DocGo Inc. 10-Q

Item 1. Financial Statements Condensed Consolidated Balance Sheets as of Sep tember 30 , 2024 (Unaudited) and December 31, 2023 2 Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2024 and 2023 3 Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 4 Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 6 Notes to Unaudited Condensed Consolidated Financial Statements 8 1 Table of Contents DocGo Inc. and Subsidiaries UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS September 30, 2024 December 31, 2023 Unaudited Audited ASSETS Current assets: Cash and cash equivalents $ 89,458,388 $ 59,286,147 Accounts receivable, net of allowance for credit loss of $ 6,455,874 and $ 6,276,454 as of September 30, 2024 and December 31, 2023, respectively 233,712,723 262,083,462 Prepaid expenses and other current assets 5,154,906 17,499,953 Total current assets 328,326,017 338,869,562 Property and equipment, net 15,284,753 16,835,484 Intangibles, net 34,996,541 37,682,928 Goodwill 47,862,242 47,539,929 Restricted cash 19,120,110 12,931,839 Operating lease right-of-use assets 12,489,767 9,580,535 Finance lease right-of-use assets 14,605,119 12,003,919 Equity method investments 634,100 553,573 Deferred tax assets 17,131,328 11,888,539 Other assets 3,432,562 2,565,649 Total assets $ 493,882,539 $ 490,451,957 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 35,141,454 $ 19,827,258 Accrued liabilities 59,968,606 91,340,609 Line of credit 30,000,000 25,000,000 Notes payable, current 26,374 28,131 Due to seller 138,275 7,823,009 Contingent consideration 16,744,521 19,792,982 Operating lease liability, current 3,776,159 2,773,020 Finance lease liability, current 4,435,324 3,534,073 Total current liabilities 150,230,713 170,119,082 Notes payable, non-current 21,336 41,586 Operating lease liability, non-current 9,172,259 7,223,941 Finance lease liability, non-current 9,554,694 7,896,392 Total liabilities 168,979,002 185,281,001 Commitments and contingencies Stockholders’ equity: Common stock ($ 0.0001 par value; 500,000,000 shares authorized as of September 30, 2024 and December 31, 2023; 101,980,995 and 104,055,168 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively) 10,198 10,406 Additional paid-in-capital 321,028,986 320,693,866 Retained earnings (accumulated deficit) 1,860,643 ( 21,394,310 ) Accumulated other comprehensive income 2,313,518 1,484,905 Total stockholders’ equity attributable to DocGo Inc. and Subsidiaries 325,213,345 300,794,867 Noncontrolling interests ( 309,808 ) 4,376,089 Total stockholders’ equity 324,903,537 305,170,956 Total liabilities and stockholders’ equity $ 493,882,539 $ 490,451,957 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 2 Table of Contents DocGo Inc. and Subsidiaries UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenues, net $ 138,684,814 $ 186,552,910 $ 495,722,059 $ 425,042,373 Expenses: Cost of revenues (exclusive of depreciation and amortization, which is shown separately below) 88,764,282 131,502,046 322,645,933 296,346,420 Operating expenses: General and administrative 28,784,850 33,619,962 103,716,978 93,637,516 Depreciation and amortization 4,177,534 4,336,267 12,561,973 11,816,657 Legal and regulatory 3,295,139 3,545,820 11,622,438 9,588,997 Technology and development 3,145,834 3,235,301 7,903,752 7,673,269 Sales, advertising and marketing 379,778 1,605,559 1,109,072 2,598,192 Total expenses 128,547,417 177,844,955 459,560,146 421,661,051 Income from operations 10,137,397 8,707,955 36,161,913 3,381,322 Other income (expense): Interest (expense) income, net ( 505,085 ) 346,376 ( 1,387,743 ) 1,677,420 Change in fair value of contingent liability ( 44,520 ) 159,974 ( 370,712 ) 159,974 Loss on equity method investments ( 82,742 ) ( 95,503 ) ( 229,923 ) ( 301,362 ) (Loss) gain on remeasurement of operating and finance leases ( 6,163 ) 4,834 ( 32,052 ) 4,834 (Loss) gain on disposal of fixed assets ( 28,681 ) ( 9,983 ) 36,717 ( 163,452 ) Other income (expense) ( 435,825 ) 43,353 146,058 ( 661,825 ) Total other income (expense) ( 1,103,016 ) 449,051 ( 1,837,655 ) 715,589 Net income before income tax provision 9,034,381 9,157,006 34,324,258 4,096,911 Provision for income taxes ( 4,488,828 ) ( 4,526,767 ) ( 13,316,752 ) ( 2,041,843 ) Net income 4,545,553 4,630,239 21,007,506 2,055,068 Net (loss) income attributable to noncontrolling interests ( 952,348 ) ( 134,682 ) ( 2,247,447 ) 2,767,084 Net income (loss) attributable to stockholders of DocGo Inc. and Subsidiaries 5,497,901 4,764,921 23,254,953 ( 712,016 ) Other comprehensive income Foreign currency translation adjustment 934,774 ( 582,471 ) 828,613 66,965 Total comprehensive income (loss) $ 6,432,675 $ 4,182,450 $ 24,083,566 $ ( 645,051 ) Net income (loss) per share attributable to DocGo Inc. and Subsidiaries - Basic $ 0.05 $ 0.05 $ 0.23 $ ( 0.01 ) Weighted-average shares outstanding - Basic 102,067,579 103,874,845 102,573,664 103,351,345 Net income (loss) per share attributable to DocGo Inc. and Subsidiaries - Diluted $ 0.05 $ 0.05 $ 0.22 $ ( 0.01 ) Weighted-average shares outstanding - Diluted 106,290,929 104,993,729 106,797,014 103,351,345 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 3 Table of Contents DocGo Inc. and Subsidiaries UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Common Stock Additional Paid-in- Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income Noncontrolling Interests Total Stockholders’ Equity Shares Amount Balance - December 31, 2022 102,411,162 $ 10,241 $ 301,451,435 $ ( 28,972,216 ) $ 741,206 $ 5,696,725 $ 278,927,391 Exercise of stock options 96,101 10 249,705 — — — 249,715 UK Ltd. restricted stock — — 167,175 — — — 167,175 Stock-based compensation 424,911 42 8,181,549 — — — 8,181,591 Health liquidation — — — 70,284 — — 70,284 Net loss attributable to noncontrolling interests — — — — — ( 453,120 ) ( 453,120 ) Foreign currency translation — — — — 243,658 — 243,658 Net loss attributable to stockholders of DocGo Inc. and Subsidiaries — — — ( 3,465,670 ) — — ( 3,465,670 ) Balance - March 31, 2023 102,932,174 $ 10,293 $ 310,049,864 $ ( 32,367,602 ) $ 984,864 $ 5,243,605 $ 283,921,024 Acquisition of CRMS 117,330 12 1,000,000 — — — 1,000,012 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 260,410 26 706,379 — — — 706,405 Stock based compensation, net of tax settled in shares 92,033 9 1,778,001 — — — 1,778,010 Net income attributable to noncontrolling interests — — — — — 3,354,886 3,354,886 Foreign currency translation — — — — 405,778 — 405,778 Net loss attributable to stockholders of DocGo Inc. and Subsidiaries — — — ( 2,011,267 ) — — ( 2,011,267 ) Balance - June 30, 2023 103,762,092 $ 10,376 $ 312,101,281 $ ( 33,729,702 ) $ 1,390,642 $ 4,087,982 $ 283,860,579 Exercise of stock options 88,837 8 425,995 — — — 426,003 Cashless exercise of options 6,374 1 ( 1 ) — — — — Stock based compensation 30,650 3 3,335,707 — — — 3,335,710 Shares withheld for taxes ( 13,414 ) ( 1 ) ( 117,644 ) — — — ( 117,645 ) Net loss attributable