. ii. Transportation Services : These services encompass both emergency response and non-emergency transport services. Non-emergency transport services include ambulance transports and wheelchair transports. Net revenue from Transportation Services is derived from the transportation of patients based on billings to third party payors and healthcare facilities. For Mobile Health Services, the performance of the services and any related support activities in the majority of the Company’s contracts are a single performance obligation under ASC 606. Mobile Health Services are typically billed based on a fixed rate (i.e., time and materials separately or combined) fee structure taking into consideration staff and materials utilized. The Company concluded that Transportation Services and any related support activities are a single performance obligation under ASC 606. The transaction price is determined by the fixed rate usage-based fees or fixed fees which are agreed upon in the Company’s executed contracts. As the performance associated with such services is known and quantifiable at the end of a period in which the services occurred (i.e., monthly or quarterly), revenues are typically recognized in the respective period performed. The typical billing cycle for Mobile Health Services and Transportation Services is same day to five days with payments generally due within 30 days. For large municipal customers in the Mobile Health Services segment, invoices are generally produced on a monthly basis, in arrears, and are generally due within 30-60 days of when they are submitted to the customer. For Transportation Services, the Company estimates the amount unbilled at month end and recognizes such amounts as revenue, based on available data and customer history. The majority of the Company’s Mobile Health Services and Transportation Services each represent a single performance obligation. Therefore, allocation is not necessary as the transaction price (fees) for the services provided is standard and explicitly stated in the contractual fee schedule and/or invoice. For contracts with multiple distinct performance obligations, the Company allocates the transaction price based on their agreed-upon price to the individually identified performance obligations in the contract. The Company monitors and evaluates all contracts on a case-by-case basis to determine if multiple performance obligations are present in a contractual arrangement. For Mobile Health Services, the customer also generally simultaneously receives and consumes the benefits provided by the Company as the performance obligations are fulfilled. Therefore, the Company satisfies performance obligations at the same time. For certain Mobile Health Services that have a fixed fee arrangement and are provided over time, revenue is recognized over time as the services are provided to the customer. For Transportation Services, since the customer F-19 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) simultaneously receives and consumes the benefits provided by the Company as the performance obligations are fulfilled, the Company satisfies performance obligations at the same time. For Transportation Services, where the customer pays fixed rate usage-based fees, the actual usage in the period represents the best measure of progress. In the following table, revenue is disaggregated as follows: Revenue Breakdown Year ended December 31, 2023 2022 2021 Primary Geographical Markets United States $ 571,887,943 $ 419,578,082 $ 309,218,594 United Kingdom 52,400,699 20,937,664 9,499,986 Total revenue $ 624,288,642 $ 440,515,746 $ 318,718,580 Major Segments/Service Lines Mobile Health Services $ 442,793,537 $ 325,891,440 $ 234,449,763 Transportation Services 181,495,105 114,624,306 84,268,817 Total revenue $ 624,288,642 $ 440,515,746 $ 318,718,580 Stock Based Compensation The Company maintained stock incentive plans under which incentive and non-qualified stock options, restricted stock units and performance-based stock units. The Company accounts for stock-based compensation using the provisions of ASC 718, Stock-Based Compensation , which requires the recognition of the fair value of stock-based compensation. The Company expenses stock-based compensation over the requisite service period based on the estimated grant-date fair value of the awards. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model, and the assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. The Company accounts for forfeitures as they occur. For performance-based awards, expense is recognized over the period from the grant date to the estimated attainment date, which is the derived service period of the award, if the management determines that it is probable that the performance-based vesting conditions will be achieved. All stock-based compensation costs are recorded in operating expenses in the Consolidated Statements of Operations and Comprehensive Income. Earnings per Share Earnings per share represents the net income attributable to stockholders divided by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock during the reporting periods. Potential dilutive Common Stock equivalents consist of the incremental shares of Common Stock issuable upon exercise of warrants and the incremental shares issuable upon exercise of stock options. In reporting periods in which the Company has a net loss, the effect is considered anti-dilutive and excluded from the diluted earnings per share calculation. F-20 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Year Ended December 31, 2023 2022 2021 Net income attributable to stockholders of DocGo Inc. and Subsidiaries 6,858,455 34,584,498 23,743,758 Weighted-average shares - basic 103,511,299 101,228,369 80,293,959 Effect of dilutive options 2,106,518 1,747,462 14,569,654 Weighted-average shares - dilutive 105,617,817 102,975,831 94,863,613 Net income per share attributable to DocGo Inc. and Subsidiaries - Basic 0.07 0.34 0.30 Net income per share attributable to DocGo Inc. and Subsidiaries - Diluted 0.06 0.34 0.25 Anti-dilutive employee share-based awards excluded 10,638,371 9,000,750 — Equity Method Investment The Company uses the equity method to account for investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee but does not exercise control. The Company’s judgment regarding its level of influence over an equity method investee includes considering key factors, such as ownership interest, representation on the board of directors and participation in policy-making decisions. Under the equity method, the Company’s investment is initially measured at cost and subsequently increased or decreased to recognize the Company’s share of income and losses of the investee, capital contributions and distributions and impairment losses. The Company performs a qualitative assessment annually and recognizes an impairment if there are sufficient indicators that the fair value of the investment is less than carrying value. On October 26, 2021, the Company acquired a 50 % interest in RND Health Services Inc. (“RND”) for $ 655,876 . During the year ended December 31, 2023, the Company made an additional investment amounting to $ 298,932 . The Company’s carrying value in RND, an equity method investee, is reflected in the caption “Equity method investments” in the Condensed Consolidated Balance Sheets. Changes in value of RND are recorded in “(Loss) gain on equity method investments” on the accompanying Consolidated Statements of Operations and Comprehensive Income. On November 1, 2021, the Company acquired a 20 % interest in National Providers Association, LLC (“NPA”) for $ 30,000 . Effective December 21, 2021, three members withdrew from NPA, resulting in the remaining two members obtaining the remaining ownership percentage. As of December 31, 2023 and December 31, 2022, the Company owned 50 % of NPA. The Company’s carrying value in NPA, an equity method investee, is reflected in the caption “Equity method investments” in the accompanying Consolidated Balance Sheets. Changes in value of NPA are recorded in “(Loss) gain on equity method investments” in the Consolidated Statements of Operations and Comprehensive Income. Leases The Company categorizes leases at their inception as either operating or finance leases based on the criteria in ASC 842, Leases (“ASC 842”). The Company adopted ASC 842 on January 1, 2019, using the modified retrospective