to noncontrolling interests — — — — — ( 134,682 ) ( 134,682 ) Foreign currency translation — — — — ( 582,471 ) — ( 582,471 ) Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — 4,764,921 — — 4,764,921 Balance - September 30, 2023 103,874,539 $ 10,387 $ 315,745,338 $ ( 28,964,781 ) $ 808,171 $ 3,953,300 $ 291,552,415 4 Table of Contents Common Stock Additional Paid-in- Capital Retained Earnings (Accumulated Deficit) Accumulated Other Comprehensive Income Noncontrolling Interests Total Stockholders’ Equity Shares Amount Balance - December 31, 2023 104,055,168 $ 10,406 $ 320,693,866 $ ( 21,394,310 ) $ 1,484,905 $ 4,376,089 $ 305,170,956 Common stock repurchased ( 1,255,614 ) ( 126 ) ( 4,877,433 ) — — — ( 4,877,559 ) Stock-based compensation 165,688 17 4,340,388 — — — 4,340,405 Shares withheld for taxes ( 3,747 ) — ( 20,946 ) — — — ( 20,946 ) Net loss attributable to noncontrolling interests — — — — — ( 624,070 ) ( 624,070 ) Foreign currency translation — — — — ( 140,134 ) — ( 140,134 ) Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — 11,227,449 — — 11,227,449 Balance - March 31, 2024 102,961,495 $ 10,297 $ 320,135,875 $ ( 10,166,861 ) $ 1,344,771 $ 3,752,019 $ 315,076,101 Common stock repurchased ( 1,395,957 ) ( 140 ) ( 4,904,312 ) — — — ( 4,904,452 ) Stock-based compensation 181,136 18 2,417,092 — — — 2,417,110 Shares withheld for taxes ( 64,334 ) ( 7 ) ( 245,379 ) — — — ( 245,386 ) Exercise of stock options 430 — 684 — — — 684 Net loss attributable to noncontrolling interests — — — — — ( 671,029 ) ( 671,029 ) Dividends paid to noncontrolling interest — — — — — ( 250,000 ) ( 250,000 ) Foreign currency translation — — — — 33,973 — 33,973 Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — 6,529,603 — — 6,529,603 Balance - June 30, 2024 101,682,770 $ 10,168 $ 317,403,960 $ ( 3,637,258 ) $ 1,378,744 $ 2,830,990 $ 317,986,604 Common stock repurchased ( 356,113 ) ( 35 ) ( 1,296,152 ) — — — ( 1,296,187 ) Stock-based compensation 112,100 11 2,874,416 — — — 2,874,427 Shares withheld for taxes ( 36,112 ) ( 4 ) ( 107,975 ) — — — ( 107,979 ) CRMS True-up Payment 578,350 58 1,814,287 — — — 1,814,345 Acquisition of Ambulnz CO — — 340,450 — — ( 2,188,450 ) ( 1,848,000 ) Net loss attributable to noncontrolling interests — — — — — ( 952,348 ) ( 952,348 ) Foreign currency translation — — — — 934,774 — 934,774 Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — 5,497,901 — — 5,497,901 Balance - September 30, 2024 101,980,995 $ 10,198 $ 321,028,986 $ 1,860,643 $ 2,313,518 $ ( 309,808 ) $ 324,903,537 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 5 Table of Contents DocGo Inc. and Subsidiaries UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS Nine Months Ended September 30, 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 21,007,506 $ 2,055,068 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation of property and equipment 4,282,940 4,697,717 Amortization of intangible assets 4,884,337 4,295,958 Amortization of finance lease right-of-use assets 3,394,696 2,822,982 (Gain) loss on disposal of fixed assets ( 36,717 ) 163,452 Deferred income tax ( 5,242,787 ) 1,049,236 Loss on equity method investments 229,923 301,362 Bad debt expense 3,857,474 ( 311,441 ) Stock-based compensation 9,755,455 15,161,847 Loss (gain) on remeasurement of operating and finance leases 32,052 ( 4,834 ) Loss on liquidation of business — 70,284 Change in fair value of contingent consideration 370,712 ( 159,974 ) Changes in operating assets and liabilities: Accounts receivable 19,837,507 ( 103,483,997 ) Prepaid expenses and other current assets 12,333,127 ( 336,093 ) Other assets ( 1,086,913 ) 696,984 Accounts payable 15,326,159 ( 12,640,920 ) Accrued liabilities ( 31,495,516 ) 27,319,258 Net cash provided by (used in) operating activities 57,449,955 ( 58,303,111 ) CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment ( 2,940,843 ) ( 4,360,807 ) Acquisition of intangibles ( 2,228,233 ) ( 2,478,808 ) Acquisition of businesses — ( 20,203,464 ) Equity method investments ( 310,450 ) ( 150,510 ) Proceeds from disposal of property and equipment 178,535 274,210 Net cash used in investing activities ( 5,300,991 ) ( 26,919,379 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit line 45,000,000 — Repayments of revolving credit line ( 40,000,000 ) — Repayments of notes payable ( 22,007 ) ( 529,583 ) Due to seller ( 3,008,976 ) ( 8,417,936 ) Acquisition of noncontrolling interest ( 1,848,000 ) — Earnout payments on contingent liabilities ( 1,600,029 ) — Dividends paid to noncontrolling interest ( 250,000 ) — Proceeds from exercise of stock options 684 1,549,298 Payments for taxes related to shares withheld for employee taxes ( 374,311 ) ( 2,166,982 ) Common stock repurchased ( 11,078,198 ) — Payments on obligations under finance lease ( 3,118,054 ) ( 2,293,330 ) Net cash used in financing activities ( 16,298,891 ) ( 11,858,533 ) Effect of exchange rate changes on cash and cash equivalents 510,439 227,887 Net increase (decrease) in cash and restricted cash 36,360,512 ( 96,853,136 ) Cash and restricted cash at beginning of period 72,217,986 164,109,074 Cash and restricted cash at end of period $ 108,578,498 $ 67,255,938 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 6 Table of Contents DocGo Inc. and Subsidiaries UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) Nine Months Ended September 30, 2024 2023 Supplemental disclosure of cash and non-cash transactions: Cash paid for interest $ 1,507,026 $ 179,430 Cash paid for interest on finance lease liabilities $ 560,926 $ 394,443 Cash paid for income taxes $ 6,542,733 $ 4,223,810 Right-of-use assets obtained in exchange for lease liabilities $ 10,980,341 $ 2,407,938 Remeasurement of finance lease right-of-use asset due to lease modification $ 300,000 $ — Fixed assets acquired in exchange for notes payable $ — $ 1,369,060 Supplemental non-cash investing and financing activities: 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 CRMS True-up Payment through issuance of stock $ 1,814,345 $ — Receivable exchanged for trade credits $ — $ 1,500,000 Pre-acquisition receivables written off through due to seller $ 4,675,758 $ — Reconciliation of cash and restricted cash Cash $ 89,458,388 $ 52,922,517 Restricted cash 19,120,110 14,333,421 Total cash and restricted cash shown in statement of cash flows $ 108,578,498 $ 67,255,938 The accompanying notes are an integral part of these unaudited Condensed Consolidated Financial Statements. 7 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. Description of Organization and Business Operations Background 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. 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 United States (“U.S.”) as well as within England and Wales, United Kingdom (“U.K.”). The Business The Company is a mobile healthcare services company that uses proprietary dispatch and communication technology to help provide (i) quality mobile, in-person medical treatment directly to patients in the comfort of their homes, workplaces and other non-traditional locations and (ii) healthcare transportation in major metropolitan cities in the U.S. and the 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 Mobile Health Services and Transportation 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. 8 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited Condensed 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 regarding interim financial reporting. Certain information and disclosures normally included in the financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. The Consolidated Balance Sheet as of December 31, 2023 included herein was derived from the audited financial statements as of that date but does not include all disclosures including notes required by U.S. GAAP. Principles of Consolidation The unaudited Condensed Consolidated Financial Statements include the accounts and operations of DocGo Inc. and its subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation. Noncontrolling interests (“NCI”) on the unaudited Condensed Consolidated Financial Statements represent a portion of consolidated joint ventures and variable interest entities (“VIEs”) in which the Company does not have direct equity ownership. Certain amounts in the prior periods’ unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity and Condensed Consolidated Statements of Cash Flows have been reclassified to conform to the current period 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 interest and, if so, whether or not those entities are 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 that contract with physicians and other health professionals that provide services on behalf of 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 income (loss) for the Company’s VIEs was $( 67,785 ) and $( 103,378 ) for the three months ended September 30, 2024 and 2023, respectively, and $( 425,668 ) and $ 16,839 for the nine months ended September 30, 2024 and 2023, respectively. Total assets amounted to $ 11,844,062 and $ 4,364,274 as of September 30, 2024 and December 31, 2023, respectively. Total liabilities were $ 12,717,312 and $ 4,811,857 as of September 30, 2024 and December 31, 2023, respectively. The Company’s VIEs’ total stockholders’ deficit was $ 873,250 and $ 447,583 as of September 30, 2024 and December 31, 2023, respectively. 9 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Foreign Currency The Company’s functional currency is the U.S. dollar. The functional currency of the Company’s foreign operation is the British pound. Assets and liabilities of the Company’s foreign operation denominated in the British pound are translated at the spot rate in effect at the applicable reporting date, except for equity accounts, which are translated at historical rates. The unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) are translated at the weighted average rate of exchange during the applicable period. The resulting unrealized cumulative translation adjustment for the three months ended September 30, 2024 and 2023 were $ 934,774 and $( 582,471 ), respectively, and $ 828,613 and $ 66,965 for the nine months ended September 30, 2024 and 2023, respectively. 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; 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 credit loss, 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 41 % of revenues and 34 % of net accounts receivable and another customer that accounted for 21 % of revenues and 44 % of net accounts receivable for the three months ended September 30, 2024. The Company had one customer that accounted for approximately 36 % of revenues and 34 % of net accounts receivable and another customer that accounted for 31 % of revenues and 44 % of net accounts receivable for the nine months ended September 30, 2024. The Company had one customer that accounted for approximately 33 % of revenues and 36 % of net accounts receivable and another customer that accounted for approximately 32 % of revenues and 28 % of accounts receivable for the three months ended September 30, 2023. The Company had one customer that accounted for approximately 37 % of revenues and 10 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 28 % of net accounts receivable and another customer that accounted for approximately 17 % of revenues and 36 % of accounts receivables for the nine months ended September 30, 2023. Major Vendor The Company had one vendor that accounted for approximatel y 19 % and 20 % of total cost for the three months ended September 30, 2024 and 2023, respectively. The Company expects to maintain this relationship with the vendor and believes the services provided by this vendor are available from alternative sources. The Company had one vendor that accounted for approximately 18 % and 13 % of total cost for the nine months ended September 30, 2024 and 2023, respectively. The Company expects to maintain this relationship with the vendor and believes the services provided from this vendor are available from alternative sources. Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying unaudited Condensed 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 approximate ly $ 5,064,084 and $ 3,699,793 with foreign financial institutions on September 30, 2024 and December 31, 2023, respectively. Restricted Cash Cash and cash equivalents subject to contractual restrictions and not readily available are classified as restricted cash in the unaudited Condensed 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 and a standby letter of credit as required by its insurance carrier (see Note 9). 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 unaudited Condensed 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. 11 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. 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 that 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 September 30, 2024 and December 31, 2023. For certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, restricted cash, accounts payable, accrued expenses, and due to seller, the carrying amounts approximate their fair values as they are 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 their 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 consideration, as a result of changes in significant inputs such as the discount rate and estimated probabilities of financial milestone achievements, could have a material effect on the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and Condensed Consolidated Balance Sheets in the period of the change. In connection with the acquisition of Ryan Bros. Fort Atkinson, LLC (“Ryan Brothers”), the Company recorded $ 4,000,000 in contingent consideration to be paid based on the completion of certain performance obligations over a 24-month period. The Company recorded a change in fair value of contingent consideration in the amount of $ 33,453 and $( 159,974 ) for the three months ended September 30, 2024 and 2023, respectively, and $ 86,056 and $( 159,974 ) for the nine months ended September 30, 2024 and 2023, respectively. 