approach, and has established a right-of-use asset and a current and non-current lease liability for each lease arrangement identified. The lease liability is recorded at the present value of future lease payments discounted using the discount rate that approximates the Company’s incremental borrowing rate for the lease established at the commencement date, and the right-of-use asset is measured as the lease liability plus any initial direct costs, less any lease incentives received before commencement. The Company recognizes a single lease cost, so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis. The Company has lease arrangements for vehicles, equipment and facilities. These leases typically have original terms not exceeding 10 years and in some cases contain multi-year renewal options, none of which are reasonably certain of exercise. The Company’s lease arrangements may contain both lease and non-lease components. The Company has elected to combine and account for lease and non-lease components as a single lease component. The Company has incorporated residual value obligations in leases for which there are such occurrences. Regarding short-term leases, ASC 842-10-25-2 F-21 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) permits an entity to make a policy election not to apply the recognition requirements of ASC 842 to short-term leases. The Company has elected not to apply the ASC 842 recognition criteria to any leases that qualify as short-term leases. Income Taxes Income taxes are recorded in accordance with ASC 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or its tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense. Recently Issued Accounting Standards In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”), which eliminates accounting guidance for troubled debt restructurings by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors , while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. ASU 2022-02 also requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost . ASU 2022-02 only affects entities that have already adopted ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), which is effective for fiscal years beginning after December 15, 2022. The Company adopted ASU 2022-02 on January 1, 2023, which did not have a material impact on the Company’s Consolidated Financial Statements. Recently Issued Accounting Standards Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure . The ASU updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. The ASU is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the impact of adopting this ASU on its disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the impact of adopting this ASU on its disclosures. F-22 3. Property and Equipment, net Property and equipment, net as of December 31, 2023 and 2022 are as follows: December 31, 2023 December 31, 2022 Transportation equipment $ 17,438,072 $ 20,773,862 Medical equipment 7,104,161 5,177,520 Office equipment and furniture 3,701,657 2,686,065 Leasehold improvements 709,619 579,658 Buildings 527,283 527,283 Land 37,800 37,800 29,518,592 29,782,188 Less: Accumulated depreciation ( 12,683,108 ) ( 8,524,013 ) Property and equipment, net $ 16,835,484 $ 21,258,175 During the year ended December 31, 2023, the Company disposed of assets with a cost of $ 12,343,547 and accumulated depreciation of $ 10,743,915 for proceeds of $ 747,088 . The Company recorded a loss on disposal of assets of $ 852,544 . During the year ended December 31, 2022, the Company disposed of assets with a cost of $ 50,353 and accumulated depreciation of $ 26,180 for proceeds of $ 3,000 . The Company recorded a loss on disposal of assets of $ 21,173 . During the year ended December 31, 2021, the Company disposed of assets with a cost of $ 119,026 and accumulated depreciation of $ 9,944 for proceeds of $ 74,740 . The Company recorded a loss on disposal of assets of $ 34,342 . The Company recorded depreciation expenses of $ 4,829,780 , $ 4,114,346 and $ 2,312,437 as of December 31, 2023, 2022 and 2021, respectively. 4. Acquisitions Government Medical Services, LLC On July 6, 2022, Holdings acquired 100 % of the outstanding shares of common stock of GMS, a provider of medical services. The aggregate purchase price consisted of $ 20,338,789 in cash consideration. Holdings also agreed to pay GMS an additional $ 3,000,000 upon GMS meeting certain performance conditions within a year of the closing date of such acquisition. Acquisition costs are included in general and administrative expenses and totaled $ 1,001,883 for the year ended December 31, 2022. During the year ended December 31, 2023, the Company made a $ 3,000,000 payment to settle the contingent liability balance. As of December 31, 2023 and 2022, there was a due to seller balance of $ 0 and $ 3,000,000 , respectively. Exceptional Medical Transportation, LLC On July 13, 2022, the Company acquired 100 % of the outstanding shares of common stock of Exceptional, a provider of medical transportation services, in exchange for $ 13,708,333 consisting of $ 7,708,333 in cash at closing and $ 6,000,000 payable over a 24 month period following the closing date of the acquisition. The Company also agreed to pay up to $ 2,000,000 in contingent consideration upon meeting certain performance conditions within two years of the closing date of such acquisition. Acquisition costs are included in general and administrative expenses totaled $ 56,571 for the year ended December 31, 2022. During the year ended December 31, 2023, the Company recorded a change in contingent consideration in the amount of $ 374,044 . During the year ended December 31, 2023, the Company made a payment for the first installment due on the F-23 contingent liability in the amount of $ 426,655 . The estimated contingent consideration amount payable for Exceptional was $ 279,301 and $ 1,080,000 as of December 31, 2023 and 2022, respectively. Additionally, the Company paid $ 3,000,000 of the $ 6,000,000 remaining purchase price payable as of December 31, 2023. As of December 31, 2023 and 2022, there was a due to seller balance of $ 3,000,000 and $ 6,000,000 , respectively. Ryan Brothers Fort Atkinson, LLC On August 9, 2022, the Company acquired 100 % of the outstanding shares of common stock of Ryan Brothers, a provider of medical transportation services, in exchange for an aggregate purchase price of $ 11,422,252 consisting of $ 7,422,252 in cash at closing and an estimated $ 4,000,000 in contingent consideration to be paid out over 24 months, commencing on August 1, 2022, based on performance of certain obligations. Acquisition costs are included in general and administrative expenses and totaled $ 230,175 for the year ended December 31, 2022. During the year ended December 31, 2023, the Company recorded a change in contingent consideration in the amount of $ 338,956 . During the year ended December 31, 2023, the Company made a payment for the first installment due on the contingent liability in the amount of $ 1,840,026 . The estimated contingent consideration amount payable for Ryan Brothers was $ 1,821,018 and $ 4,000,000 as of December 31, 2023 and 2022, respectively. Community Ambulance Service Ltd On October 12, 2022, Holdings, through its indirect wholly owned subsidiary Ambulnz U.K. Ltd. (“UK Ltd.”), acquired Community Ambulance Service Ltd (“CAS”), a provider of emergency and non-emergency transport services, including high dependency, urgent care, mental health and blue light transport services, and diagnostics testing in the U.K. The aggregate purchase price consisted of approximately $ 5,541,269 in cash. The net assets acquired through the CAS acquisition was $ 7,134,881 mainly from the vehicles with high fair market value, which directly lead to a gain on bargain purchase amounting to $ 1,593,612 . The Company expects this acquisition to help increase the Company’s presence in the U.K. market and help provide improved access to municipal contracts. Acquisition costs are included in general and administrative expenses totaling $ 171,779  for the year ended December 31, 2022. Location Medical Services, LLC On December 9, 2022, Holdings, through UK Ltd., acquired 100 % of the outstanding shares of common stock of LMS. The aggregate purchase price consisted of $ 302,450 in cash consideration. The Company also agreed to pay LMS an additional $ 11,279,201 in deferred consideration and an