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 $ 1,907,074 and $ 1,821,018 as of September 30, 2024 and December 31, 2023, respectively (see Note 4). In connection with the acquisition of Exceptional Medical Transportation, LLC (“Exceptional”), the Company also agreed to pay up to $ 2,000,000 in contingent consideration upon meeting certain performance conditions within two years of the closing date of such acquisition. The Company recorded a change in fair value of contingent consideration in the amount of $ 11,067 and $( 13,763 ) for the three and nine months ended September 30, 2024, respectively. The Company did no t record a change in fair value of contingent consideration for the three and nine months ended September 30, 2023. 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 $ 426,655 . The estimated contingent consideration amount payable for Exceptional was $ 265,538 and $ 279,301 as of September 30, 2024 and December 31, 2023, respectively (see Note 4). In connection with the acquisition of Location Medical Services, LLC (“LMS”), the Company recorded $ 2,475,540 in contingent consideration to be paid upon LMS meeting certain performance conditions in 2023. The Company did no t record a change in fair value of contingent consideration for the three and nine months ended September 30, 2024 and 2023. The Company made a payment of $ 600,029 during the nine months ended September 30, 2024. The Company did no t record any foreign exchange movem ent for the three months ended September 30, 2024, but recorded a foreign exchange movement of $( 90,834 ) for the three months ended September 30, 2023. The Company recorded foreign exchange movements of $( 4,798 ) and $ 20,730 for the nine months ended September 30, 2024 and 2023, respectively . There was no remaining contingent liability bal ance as of September 30, 2024 and a contingent liability balance of $ 604,827 as of December 31, 2023 (see Note 4). In connection with the acquisition of Cardiac RMS, LLC (“CRMS”), the Company recorded $ 15,822,190 in contingent consideration, consisting of an estimated true-up payment of $ 2,088,243 to be paid in 2024 based on the attainment of full-year 2023 EBIDTA targets (the “True-Up Payment”) and estimated earn out payments amounting to $ 13,733,947 . The earn out payments are to be paid out over 36 months, beginning in 2025, for the remaining 49 % equity of CRMS, based on 12 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) CRMS’ attainment of full-year EBITDA targets. The Company did no t record a change in fair value of contingent consideration for the three months ended September 30, 2024, but recorded a change in fair value of contingent consideration in the amount of $ 298,419 for the nine months ended September 30, 2024. The Company did no t record a change in fair value of contingent consideration for the three and nine months ended September 30, 2023. On May 29, 2024, the Company made a portion of the True-up Payment in the amount of $ 1,000,000 . During the three and nine months ended September 30, 2024, the Company issued $ 1,814,345 in Common Stock, or 578,350 shares, constituting the remainder of the True-up Payment. The estimated contingent consideration amount payable for CRMS was $ 14,571,909 and $ 17,087,835 as of September 30, 2024 and December 31, 2023, respectively (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 Transportation Services 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 healthcare and transportation 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 patients directly. The Company generally does not require collateral for accounts receivable . Accounts receivable are net of insurance provider contractual allowances, which are estimated at the time of billing based on contractual terms or other arrangements. The Company maintains an allowance for credit losses for accounts receivable, net which is recorded as an offset to accounts receivable, net and changes in this allowance are recorded within general and administrative expenses in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The carrying amount of accounts receivable represents the maximum credit risk exposure of these assets. On a quarterly basis, in accordance with Federal Accounting Standards Board (“FASB”) ASC 326, Measurement of Credit Losses on Financial Instruments (“ASC 326”), the Company evaluates the collectability of outstanding accounts receivable balances to determine an allowance for credit loss that reflects its best estimate of the lifetime expected credit losses. Individual uncollectible accounts are written off against the allowance when collection of the individual account does not appear probable. Under the current expected credit loss impairment model, the Company develops and documents its allowance for credit losses on its trade receivables based on a single portfolio segment. The Company assesses collectability by aggregating and reviewing accounts receivable on a collective basis for customers that share similar risk characteristics. Additionally, when accounts receivable do not share risk characteristics with other accounts receivables, management will evaluate such accounts receivable for expected credit loss on an individual specific identification basis when the Company identifies specific customers with known disputes or collectability issues. Due to the short-term nature of the Company’s accounts receivables, the estimate of expected credit loss is based on the aging of accounts using an aging schedule as of period ends. In determining the amount of the allowance for credit losses, the Company considers historical collection history based on past due status, the current aging of receivables, customer-specific credit risk factors including their current financial condition, current market conditions, and probable future economic conditions which inform adjustments to historical loss patterns. As of January 1, 2024, the Company held a beginning balance in its allowance for credit losses on accounts receivable of $ 6,276,454 . The Company recognized an additional provision for credit losses of $ 3,270,217 and write offs of $( 3,090,797 ) during the year. The Company’s balance in its allowance for credit losses amounted to $ 6,455,874 as of September 30, 2024. 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 unaudited Condensed Consolidated Statement of Operations and Comprehensive 13 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 - 7 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 expensed 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. 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 14 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. 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. Interest expense on outstanding balances is expensed as incurred. Related Party Transactions The Company defines related parties as affiliates of the Company, entities for which investments are accounted for by the equity method, trusts for the benefit of employees, principal owners (beneficial owners of more than 10 % of the voting interest), management, members of immediate families of principal owners or management and other parties with which the Company may deal with if one party controls or can significantly influence management or the operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Related party transactions are recorded within operating expenses in the Company’s unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). For details regarding the related party transactions that occurred during the three and nine months ended September 30, 2024 and 2023, refer to Note 16. Revenue Recognition On January 1, 2019, the Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”). To determine revenue recognition for contractual arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (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. The transaction price associated with the Company’s contracts with customers is generally determined based on fixed and determinable amounts of consideration as specified in a contract, which includes a fixed base rate and/or fixed mileage rate. For Transportation Services arrangements with billings to third party payors and healthcare facilities, this may also include variable consideration in instances where it is considered probable that a significant reversal of cumulative revenue recognized will not occur. For these services, revenues are recorded net of estimated contractual allowances for claims subject to contracts with responsible paying entities. The Company estimates contractual allowance at the time of billing based on contractual terms, historical collections or other arrangements. The Company also estimates the amount unbilled at month end and recognizes such amounts as revenue, based on available data and customer history. The Company utilizes the expected value method when estimating its variable consideration. The assumptions utilized in estimating variable 15 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) consideration include the Company’s previous experience with similar contracts and history of collection rates on prior trips that have been performed. The Company reevaluates its variable consideration at each reporting period. Nature of the Company’s 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 also concluded that Transportation Services and any related support activities are a single performance obligation under ASC 606. 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. 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 simultaneousl y 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. 16 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) In the following table, revenues are disaggregated as follows: Revenue Breakdown Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Primary Geographical Markets United States $ 123,429,213 $ 174,076,595 $ 453,328,633 $ 385,589,261 United Kingdom 15,255,601 12,476,315 42,393,426 39,453,112 Total revenues $ 138,684,814 $ 186,552,910 $ 495,722,059 $ 425,042,373 Major Segments/Service Lines Mobile Health Services $ 90,663,433 $ 139,340,467 $ 351,346,919 $ 292,351,835 Transportation Services 48,021,381 47,212,443 144,375,140 132,690,538 Total revenues $ 138,684,814 $ 186,552,910 $ 495,722,059 $ 425,042,373 Stock-Based Compensation The Company maintains a stock incentive plan under which the Company may issue 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 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 unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). 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 conversion of stock options, unvested RSUs and PSUs. 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. 17 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The following table presents the calculation of basic and diluted net income per share to stockholders of DocGo Inc. and Subsidiaries: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net income (loss) attributable to stockholders of DocGo Inc. and Subsidiaries 5,497,901 4,764,921 23,254,953 ( 712,016 ) Weighted-average shares outstanding - Basic 102,067,579 103,874,845 102,573,664 103,351,345 Effect of dilutive options 4,223,350 1,118,884 4,223,350 1,118,884 Weighted-average shares outstanding - Diluted 106,290,929 104,993,729 106,797,014 103,351,345 Net income (loss) per share attributable to DocGo Inc. and Subsidiaries - Basic 0.05 0.05 0.23 ( 0.01 ) Net income (loss) per share attributable to DocGo Inc. and Subsidiaries - Diluted 0.05 0.05 0.22 ( 0.01 ) Anti-dilutive employee share-based awards excluded 7,267,649 10,191,301 7,267,649 10,191,301 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 periodically reviews the investments for other than temporary declines in fair value below cost or more frequently when events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. On October 26, 2021, the Company acquired a 50 % interest in RND Health Services Inc. (“RND”) for $ 655,876 . During the nine months ended September 30, 2024 and the year ended December 31, 2023, the Company made additional investments amounting to $ 310,450 and $ 298,932 , respectively. The Company’s carrying value in RND, an equity method investee, is reflected in the caption “Equity method investments” in the unaudited Condensed Consolidated Balance Sheets. Changes in value of RND are recorded in “Loss on equity method investments” in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). 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 September 30, 2024 and December 31, 2023, the Company owned 50 % of NPA. The Company’s carrying value in NPA, an equity method investee, is reflected in the caption “Equity method investments” in the unaudited Condensed Consolidated Balance Sheets. Changes in value of NPA are recorded in “Loss on equity method investments” in the unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Leases The Company categorizes leases at its inception as either operating or finance leases based on the criteria in ASC 842, Leases (“ASC 842”). The Company adopted ASC 842 on January 1, 2019, using the modified retrospective approach, and has established a right-of-use asset and a current and non-current lease liability for each lease arrangement identified. The lease liability is recorded at the present value of future lease payments discounted using the discount rate that approximates the Company’s incremental borrowing rate for the lease established at the commencement date, and the right-of-use asset is measured as the lease liability plus any initial direct costs, less any lease incentives received before commencement. The Company recognizes a single lease cost, so that the remaining cost of the lease is allocated over the remaining lease term on a straight-line basis. 