estimated $ 2,475,540 in contingent consideration upon LMS meeting certain performance conditions in 2023. Acquisition costs are included in general and administrative expenses and totaled $ 4,200 for the year ended December 31, 2022. During the year ended December 31, 2023, the Company recorded a change in contingent consideration in the amount of $ 2,000,312 and recorded $ 129,599 in foreign exchange movement. The estimated contingent consideration amount payable for LMS was $ 604,827 and $ 2,475,540 as of December 31, 2023 and 2022, respectively. Additionally, the Company paid $ 11,279,201 of deferred consideration to LMS during the year ended December 31, 2023. As of December 31, 2023 and 2022, there was a due to seller balance of $ 0 and $ 11,279,201 , respectively. Cardiac RMS, LLC On March 31, 2023, Holdings acquired 51 % of the outstanding shares of common stock of CRMS, a provider of cardiac implantable electronic device remote monitoring and virtual care management services. The closing consideration of $ 10,000,000 consisted of $ 9,000,000 in cash and $ 1,000,000 worth of shares of Common Stock issued in a private placement transaction. A further probable consideration of $ 15,822,190 is to be paid out over 36 months following the closing of the transaction for the remaining 49 % equity of CRMS, based on CRMS’ attainment of full-year EBITDA targets. $ 5,000,000 of such further probable consideration is to be paid in cash and the remaining $ 10,822,190 is to be paid in shares of Common Stock. Acquisition costs are included in general and administrative expenses and totaled $ 229,937 for the year ended December 31, 2023. F-24 During the year ended December 31, 2023, the Company recorded a change in contingent consideration in the amount of $ 1,265,645 . As of December 31, 2023, there was a remaining contingent liability balance of $ 17,087,835 . Ambulnz-FMC North America LLC On April 1, 2023, the Company acquired the remaining outstanding shares of common stock of Ambulnz-FMC North America LLC (“FMC NA”), a prominent healthcare company that focuses on providing vital products and services for patients suffering from kidney diseases and renal failure, from its joint venture with Holdings in exchange for $ 4,000,000 in cash and $ 3,000,000 in Common Stock. Acquisition costs are included in general and administrative expenses totaling approximately $ 35,560 for the year ended December 31, 2023. Healthworx LLC On May 10, 2023, the Company acquired the remaining outstanding shares of common stock of Healthworx LLC (“Healthworx”), a provider of management, administration and support services to service providers focused on medical testing and diagnostic screening, from its joint venture with Rapid Reliable Testing, LLC (“RRT”) in exchange for $ 1,385,156 in cash. F-25 The following table presents the assets acquired and liabilities assumed at the date of the acquisitions: FMC NA CRMS LMS CAS Ryan Brothers Exceptional GMS Total Consideration: Cash consideration $ 4,000,000 $ 9,000,000 $ 302,450 $ 5,541,269 $ 7,422,252 $ 6,375,000 $ 20,338,789 $ 52,979,760 Stock consideration 3,000,000 1,000,000 4,000,000 Due to seller — — 11,279,201 — — 6,000,000 — 17,279,201 Amounts held under an escrow account — — — — — 1,333,333 — 1,333,333 Contingent liability — 15,822,190 2,475,540 — 4,000,000 1,080,000 3,000,000 26,377,730 Total consideration $ 7,000,000 $ 25,822,190 $ 14,057,191 $ 5,541,269 $ 11,422,252 $ 14,788,333 $ 23,338,789 $ 101,970,024 Recognized amounts of identifiable assets acquired and liabilities assumed Cash $ — $ 1,574,604 $ 5,404,660 $ 892,218 $ 620,548 $ 299,050 $ 1,005,453 $ 9,796,533 Accounts receivable — 2,033,533 623,635 7,002,325 5,844,494 3,785,490 3,975,160 23,264,637 Other current assets — 293,478 134,216 1,167,326 136,157 — 30,734 1,761,911 Property, plant and equipment — — 519,391 4,548,956 2,125,134 2,450,900 4,092 9,648,473 Intangible assets — 15,930,000 2,419,600 — 387,550 125,000 10,305,000 29,167,150 Total identifiable assets acquired — 19,831,615 9,101,502 13,610,825 9,113,883 6,660,440 15,320,439 73,638,704 Accounts payable — 28,978 40,447 2,036,714 44,911 — 137,239 2,288,289 Due to seller — 2,448,460 — — 5,844,494 4,084,540 — 12,377,494 Other current liabilities — 174,177 1,012,992 4,439,230 286,792 — 562,809 6,476,000 Total liabilities assumed — 2,651,615 1,053,439 6,475,944 6,176,197 4,084,540 700,048 21,141,783 Noncontrolling interests 2,567,037 — — — — — — 2,567,037 Goodwill — 8,642,190 6,009,128 ( 1,593,612 ) 8,484,566 12,212,433 8,718,398 42,473,103 Additional paid-in-capital 4,432,963 — — — — — — 4,432,963 Total purchase price $ 7,000,000 $ 25,822,190 $ 14,057,191 $ 5,541,269 $ 11,422,252 $ 14,788,333 $ 23,338,789 $ 101,970,024 Pro Forma Disclosures The following unaudited pro forma combined financial information for the fiscal years ended December 31, 2023, 2022 and 2021 gives effect to the acquisitions disclosed above as if they had occurred on January 1, 2021. The pro forma F-26 information is not necessarily indicative of the results of operations that actually would have occurred under the ownership and management of the Company. 2023 2022 2021 Revenue $ 627,402,261 $ 539,522,587 $ 461,001,227 Net Income 11,087,122 46,960,359 43,763,036 The unaudited pro forma combined financial information presented above includes the accounting effects of the acquisitions, including, to the extent applicable, amortization charges from acquired intangible assets; depreciation of property, plant and equipment that have been revalued; transaction costs; interest expense; and the related tax effects. 5. ABC Transaction and Held for Sale During the year 2022, the Company started discussions regarding the potential liquidation process of Health through an ABC, with a targeted timeline for the transaction to be fully closed by December 31, 2022. The conversation involved operations, human resources, external legal counsel and the Assignee, Amb, LLC (a California limited liability company). Due to operational processes, the filing was extended and finalized on February 3, 2023. An ABC is a liquidation process governed by state law (California law in this instance) that is an alternative to a bankruptcy case under federal law. Prior to commencing the ABC, Health ceased business operations and all of its employees were terminated and treated in accordance with California law. In the ABC, all of Health’s assets were transferred to the Assignee, who acts as a fiduciary for creditors and in a capacity equivalent to that of a bankruptcy trustee. The Assignee is responsible for liquidating the assets. Similar to a bankruptcy case, there is a claims process. Creditors of Health received notice of the ABC and a proof of claim form and were required to submit a proof of claim in order to participate in distribution of net liquidation proceeds by the Assignee. As of December 31, 2022, Health met the criteria to be classified as held for sale. As the entity has met this criteria, the Company is required to record the respective assets and liabilities at the lower of carrying value or fair value, less any costs to sell, and present the related assets and liabilities as separate line items in the Consolidated Balance Sheets. F-27 The following table presents information related to the major classes of assets and liabilities that were classified as held for sale in the Company’s Consolidated Balance Sheets as of December 31, 2022 and December 31, 2023: Pre ABC Adjustment 2022 Adjustments December 31, YTD 2023 Adjustments December 31, 2022 2023 ASSETS Current assets: Cash and cash equivalents $ ( 190,312 ) $ 190,312 $ — $ — $ — Accounts receivable, net 1,219,927 ( 1,219,927 ) — — — Prepaid expenses and other current assets 22,850 ( 22,850 ) — — — Total current assets 1,052,465 ( 1,052,465 ) — — — Property and equipment, net 1,107,279 ( 1,107,279 ) — — — Intangibles, net 30,697 ( 30,697 ) — — — Goodwill 5,085,689 ( 5,085,689 ) — — — Operating lease right-of-use assets 29,753 ( 29,753 ) — — — Assets held for sale — 4,480,344 4,480,344 ( 4,480,344 ) — Other assets 18,053,495 ( 96,419 ) 17,957,076 ( 17,957,076 ) — Total assets $ 25,359,378 $ ( 2,921,958 ) $ 22,437,420 $ ( 22,437,420 ) $ — LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 196,122 $ ( 196,122 ) $ — $ — $ — Accrued liabilities 63,655,442 ( 4,250,603 ) 59,404,839 ( 59,404,839 ) — Operating lease liability, current 33,619 ( 33,619 ) — — — Liabilities held for sale — 4,480,344 4,480,344 ( 4,480,344 ) — Total current liabilities 63,885,183 — 63,885,183 ( 63,885,183 ) — Total liabilities $ 63,885,183 $ — $ 63,885,183 $ ( 63,885,183 ) $ — Stockholders' equity: Accumulated deficit $ ( 38,525,805 ) $ ( 2,921,958 ) $ ( 41,447,763 ) $ 41,447,763 $ — Total stockholders’ equity attributable to DocGo Inc. and Subsidiaries ( 38,525,805 ) ( 2,921,958 ) ( 41,447,763 ) 41,447,763 — Noncontrolling interests — — — — — Total stockholders’ equity $ ( 38,525,805 ) $ ( 2,921,958 ) $ ( 41,447,763 ) $ 41,447,763 $ — Total liabilities and stockholders’ equity $ 25,359,378 $ ( 2,921,958 ) $ 22,437,420 $ ( 22,437,420 ) $ — The intercompany receivables and intercompany payables are eliminated in the Company’s Consolidated Balance Sheets. F-28 6. G oodwill In connection with the ABC, the Company evaluated its goodwill balances as of December 31, 2022 and determined that there was an impairment of goodwill related to its Health reporting unit. The impairment was primarily due to the ABC filing. As a result of this impairment, the Company recognized a non-cash charge of $ 2,921,958 in the year ended December 31, 2022 in the Consolidated Statements of Operations and Comprehensive Income. The charge was recorded as part of other income in the Company’s Consolidated Statements of Operations and Comprehensive Income and has no impact on its cash flow, liquidity or compliance with debt covenants. Additionally, the Company recorded an aggregate of $ 8,642,190 and $ 35,299,136 in goodwill in connection with its acquisitions in the year ended December 31, 2023 and December 31, 2022, respectively. The Company also updated the carrying value of the goodwill in its Condensed Consolidated Balance Sheets to reflect the additional goodwill. The carrying value of goodwill amounted to $ 47,539,929 as of December 31, 2023. The changes in the carrying value of goodwill for the year ended December 31, 2023 are as noted in the table below: Carrying Value Balance as of December 31, 2021 $ 8,686,966 Goodwill acquired during the period 35,299,136 Impairment recognized during the year ( 2,921,958 ) Reassignment of Goodwill to Assets held for sale ( 2,163,731 ) Balance as of December 31, 2022 $ 38,900,413 Goodwill acquired during the period 8,642,190 Currency translation adjustment and others ( 2,674 ) Balance as of December 31, 2023 $ 47,539,929 7. Intangibles Intangible assets consisted of the following as of December 31, 2023 and December 31, 2022: December 31, 2023 Estimated Useful Life (Years) Gross Carrying Amount Additions Accumulated Amortization Net Carrying Amount Patents 15 years $ 62,823 $ 20,961 $ ( 15,592 ) $ 68,192 Computer software 5 years 247,828 — ( 235,967 ) 11,861 Operating licenses Indefinite 8,799,004 600,000 — 9,399,004 Internally developed software 4 - 5 years 8,284,058 1,794,029 ( 8,821,563 ) 1,256,524 Material contracts Indefinite 62,550 — — 62,550 Customer relationships 8 - 9 years 12,397,954 15,939,570 ( 3,334,925 ) 25,002,599 Trademark 8 years 326,646 17,101 ( 46,549 ) 297,198 Non-compete agreements 5 years — 100,000 ( 15,000 ) 85,000 Trade credits 5 years — 1,500,000 — 1,500,000 $ 30,180,863 $ 19,971,661 $ ( 12,469,596 ) $ 37,682,928 F-29 December 31, 2022 Estimated Useful Life (Years) Gross Carrying Amount Additions Accumulated Amortization Net Carrying Amount Patents 15 years $ 48,668 $ 14,155 $ ( 10,116 ) $ 52,707 Computer software 5 years 294,147 ( 46,319 ) ( 224,886 ) 22,942 Operating licenses Indefinite 8,375,514 423,490 — 8,799,004 Internally developed software 4 - 5 years 6,013,513 2,270,545 ( 6,378,911 ) 1,905,147 Material contracts Indefinite — 62,550 — 62,550 Customer relationships 8 - 9 years — 12,397,954 ( 594,301 ) 11,803,653 Trademark 8 years — 326,646 ( 3,403 ) 323,243 $ 14,731,842 $ 15,449,021 $ ( 7,211,617 ) $ 22,969,246 The intangible assets include an immaterial foreign currency translation adjustment in the amount of $ 8,621 . Intangible asset balances are translated into U.S. dollars using exchange rates in effect at period end, and adjustments related to foreign currency translation are included in other comprehensive income. The Company recorded amortization expense of $ 5,249,358 , $ 3,214,814 and $ 1,845,193 for the periods ended December 31, 2023, 2022 and 2021, respectively. Future amortization expense at December 31, 2023 for the next five years and in the aggregate are as follows: Amortization Expense 2024 $ 3,905,132 2025 3,855,130 2026 3,249,936 2027 3,249,222 2028 3,232,758 Thereafter 9,229,196 Total $ 26,721,374 8. Accrued Liabilities Accrued liabilities consisted of the following at the dates indicated: December 31, 2023 December 31, 2022 Accrued subcontractors $ 37,858,755 $ 8,101,150 Accrued general expenses 27,001,232 11,436,462 Accrued workers' compensation and other insurance liabilities 12,881,902 3,766,469 Accrued payroll 6,464,192 4,245,838 Accrued bonus 4,784,005 1,500,717 Other current liabilities 2,350,523 2,522,395 Total accrued liabilities $ 91,340,609 $ 31,573,031 F-30 9. Line of Credit On November 1, 2022, the Company entered into a credit agreement (the “Credit Agreement”) with two banks, with one bank in the capacity as a lender and the administrative agent (collectively with the other lender, the “Lenders”). The Credit Agreement provides for a revolving credit facility in the initial aggregate principal amount of $ 90,000,000 (the “Revolving Facility”). The Revolving Facility includes the ability for the Company to request an increase to the commitment by an additional amount of up to $ 50,000,000 , though no Lender (nor the Lenders collectively) is obligated to increase its respective commitments. Borrowings under the Revolving Facility bear interest at a per annum rate equal to: (i) at the Company’s option, (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin. The applicable margins are based on the Company’s consolidated net leverage ratio, adjusted on a quarterly basis. The initial applicable margins are 1.25 % for an adjusted term SOFR loan and 0.25 % for a base rate loan and will be updated based on the Company's consolidated net leverage ratio. The Revolving Facility matures on the five-year anniversary of the closing date, November 1, 2027. The Revolving Facility is secured by a first-priority lien on substantially all of the Company’s present and future personal assets and intangible assets. The Revolving Facility is subject to certain financial covenants such as a net leverage ratio and interest coverage ratio, as defined in the Credit Agreement. On October 19, 2023, the Company drew down $ 25,000,000 under the Revolving Facility. As of December 31, 2023, the outstanding balance of the line of credit under the Revolving Facility was $ 25,000,000 . The unused line of credit under the Revolving Facility was $ 65,000,000 as of December 31, 2023. The Company incurred $ 359,330 in interest charges relating to its line of credit during 2023, which is reflected in interest income (expense) on the Company's Consolidated Statements of Operations and Comprehensive Income. 10. Notes Payable The Company has various loans with finance companies with monthly installments aggregating $ 3,784 , inclusive of interest ranging from 2.5 % through 7.5 %. The notes mature at various times through 2026 and are secured by transportation equipment. The following table summarizes the Company’s notes payable: December 31, 2023 December 31, 2022 Equipment and financing loans payable, between 2.5 % and 7.5 % interest and maturing between March 2024 and August 2026 $ 69,717 $ 1,901,514 Total notes payable 69,717 1,901,514 Less: current portion of notes payable 28,131 664,913 Total non-current portion of notes payable $ 41,586 $ 1,236,601 Interest expenses were $( 201,883 ), $ 117,664 and $ 61,324 for the periods ended December 31, 2023, 2022 and 2021, respectively. Future minimum annual maturities of notes payable as of December 31, 2023 are as follows: Notes Payable 2024 $ 28,755 2025 25,847 2026 15,115 Total maturities 69,717 Current portion of notes payable ( 28,131 ) Long-term portion of notes payable $ 41,586 F-31 11. Derivative Warrant Liabilities For the year ended December 31, 2021, the Company determined the fair value of its warrants that were previously publicly traded in active markets (“Public Warrants’) using quoted market prices for identical instruments. Accordingly, the Public Warrants were classified as Level 1 financial instruments. As of December 31, 2021, there were 3,833,333 Public Warrants outstanding at a fair value of $ 8.1 million. Because the transfer of the Company’s warrants that were issued in a private placement simultaneously with the closing of its initial public offering (“Private Warrants” and together with the Public Warrants, the “warrants”) to anyone outside of a small group of individuals constituting the sponsors of the Company would result in the Private Warrants having substantially the same terms as the Public Warrants, management determined that the fair value of each Private Warrant was the same as that of a Public Warrant, with an insignificant adjustment for marketability restrictions. Accordingly, the Private Warrants were classified as Level 1 financial instruments. As of December 31, 2021, 2,533,333 Private Warrants remained outstanding at a fair value of $ 5.4 million. Due to fair value changes throughout the year ended December 31, 2021, we recorded a gain on remeasurement of warrant liabilities of $ 5.2 million. For the year ended December 31, 2022, the Company recorded a gain of approximately $ 1.1 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 period. On August 15, 2022, the Company announced the redemption of all of its outstanding warrants under the Warrant Agreement, dated as of October 14, 2020, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, on the redemption date of September 16, 2022 (the “Redemption Date”). Warrants surrendered for exercise on a cashless basis resulted in the issuance of 1,406,371 shares of Common Stock. A total of 68,514 warrants were not surrendered on the Redemption Date and were redeemed for $ 0.10 per warrant. There were no warrants liabilities outstanding for the years ended December 31, 2023 and 2022. 12. Business Segment Information The Company conducts business in three operating segments: Mobile Health Services, Transportation Services, and Corporate. In accordance with ASC 280, Segment Reporting , operating segments are components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, the Company’s Chief Executive Officer and Chief Financial Officer, in deciding how to allocate resources and assessing performance. Prior to 2023, the Company reported in two segments because the Company’s entities have two main revenue streams. Beginning with the first quarter of 2023, the Company began reporting in three operating segments, adding a Corporate segment to allow for analysis of shared services and personnel that support both the Transportation Services and Mobile Health Services segments. Previously, these costs had been allocated almost entirely to the Transportation Services segment. All of the Company’s revenues and costs of revenues continue to be reported within the Transportation Services and Mobile Health Services segments. The Corporate segment contains operating expenses such as information technology costs, certain insurance costs and the compensation costs of senior and executive leadership. The segment reporting for the prior-year period has been adjusted to conform to the new methodology, for the purposes of allowing a clearer analysis of year-over-year performance. The Company’s Chief Executive Officer and Chief Financial Officer evaluate the Company’s financial information and resources and assesses the performance of these resources by revenue stream and by operating income or loss performance. The accounting policies of the segments are the same as the accounting policies of the Company as a whole. The Company evaluates the performance of its Mobile Health Services, Transportation Services, and Corporate segments based primarily on results of operations. F-32 Operating results for the business segments of the Company are as follows: Mobile Health Services Transportation Services Corporate Total Year Ended December 31, 2023 Revenues $ 442,793,537 $ 181,495,105 $ — $ 624,288,642 Income (loss) from operations 80,362,820 3,541,377 ( 68,849,217 ) 15,054,980 Total assets 280,646,925 132,178,214 77,626,818 490,451,957 Depreciation and amortization expense 4,226,657 9,393,895 2,811,340 16,431,892 Stock compensation 1,698,350 1,434,505 17,836,319 20,969,174 Long-lived assets 32,841,680 78,848,587 11,952,528 123,642,795 Capital expenditures 30,163,882 20,254,373 597,283 51,015,538 Year Ended December 31, 2022 Revenues $ 325,891,440 $ 114,624,306 $ — $ 440,515,746 Income (loss) from operations 92,710,163 ( 14,546,171 ) ( 56,332,364 ) 21,831,628 Total assets 116,821,500 118,627,613 157,828,515 393,277,628 Depreciation and amortization expense 1,685,114 6,050,265 2,830,199 10,565,578 Stock compensation 1,425,299 1,415,670 5,213,602 8,054,571 Long-lived assets 33,181,594 65,580,291 2,479,889 101,241,774 Capital expenditures 39,569,802 52,105,196 2,542,854 94,217,852 Year Ended December 31, 2021 Revenues $ 234,449,763 $ 84,268,817 $ — $ 318,718,580 Income (loss) from operations 59,605,712 ( 20,983,766 ) ( 23,264,648 ) 15,357,298 Total assets 61,503,278 59,299,426 188,799,948 309,602,652 Depreciation and amortization expense ( 888,355 ) 6,458,218 1,941,716 7,511,579 Stock compensation 536,910 479,542 359,901 1,376,353 Long-lived assets 4,382,704 38,370,683 2,848,312 45,601,699 Capital expenditures 4,180,004 10,636,454 3,766,289 18,582,747 Long-lived assets include property and equipment, goodwill, intangible assets, operating lease right-of-use assets and finance lease right-of-use assets. Geographic Information The following table summarizes long-lived assets by geographic location for the years ended December 31, 2023, 2022, and 2021: F-33 December 31, 2023 December 31, 2022 December 31, 2021 Primary Geographical Markets United States $ 103,779,506 $ 83,145,362 $ 42,166,999 United Kingdom 19,863,289 18,096,412 3,434,700 Total Long-Lived Assets $ 123,642,795 $ 101,241,774 $ 45,601,699 Revenues by geographic location are included in Note 2. 13. Equity Share Repurchase Program On May 24, 2022, the Company’s Board of Directors (the “Board of Directors”) authorized a share repurchase program to purchase up to $ 40 million of Common Stock (the “Program”). During the second and fourth quarter of 2022, the Company repurchased 536,839 shares of its Common Stock for $ 3,731,712 . These shares were subsequently cancelled. There were no shares repurchased during the year ended December 31, 2023. The Program did not oblige the Company to acquire any specific number of shares and expired on November 24, 2023. Under the Program, shares could be repurchased using a variety of methods, including privately negotiated and/or open market transactions, under plans complying with Rule 10b5-1 under the Exchange Act of 1934, as amended, as part of accelerated share repurchases, block trades and other methods. The timing, manner, price and amount of any Common Stock repurchases under the Program were determined by the Company in its discretion and depended on a variety of factors, including legal requirements, price and economic and market conditions. 14. Stock Based Compensation Stock Options In 2021, the Company established the DocGo Inc. 2021 Equity Incentive Plan (the “Plan”) replacing Ambulnz, Inc.’s 2017 Equity Incentive Plan. The Plan reserved 16,607,894 shares of Class A common stock for issuance under the Plan. The Company’s stock options generally vest on various terms based on continuous services over periods ranging from three to five years . The stock options are subject to time vesting requirements through 2033 and are nontransferable. Stock options granted have a maximum contractual term of 10 years. As of December 31, 2023, approximately 4.7 million employee stock options had vested. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Before the consummation of the Business Combination, management took the average of several publicly traded companies that were representative of the Company’s size and industry in order to estimate its expected stock volatility. Subsequent to the Business Combination, the Company utilized publicly available pricing. The expected term of the options represented the period of time the instruments were expected to be outstanding. The Company based the risk-free interest rate on the rate payable on the U.S. Treasury securities corresponding to the expected term of the awards at the date of grant. Expected dividend yield was zero based on the fact that the Company had not historically paid and does not intend to pay a dividend in the foreseeable future. The following assumptions were used to compute the fair value of the stock option grants during the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Risk-free interest rate 4.1 % - 4.9 % 0.71 % - 4.3 % Expected term (in years) 6.25 6.25 Volatility 52 % - 62 % 60 % - 69 % Dividend yield — % — % F-34 The following table summarizes the Company’s stock option activity under the Plan for the years ended December 31, 2022 and 2023: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Balance as of December 31, 2021 8,422,972 $ 6.21 8.77 $ 24,706,020 Granted/vested during the year 5,443,368 7.04 — — Exercised during the year ( 1,699,720 ) 2.03 — — Cancelled during the year ( 595,312 ) 8.28 — — Balance as of December 31, 2022 11,571,308 7.11 9.05 39,389,063 Granted/vested during the year 1,566,010 7.93 — — Exercised during the year ( 514,065 ) 3.55 — — Cancelled during the year ( 680,989 ) 7.52 — — Balance as of December 31, 2023 11,942,264 7.36 8.16 $ 50,315,593 Options vested and exercisable as of December 31, 2023 4,703,686 $ 7.02 7.47 $ 3,199,037 The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Common Stock price and the exercise price of the stock options. The weighted average grant date fair value per share for stock option grants during the years ended December 31, 2023 and 2022 was $ 7.93 and $ 7.04 , respectively. On December 31, 2023, 2022 and 2021, the total recorded stock-based compensation related to stock option awards granted was $ 11,795,320 , $ 6,232,992 , and $ 1,376,353 , respectively. On December 31, 2023, 2022 and 2021, the total unrecognized compensation related to unvested stock option awards granted was $ 29,058,756 , $ 41,666,564 and $ 20,792,804 , respectively, which the Company expects to recognize over a weighted-average period of approximately 1.79 years. Restricted Stock Units The fair value of restricted stock units (“RSUs”) is determined on the date of grant. The Company records compensation expenses in the Consolidated Statements of Operations and Comprehensive Income on a straight-line basis over the vesting period for RSUs. The vesting period for employees and members of the Board of Directors ranges from one to four years . F-35 Activity under RSUs for the year ended December 31, 2023 was as follows: RSUs Weighted- Average Grant Date Fair Value Per RSU Balance as of December 31, 2022 305,587 $ 8.35 Granted 3,104,766 6.15 Vested ( 986,258 ) 8.61 Forfeited — 0 Balance as of December 31, 2023 2,424,095 5.61 Vested and unissued as of December 31, 2023 49,490 5.47 Non-vested as of December 31, 2023 2,424,095 5.61 The total grant-date fair value of RSUs granted during the year ended December 31, 2023 was $ 19,526,515 . For the year ended December 31, 2023, the Company recorded stock-based compensation expense related to RSUs of $ 9,101,027 , of which $ 493,043 is included in accrued liabilities. For the year ended December 31, 2022, the Company recorded stock-based compensation expense related to RSUs of $ 1,821,579 , of which $ 375,000 is included in accrued liabilities. On December 31, 2023, and 2022, the total unrecognized compensation related to unvested RSUs granted was $ 12,602,662 , and $ 2,177,713 , respectively, which is expected to be recognized over a weighted-average period of approximately 2.5 years. Performance-based Stock Units The fair value of performance-based stock units (“PSUs”) is determined on the date of grant. The Company records compensation expenses in the Consolidated Statements of Operations and Comprehensive Income on a straight-line basis over the vesting period based on the grant date fair value of the awards and probability of the achievement of the specified performance target. The vesting period for employees and members of the Board of Directors ranges from one to four years . F-36 Activity under PSUs for the year ended December 31, 2023 was as follows: PSUs Weighted-Average Grant Date Fair Value Per PSU Balance as of December 31, 2022 — $ — Granted 1,085,270 5.16 Vested — — Forfeited — — Balance as of December 31, 2023 1,085,270 5.16 Vested and unissued as of December 31, 2023 — — Non-vested as of December 31, 2023 1,085,270 5.16 The total grant-date fair value of PSUs granted during the year ended December 31, 2023 was $ 5,599,993 . For the year ended December 31, 2023, the Company recorded stock-based compensation expense related to PSUs of $ 72,827 which is included in accrued liabilities. As of December 31, 2023, the Company had $ 5,527,166 in unrecognized compensation cost related to non-vested PSUs, which is expected to be recognized over a weighted-average period of approximately 4.0 years. 15. Leases Operating Leases The Company is obligated to make rental payments under non-cancellable operating leases for office, dispatch station space and transportation equipment, expiring at various dates through 2032. Under the terms of the leases, the Company is also obligated for its proportionate share of real estate taxes, insurance and maintenance costs of the property. The Company is required to hold certain funds in restricted cash and cash equivalents accounts under some of these agreements. Certain leases for property and transportation equipment contain options to purchase, extend or terminate the lease. Determining the lease term and amount of lease payments to include in the calculation of the right-of-use asset and lease obligations for leases containing options requires the use of judgment to determine whether the exercise of an option is reasonably certain and whether the optional period and payments should be included in the calculation of the associated right-of-use asset and lease obligation. In making the determination of such judgment, the Company considers all relevant economic factors that would require whether to exercise or not exercise the option. The Company’s lease agreements generally do not provide an implicit borrowing rate. Therefore, the Company used a benchmark approach to derive an appropriate imputed discount rate. The Company benchmarked itself against other companies of similar credit ratings and comparable quality and derived imputed rates, which were used to discount its real estate lease liabilities. The Company used estimated borrowing rates of 6 % on January 1, 2019 for all leases that commenced prior to that date for office spaces and transportation equipment. F-37 Lease Costs The table below comprises lease expenses for the years ended December 31, 2023, 2022 and 2021, respectively: December 31, Components of total lease cost: 2023 2022 2021 Operating lease expense $ 3,418,134 $ 2,294,636 $ 1,993,984 Short-term lease expense 1,678,487 1,201,622 1,012,260 Total lease cost - operating leases $ 5,096,621 $ 3,496,258 $ 3,006,244 Lease Position as of December 31, 2023 Right-of-use lease assets and lease liabilities for the Company’s operating leases were recorded in the Consolidated Balance Sheets as follows: December 31, 2023 December 31, 2022 Assets Lease right-of-use assets $ 9,580,535 $ 9,074,277 Total lease assets $ 9,580,535 $ 9,074,277 Liabilities Current liabilities: Lease liability - current portion $ 2,773,020 $ 2,325,024 Noncurrent liabilities: Lease liability, net of current portion 7,223,941 7,040,982 Total lease liability $ 9,996,961 $ 9,366,006 Lease Terms and Discount Rate Weighted average remaining lease term (in years) - operating leases 3.67 Weighted average discount rate - operating leases 5.71 % F-38 Undiscounted Cash Flows Future minimum lease payments under the operating leases as of December 31, 2023 are as follows: Operating Leases 2024 $ 3,271,821 2025 3,305,703 2026 2,429,393 2027 1,219,709 2028 597,566 Thereafter 318,901 Total future minimum lease payments 11,143,093 Less effects of discounting ( 1,146,132 ) Present value of future minimum lease payments $ 9,996,961 Operating lease expenses approximated $ 3,418,134 , $ 2,294,636 and $ 1,993,984 for the years ended December 31, 2023, 2022 and 2021, respectively. For the years ended December 31, 2023, 2022, 2021, the Company made $ 3,287,125 , $ 2,294,636 , $ 1,993,984 of fixed cash payments related to operating leases and $ 4,270,553 , $ 2,985,568 , $ 2,741,784 related to finance leases, respectively. Finance Leases The Company leases vehicles under non-cancelable finance lease agreements with a liability of $ 11,430,465 , $ 8,646,803 and $ 10,139,410 for the years