18 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 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 Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure (“ASU 2023-07”). ASU 2023-07 updates reportable segment disclosure requirements, primarily through requiring enhanced disclosures about significant segment expenses and information used to assess segment performance. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07 on its disclosures. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 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 ASU 2023-09 on its disclosures. 3. Property and Equipment, Net Property and equipment, net as of September 30, 2024 and December 31, 2023 are as follows: September 30, 2024 December 31, 2023 Transportation equipment $ 17,532,777 $ 17,438,072 Medical equipment 8,775,453 7,104,161 Office equipment and furniture 4,238,478 3,701,657 Leasehold improvements 862,525 709,619 Buildings 527,283 527,283 Land 37,800 37,800 31,974,316 29,518,592 Less: Accumulated depreciation ( 16,689,563 ) ( 12,683,108 ) Property and equipment, net $ 15,284,753 $ 16,835,484 19 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) During the nine months ended September 30, 2024, the Company disposed of assets with a cost of $ 608,983 and accumulated depreciation of $ 400,349 for proceeds of $ 246,615 . The Company recorded a gain on disposal of assets of $ 37,981 for the nine months ended September 30, 2024. The Company recorded depreciation expense of $ 1,374,975 and $ 1,625,070 for the three months ended September 30, 2024 and 2023, respectively. The Company recorded depreciation expense of $ 4,282,940 and $ 4,697,717 for the nine months ended September 30, 2024 and 2023, respectively. 4. Acquisition of Businesses Exceptional Medical Transportation, LLC On July 13, 2022, Holdings acquired 100 % of the outstanding shares of common stock of Exceptional, a provider of medical transportation services, in exchange for $ 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. During the nine months ended September 30, 2024, the Company wrote off $ 1,315,691 pre-acquisition accounts receivable through due to seller, the liability established during acquisition. Additionally, the Company paid $ 3,000,000 of the $ 6,000,000 remaining purchase price payable as of December 31, 2023 and paid the remaining $ 3,000,000 as of September 30, 2024. There were no remaining purchase price payable as of September 30, 2024 and a purchase price payable of $ 3,000,000 as of December 31, 2023. As of September 30, 2024 and December 31, 2023, there was remaining due to seller balance pertaining to pre-acquisition accounts receivable of $ 138,275 and $ 1,453,966 , respectively. The Company recorded a change in fair value of contingent consideration in the amount of $ 11,067 and $( 13,763 ) for the three and nine months ended September 30, 2024, respectively. The Company did no t record a change in fair value of contingent consideration for the three and nine months ended September 30, 2023. 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 $ 426,655 . The estimated contingent consideration amount payable for Exceptional was $ 265,538 and $ 279,301 as of September 30, 2024 and December 31, 2023, respectively. Ryan Bros. Fort Atkinson, LLC On August 9, 2022, Holdings acquired 100 % of the outstanding shares of common stock of Ryan Brothers, a provider of medical transportation services, in exchange for an aggregate purchase price of $ 11,422,252 , consisting of $ 7,422,252 in cash at closing and an estimated $ 4,000,000 in contingent consideration to be paid out over 24 months, commencing on August 1, 2022, based on performance of certain obligations. During the nine months ended September 30, 2024, the Company wrote off $ 3,360,067 pre-acquisition accounts receivable through due to seller, the liability established during acquisition. Additionally, the Company made payments in the amount of $ 8,976 on the remaining purchase price payable during the nine months ended September 30, 2024. There was no remaining due to seller balance as of September 30, 2024 and a due to seller balance of $ 3,369,043 as of December 31, 2023. The Company recorded a change in fair value of contingent consideration in the amount of $ 33,453 and $( 159,974 ) for the three months ended September 30, 2024 and 2023, respectively, and $ 86,056 and $( 159,974 ) for the nine months ended September 30, 2024 and 2023, respectively. 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 $ 1,907,074 and $ 1,821,018 as of September 30, 2024 and December 31, 2023, respectively. Location Medical Services, LLC On December 9, 2022, Holdings, through its indirect wholly owned subsidiary Ambulnz U.K. Ltd. (“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. 20 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Additionally, the Company paid $ 11,279,201 of deferred consideration to LMS during the year ended December 31, 2023. As of September 30, 2024 and December 31, 2023, there was no remaining due to seller amounts outstanding. The Company did no t record a change in fair value of contingent consideration for the three and nine months ended September 30, 2024 and 2023 but recorded foreign exchange movements of $ 0 and $( 90,834 ) for the three months ended September 30, 2024 and 2023, respectively, and $( 4,798 ) and $ 20,730 for the nine months ended September 30, 2024 and 2023, respectively. On April 2, 2024, the Company paid the remaining contingent consideration balance in the amount of $ 600,029 . There was no remaining contingent liability balance as of September 30, 2024 and a contingent liability balance of $ 604,827 as of December 31, 2023. 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. The Company also agreed to pay additional consideration following the initial closing, consisting of an estimated True-up Payment of $ 2,088,243 to be paid in 2024 based on the attainment of full-year 2023 EBITDA targets and estimated earn out payments amounting to $ 13,733,947 . The earn out payments are to be paid out over 36 months, beginning in 2025, 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. The Company did no t record a change in fair value of contingent consideration for the three months ended September 30, 2024, but recorded a change in fair value of contingent consideration in the amount of $ 298,419 for the nine months ended September 30, 2024. The Company did no t record a change in fair value of contingent consideration for the three and nine months ended September 30, 2023. On May 29, 2024, the Company paid a portion of the True-up Payment in the amount of $ 1,000,000 . During the three and nine months ended September 30, 2024, the Company issued $ 1,814,345 in Common Stock, or 578,350 shares, constituting the remainder of the True-up Payment. The estimated contingent consideration amount payable for CRMS was $ 14,571,909 and $ 17,087,835 as of September 30, 2024 and December 31, 2023, respectively. 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 $ 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 in exchange for $ 1,385,156 in cash. Ambulnz CO, LLC On July 1, 2024, the Company acquired the remaining noncontrolling interest in its Ambulnz CO, LLC (“Ambulnz CO”) joint venture from the University of Colorado Health in exchange for $ 1,848,000 in cash. The following table presents the assets acquired and liabilities assumed at the date of the acquisitions: 21 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Ambulnz CO FMC NA CRMS Total Consideration: Cash consideration $ 1,848,000 $ 4,000,000 $ 9,000,000 $ 14,848,000 Stock consideration — 3,000,000 1,000,000 4,000,000 Due to seller — — — — Amounts held under an escrow account — — — — Contingent liability — — 15,822,190 15,822,190 Total consideration $ 1,848,000 $ 7,000,000 $ 25,822,190 $ 34,670,190 Recognized amounts of identifiable assets acquired and liabilities assumed Cash $ — $ — $ 1,574,604 $ 1,574,604 Accounts receivable — — 2,033,533 2,033,533 Other current assets — — 293,478 293,478 Property, plant and equipment — — — — Intangible assets — — 15,930,000 15,930,000 Total identifiable assets acquired — — 19,831,615 19,831,615 Accounts payable — — 28,978 28,978 Due to seller — — 2,448,460 2,448,460 Other current liabilities — — 174,177 174,177 Total liabilities assumed — — 2,651,615 2,651,615 Noncontrolling interests 2,188,450 2,567,037 — 4,755,487 Goodwill — — 8,642,190 8,642,190 Additional paid-in-capital ( 340,450 ) 4,432,963 — 4,092,513 Total purchase price $ 1,848,000 $ 7,000,000 $ 25,822,190 $ 34,670,190 22 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Pro Forma Disclosures The following unaudited pro forma combined financial information for the three and nine months ended September 30, 2023 gives effect to the acquisitions disclosed above as if they had occurred on January 1, 2023. The pro forma information is not necessarily indicative of the results of operations that actually would have occurred under the ownership and management of the Company. The figures presented below for the three months ended September 30, 2023 represent the actual results of the Company, as the financial results of CRMS were consolidated in the Company’s results of operations for the entirety of the period. Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023 Revenue $ 186,552,910 $ 428,155,992 Net income 4,630,239 3,093,862 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 and equipment that have been revalued, transaction costs, interest expense and the related tax effects. 5. ABC Transaction and Held for Sale In 2022, the Company started discussions regarding the potential liquidation process of Ambulnz Health, LLC (“Health”) through an assignment for the benefit of creditors (“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 Amb, LLC, a California limited liability company (the “Assignee”). 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 was a claims process. Creditors of Health received notice of the ABC and a proof of claim form and were required to submit a proof of claim in order to participate in distribution of net liquidation proceeds by the Assignee. As of December 31, 2022, Health met the criteria to be classified as held for sale. As a result, the Company was 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 Condensed Consolidated Balance Sheets. The intercompany receivables and intercompany payables were eliminated in the Company’s Condensed Consolidated Balance Sheet as of December 31, 2022. 6. Goodwill The Company recorded an aggregate of $ 8,642,190 in goodwill in connection with its acquisitions in the year ended December 31, 2023. The Company also updated the carrying value of the goodwill in its unaudited Condensed Consolidated Balance Sheets to reflect the foreign currency translation adjustment. The carrying value of goodwill amounted to $ 47,862,242 as of 23 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) September 30, 2024. The changes in the carrying value of goodwill for the nine months ended September 30, 2024 are as noted in the table below: Carrying Value Balance as of December 31, 2023 $ 47,539,929 Foreign currency translation adjustment 322,313 Balance as of September 30, 2024 $ 47,862,242 7. Intangibles Intangible assets consisted of the following as of September 30, 2024 and December 31, 2023: September 30, 2024 Estimated Useful Life (Years) Gross Carrying Amount Additions Accumulated Amortization Net Carrying Amount Computer software 5 years $ 247,828 $ — $ ( 241,191 ) $ 6,637 Operating licenses Indefinite 9,399,004 — — 9,399,004 Internally developed software 4 - 5 years 10,078,087 2,109,239 ( 11,264,266 ) 923,060 Material contracts Indefinite 62,550 — — 62,550 Customer relationships 8 - 9 years 28,337,524 112,260 ( 5,745,054 ) 22,704,730 Trademark 8 - 15 years 427,531 ( 2,942 ) ( 94,029 ) 330,560 Non-compete agreements 5 years 100,000 — ( 30,000 ) 70,000 Trade credits 5 years 1,500,000 — — 1,500,000 $ 50,152,524 $ 2,218,557 $ ( 17,374,540 ) $ 34,996,541 December 31, 2023 Estimated Useful Life (Years) Gross Carrying Amount Additions Accumulated Amortization Net Carrying Amount 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 - 15 years 389,469 38,062 ( 62,141 ) 365,390 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 The intangible assets include an immaterial foreign currency translation adjustment in the amount of $ 29,019 for the nine months ended September 30, 2024. 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. During the nine months ended September 30, 2024, the Company disposed of intangible assets with a cost of $ 1,540 and accumulated amortization of $ 276 . The Company recorded a loss on disposal of intangible assets of $ 1,264 for the nine months ended September 30, 2024. The Company also reclassified certain intangible assets with a cost of $ 30,361 and 24 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) accumulated amortization of $ 8,136 to “legal and regulatory” expenses within the unaudited Condensed Statements of Operations and Comprehensive Income (Loss) . The Company recorded amortization expense of $ 1,605,483 and $ 1,515,378 for the three months ended September 30, 2024 and 2023, respectively. The Company recorded amortization expense of $ 4,884,337 and $ 4,295,958 for the nine months ended September 30, 2024 and 2023, respectively. Future amortization expense at September 30, 2024 for the next five years and in the aggregate are as follows: Amortization Expense 2024, remaining $ 1,003,942 2025 3,838,416 2026 3,334,528 2027 3,315,044 2028 3,288,838 Thereafter 9,254,219 Total $ 24,034,987 8. Accrued Liabilities Accrued liabilities consisted of the following as of September 30, 2024 and December 31, 2023: September 30, 2024 December 31, 2023 Accrued general expenses $ 19,634,415 $ 27,001,232 Accrued workers' compensation and other insurance liabilities 19,349,940 12,881,902 Accrued subcontractors 10,165,705 37,858,755 Accrued payroll 7,460,342 6,464,192 Accrued bonus 2,311,077 4,784,005 Other current liabilities 1,047,127 2,350,523 Total accrued liabilities $ 59,968,606 $ 91,340,609 9. Line of Credit On November 1, 2022, the Company entered into a credit agreement (as amended, 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 November 1, 2027, the five-year anniversary of the closing date. 