ended December 31, 2023, 2022 and 2021, respectively (accumulated depreciation of $ 11,679,823 , $ 7,906,966 and $ 7,095,242 as of December 31, 2023, 2022 and 2021, respectively). Depreciation expenses for the vehicles under non-cancelable lease agreements amounted to $ 6,352,754 , $ 3,236,418 and $ 2,913,925 for the years ended December 31, 2023, 2022 and 2021, respectively. Gain on Lease Remeasurement In June 2022, the Company reassessed its finance lease estimates relating to vehicle mileage and residual value. As a result, the Company determined to purchase the vehicles at the end of the leases, which resulted in a gain of $ 1.4 million recorded as gains from lease accounting on the Consolidated Statements of Operations and Comprehensive Income. Lease Payments The table below comprises lease payments for the years ended December 31, 2023, 2022 and 2021, respectively: Year Ended December 31, Components of total lease cost: 2023 2022 2021 Finance lease payment $ 4,270,553 $ 2,985,568 $ 2,741,784 Short-term lease payment — — — Total lease payments $ 4,270,553 $ 2,985,568 $ 2,741,784 F-39 Lease Position as of December 31, 2023 Right-of-use lease assets and lease liabilities for the Company’s finance leases were recorded in the Consolidated Balance Sheets as follows: December 31, 2023 December 31, 2022 Assets Lease right-of-use assets $ 12,003,919 $ 9,039,663 Total lease assets $ 12,003,919 $ 9,039,663 Liabilities Current liabilities: Lease liability - current portion $ 3,534,073 $ 2,732,639 Noncurrent liabilities: Lease liability, net of current portion 7,896,392 5,914,164 Total lease liability $ 11,430,465 $ 8,646,803 Lease Terms and Discount Rate The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s finance leases as of December 31, 2023: Weighted average remaining lease term (in years) - finance leases 3.37 Weighted average discount rate - finance leases 5.42 % Undiscounted Cash Flows Future minimum lease payments under the finance leases as of December 31, 2023 are as follows: Finance Leases 2024 $ 4,072,021 2025 3,745,030 2026 2,868,368 2027 1,495,766 2028 352,811 Thereafter — Total future minimum lease payments 12,533,996 Less effects of discounting ( 1,103,531 ) Present value of future minimum lease payments $ 11,430,465 F-40 16. Other Income The Company recognized $ 1,238,313 , $ 950,264 and $ 4,437,887 of other income for the years ended December 31, 2023, 2022 and 2021, respectively, as follows: Year Ended December 31, Other Income 2023 2022 2021 Interest income (expense), net $ 1,684,399 $ 762,685 $ ( 763,030 ) Gain on remeasurement of warrant liabilities — 1,127,388 5,199,496 Change in fair value of contingent liability 1,437,525 — — (Loss) gain on equity method investments ( 343,336 ) 8,919 ( 66,818 ) (Loss) gain on remeasurement of operating and finance leases ( 866 ) 1,388,273 — Gain on bargain purchase — 1,593,612 — Gain from PPE loan forgiveness — — 142,667 (Loss) on disposal of fixed assets ( 852,544 ) ( 21,173 ) ( 34,342 ) Goodwill impairment — ( 2,921,958 ) — ABC litigation ( 1,000,000 ) — — Other income (expense) 313,135 ( 987,482 ) ( 40,086 ) Total other income $ 1,238,313 $ 950,264 $ 4,437,887 17. Related Party Transactions Historically, the Company has been involved in transactions with various related parties. Legal Services Ely D. Tendler is compensated for his services to the Company as General Counsel and Secretary through payments to Ely D. Tendler Strategic & Legal Services PLLC (“EDTSLS”), a law firm owned by Mr. Tendler. All payments made to EDTSLS by the Company were for Mr. Tendler's services to the Company as General Counsel and Secretary. No other services were provided by EDTSLS to the Company. The Company’s payments to EDTSLS for Mr. Tendler's services totaled $ 916,370 , $ 960,081 and $ 702,083 for the years ended December 31, 2023, 2022 and 2021, respectively. Subcontractor Services PrideStaff provides subcontractor services for the Company. PrideStaff is owned by a former operations manager of the Company and his spouse, and therefore, a related party. The Company made subcontractor payments to PrideStaff totaling $ 0 , $ 547,500 and $ 656,883 for the years ended December 31, 2023, 2022 and 2021, respectively. Transition Services Agreement On October 11, 2023, the Company and Anthony Capone, who resigned as Chief Executive Officer of the Company on September 15, 2023, entered into a separation and transition services agreement (the “Transition Agreement”). Pursuant to the Transition Agreement, Mr. Capone will continue to serve as a consultant to the Company until March 15, 2024 (such period, the “Consulting Period”) to advise on matters relating to business continuity and processes and transition his institutional knowledge with respect to operational and other departmental functions. As compensation for his services during the Consulting Period, and subject to his compliance with the Transition Agreement, including the execution and non-revocation of a general release of claims in favor of the Company, Mr. Capone will receive a monthly consulting fee of $ 45,000 and subsidized premiums for continued group health plan coverage for the duration of the Consulting Period. Mr. Capone will not receive new equity awards or incentive F-41 compensation under the Company’s equity incentive compensation program during the Consulting Period. The Transition Agreement further acknowledges and affirms that Mr. Capone will be bound by and comply with certain restrictive covenants. The Company made payments to Anthony Capone totaling $ 90,000 , $ 0 , and $ 0 for the years ended December 31, 2023, 2022, and 2021 respectively. Included in accounts payable were $ 45,000 and $ 86,555 due to related parties as of December 31, 2023, and 2022, respectively. 18. Income Taxes A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective tax rate consists of the following: Year Ended December 31, 2023 2022 2021 Statutory federal income tax benefit 21.00 % 21.00 % 21.00 % Permanent items 26.18 % 0.56 % ( 2.71 ) % State taxes, net of federal tax benefit 20.67 % 7.77 % 5.99 % Effects of Rates Different from Statutory ( 0.04 ) % 0.17 % ( 0.06 ) % Rate Change 0.04 % 0.01 % — % Other ( 29.54 ) % ( 3.64 ) % ( 0.71 ) % Change in valuation allowance ( 1.91 ) % ( 54.94 ) % ( 20.98 ) % Income tax provision (benefit) 36.40 % ( 29.07 ) % 2.53 % The components of income tax expense (benefit) are as follows: For the Years Ended December 31, 2023 2022 2021 Current: Federal $ 2,555,164 $ 1,493,772 $ 295,956 State and local 5,782,335 502,872 319,741 Foreign - - - $ 8,337,499 $ 1,996,644 $ 615,697 Deferred: Federal $ 1,650,695 $ ( 7,683,475 ) $ - State and local ( 3,256,914 ) ( 2,649,791 ) - Foreign ( 375,300 ) 375,301 - ( 1,981,519 ) ( 9,957,965 ) - Total income tax expense (benefit) $ 6,355,980 $ ( 7,961,321 ) $ 615,697 F-42 Deferred income taxes reflect the net tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The temporary differences that give rise to deferred tax assets and liabilities are as follows: For the Years Ended December 31, 2023 2022 Deferred tax assets: Allowance for doubtful accounts $ 1,683,119 $ 893,328 Accrued expenses 799,295 382,649 Lease liability 4,674,177 2,359,566 Stock compensation 5,039,590 2,780,020 Research and development expense 865,800 303,446 Net operating loss 4,568,113 11,523,633 Other ( 471,694 ) ( 466,789 ) Total deferred tax asset $ 17,158,400 $ 17,775,853 Valuation allowance ( 1,207,673 ) ( 1,520,345 ) Deferred income tax assets, net of allowance $ 15,950,727 $ 16,255,508 Deferred tax liabilities: Prepaid expenses $ ( 780,767 ) $ ( 994,644 ) Depreciation ( 3,819,069 ) ( 2,798,988 ) Right-of-use asset ( 4,544,024 ) ( 2,346,070 ) Amortization 5,081,672 ( 157,839 ) Total deferred tax liability $ ( 4,062,188 ) $ ( 6,297,541 ) Deferred tax assets, net of allowance $ 11,888,539 $ 9,957,967 The Company has determined, based upon available evidence, that it is more likely than not that all of the net deferred tax asset will not be realized and, accordingly, has provided a partial valuation allowance against its net deferred tax asset as of December 31, 2023 and 2022, respectively. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, net operating loss carryback potential and tax planning strategies in making these assessments. As of December 31, 2023 ,2022 and 2021, the Company had federal net operating loss carryforwards of approximately $ 0 , $ 35,289,184 and $ 53,573,046 , respectively. As of December 31, 2023, 2022 and 2021, the Company had approximately $ 10,737,510 , $ 1,520,345 and $ 202,965 of foreign net operating loss carryforwards, respectively. As of December 31, 2023, 2022 and 2021, the Company had state net operating loss carryforward of approximately $ 36,422,543 , $ 2,592,560 and $ 67,229,895 , respectively. The federal net operating loss carryforwards generated after December 31, 2017 of $ 35,298,184 carry forward infinitely. State and foreign net operating loss carryforwards generated in the tax years from 2017 to 2020 will begin to expire, if not utilized, by 2039. Utilization of the net operating loss carryforwards may be subject to an annual limitation according to Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and similar provisions. The difference between the statutory income taxes on the Company’s pre-tax loss and the Company’s effective income tax rate during the years ended December 31, 2023 and 2022 is primarily due to a recorded valuation allowance. The valuation allowance for deferred tax assets as of December 31, 2023 and 2022 was $ 1,207,673 and $ 1,520,345 , respectively. The net F-43 change in the total valuation allowance for the years ended December 31, 2023, and 2022 was a decrease of $ 312,672 and $ 15,182,335 , respectively. In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future table income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company recognizes interest accrued to unrecognized tax benefits and penalties as income tax expense. The Company accrued no penalties or interest during the years ended December 31, 2023, 2022, and 2021. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which they operate. In the normal course of business, the Company is subject to examination by federal and foreign jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction. As of December 31, 2023, open years related to all jurisdictions are 2022, 2021 and 2020. The Company has no open tax audits with any taxing authority as of December 31, 2023. 19. 401(k) Plan The Company established a 401(k) plan in January 2022 that qualifies as a deferred compensation arrangement under Section 401 of the Internal Revenue Code. All U.S. employees that complete two months of service with the Company are eligible to participate in the plan. The Company did not make any employer contributions to this plan as of December 31, 2023. 20. Legal Proceedings From time to time, the Company may be involved as a defendant in legal actions that arise in the normal course of its business. In the opinion of management, the Company has adequate legal defense on all legal actions, and the results of any such proceedings would not materially impact the Consolidated Financial Statements of the Company. The Company provides disclosure and records loss contingencies in accordance with the loss contingencies accounting guidance. In accordance with such guidance, the Company establishes accruals for such matters when potential losses become probable and can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in its Consolidated Financial Statements. As of December 31, 2022, the Company recorded a liability of $ 1,000,000 , which represents an amount for an agreed-upon settlement of various class-based claims, both actual and potential, under California state law, as described below. Stephanie Zamora, Jascha Dlugatch, et al. v. Ambulnz Health, LLC, et al. was filed in the Los Angeles Superior Court on October 11, 2018, and the complaint alleged wage and hour violations pursuant to California’s Private Attorneys’ General Act of 2004 (“PAGA”). On February 24, 2020, this case was consolidated with Jascha Dlugatch, et. al. v. Ambulnz Health, LLC (the “Consolidated Compliant”), another lawsuit filed in the Los Angeles Superior Court. On May 6, 2021, the parties attended mediation and settled the claims pled in the Consolidated Complaint on a class-wide and PAGA basis in exchange for a proposed $ 1,000,000 payment by the defendant parties, inclusive of administrative costs and fees. On September 9, 2022, the Los Angeles Superior Court preliminarily approved the proposed settlement, and on May 2, 2023, the Los Angeles Superior Court issued a final approval of the proposed settlement, which was paid in July 2023. In addition, on October 27, 2023, Joe Naclerio, individually and purportedly on behalf of all others similarly situated, filed a putative class action complaint for violation of federal securities laws in the U.S. District Court for the Southern District of New York against the Company, its Chairman, current and former Chief Executive Officers, and current and former Chief Financial Officers. The complaint alleges that the Company violated various securities laws, and seeks class certification, damages, interest, attorneys’ fees, and other relief. On January 17, 2024, the Court appointed the Genesee County Employees’ Retirement System as lead plaintiff. Due to the early stage of this proceeding, we cannot reasonably estimate the potential range of loss, if any. We dispute the allegations of wrongdoing and intend to defend ourselves vigorously in this matter. F-44 21. Risk and Uncertainties COVID-19 Risks, Impacts and Uncertainties The spread of COVID-19 and the related country-wide shutdowns and restrictions had a mixed impact on the Company’s business. In the ambulance transportation business, which predominantly comprises non-emergency medical transportation, the Company 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 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 are two areas where the Company has experienced positive business impacts from COVID-19. In April and May 2020, the Company participated in an emergency project with Federal Emergency Management Agency in the New York City area. This engagement resulted in incremental transportation revenue. In addition, in response to the need for widespread COVID-19 testing and available EMTs and paramedics, the Company formed a new subsidiary, RRT, with the goal to perform COVID-19 tests at nursing homes, municipal sites, businesses, schools and other venues. RRT is part of the Mobile Health Services segment. As COVID-19 testing activity slowed to account for a minor portion of the Company’s revenues, RRT expanded its services beyond COVID-19 testing to a wide variety of tests, vaccinations and other procedures. The Company’s current business plan assumes increased demand for Mobile Health Services. Demand for such services was accelerated by the pandemic, but is also being driven by longer-term secular factors, such as the increasing desire on the part of patients to receive treatments outside of traditional settings, such as doctor’s offices and hospitals. 22. Subsequent Events Share Repurchase Program On January 31, 2024, the Board of Directors authorized a new share repurchase program pursuant to which the Company may purchase up to $ 36,000,000 in shares of Common Stock during a six-month period ending July 30, 2024 (the “Repurchase Program”) and may be suspended, extended, modified or discontinued at any time. Under the terms of the Repurchase Program, the Company may purchase shares of Common Stock on a discretionary basis from time to time through open market repurchases or privately negotiated transactions or through other means, including by entering into Rule 10b5-1 trading plans or accelerated share repurchase programs, in each case, during an “open window” and when the Company does not possess material non-public information. The timing, manner, price and amount of shares repurchased under the Repurchase Program will depend on a variety of factors, including stock price, trading volume, market conditions, corporate and regulatory requirements and other general business considerations. The Repurchase Program may be modified, suspended or discontinued at any time without prior notice. Repurchases under the Repurchase Program may be funded from the Company’s existing cash and cash equivalents, future cash flow or proceeds of borrowings or debt offerings. Line of Credit On February 8, 2024, the Company made a draw of $ 15,000,000 under its Revolving Facility. On February 27, 2024, the Company repaid all amounts outstanding under the Revolving Facility, and no amounts are outstanding as of the date of this Annual Report. F-45 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.