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. As of December 31, 2023, there was a $ 25,000,000 outstanding balance on the Revolving Facility. The Company drew down an additional $ 15,000,000 on February 8, 2024 under the Revolving Facility. On February 27, 2024, the Company paid the $ 40,000,000 Revolving Facility balance. On March 4, 2024, the Company drew down $ 15,000,000 and made an 25 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) additional $ 15,000,000 draw on March 18, 2024 . As of September 30, 2024, the outstanding balance of the Revolving Facility was $ 30,000,000 and the unused portion of the Revolving Facility was $ 60,000,000 . The Company incurred $ 587,721 and $ 0 in interest charges relating to its Revolving Facility for the three months ended September 30, 2024 and 2023, respectively, and $ 1,625,408 and $ 0 for the nine months ended September 30, 2024 and 2023, respectively, which is reflected in interest (expense) income on the Company’s unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). Standby Letter of Credit On October 20, 2023, the Company obtained an unconditional and irrevocable letter of credit from a financial institution in the amount of $ 1,080,000 . The letter of credit expires on the one-year anniversary of the closing date, or October 20, 2024, and is renewed automatically for successive one-year periods, unless earlier terminated by the institution. As of September 30, 2024 , no am ounts had been drawn. 10. Notes Payable The Company has various loans with finance companies with monthly installments aggregating $ 2,325 , inclusive of interest ranging from 2.5 % through 4.8 %. The loan notes mature at various times through 2026 and are secured by transportation equipment. The following table summarizes the Company’s notes payable: September 30, 2024 December 31, 2023 Equipment and financing loans payable, between 2.5 % and 4.8 % interest and maturing between May 2026 and August 2026 $ 47,710 $ 69,717 Total notes payable 47,710 69,717 Less: current portion of notes payable 26,374 28,131 Total non-current portion of notes payable $ 21,336 $ 41,586 Interest expense was $ 484 and $ 48,794 for the three months ended September 30, 2024 and 2023, respectively. Interest expense was $ 1,912 and $ 110,203 for the nine months ended September 30, 2024 and 2023, respectively. Future minimum annual maturities of notes payable as of September 30, 2024 are as follows: Notes Payable 2024, remaining $ 6,536 2025 26,531 2026 14,643 Total maturities 47,710 Current portion of notes payable ( 26,374 ) Long-term portion of notes payable $ 21,336 11. 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 makers, 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 Mobile Health Services and Transportation Services segments. Previously, these costs had been allocated almost entirely to the Transportation Services segment. All 26 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) of the Company’s revenues and cost 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 assess 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. Operating results for the business segments of the Company are as follows: Mobile Health Services Transportation Services Corporate Total Three Months Ended September 30, 2024 Revenues $ 90,663,433 $ 48,021,381 $ — $ 138,684,814 Income (loss) from operations 21,936,967 ( 75,242 ) ( 11,724,328 ) 10,137,397 Total assets 400,568,190 66,844,610 26,469,739 493,882,539 Depreciation and amortization expense 1,172,458 2,114,380 890,696 4,177,534 Stock compensation 1,237,924 34,123 1,883,139 3,155,186 Long-lived assets 44,590,633 70,488,506 10,159,283 125,238,422 Capital expenditures 640,499 3,054,429 536,262 4,231,190 Three Months Ended September 30, 2023 Revenues $ 139,340,467 $ 47,212,443 $ — $ 186,552,910 Income (loss) from operations 21,109,619 503,687 ( 12,905,351 ) 8,707,955 Total assets 225,084,373 129,796,548 64,903,221 419,784,142 Depreciation and amortization expense 1,193,187 2,333,426 809,654 4,336,267 Stock compensation 274,108 136,472 2,950,129 3,360,709 Long-lived assets 48,554,087 66,160,925 11,305,286 126,020,298 Capital expenditures 1,692,902 3,016,381 783,422 5,492,705 Mobile Health Services Transportation Services Corporate Total Nine Months Ended September 30, 2024 Revenues $ 351,346,919 $ 144,375,140 $ — $ 495,722,059 Income (loss) from operations 80,173,235 ( 1,153,908 ) ( 42,857,414 ) 36,161,913 Total assets 400,568,190 66,844,610 26,469,739 493,882,539 Depreciation and amortization expense 3,556,537 6,256,783 2,748,653 12,561,973 Stock compensation 4,473,099 228,196 5,054,160 9,755,455 Long-lived assets 44,590,633 70,488,506 10,159,283 125,238,422 Capital expenditures 897,284 10,085,457 2,202,787 13,185,528 Nine Months Ended September 30, 2023 Revenues $ 292,351,835 $ 132,690,538 $ — $ 425,042,373 Income (loss) from operations 52,081,169 853,164 ( 49,553,011 ) 3,381,322 Total assets 225,084,373 129,796,548 64,903,221 419,784,142 Depreciation and amortization expense 3,111,497 6,137,364 2,567,796 11,816,657 Stock compensation 573,930 612,077 13,975,840 15,161,847 Long-lived assets 48,554,087 66,160,925 11,305,286 126,020,298 Capital expenditures 28,109,057 16,460,730 3,159,172 47,728,959 27 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 as of September 30, 2024 and December 31, 2023: September 30, 2024 December 31, 2023 Primary Geographical Markets United States $ 104,965,979 $ 103,779,506 United Kingdom 20,272,443 19,863,289 Total long-lived assets $ 125,238,422 $ 123,642,795 Revenues by geographic location are included in Note 2. 12. Equity Unregistered Sales of Equity Securities On July 19, 2024, in connection with the CRMS acquisition, the Company issued $ 1,814,345 in Common Stock, or 578,350 shares, constituting the remainder of the True-up Payment. The True-up Payment was based on CRMS’ attainment of full-year EBITDA targets for 2023 (see Note 4). Share Repurchase Program On May 24, 2022, the Company’s Board of Directors (the “Board of Directors” or the “Board”) authorized a share repurchase program to purchase up to $ 40,000,000 of Common Stock (the “2022 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. The 2022 Program, which did not obligate the Company to repurchase a specific number of shares, expired on November 24, 2023. On January 30, 2024, the Board of Directors authorized a new share repurchase program to purchase up to $ 36,000,000 in shares of Common Stock during a six-month period that ended July 30, 2024 (the “Prior Repurchase Program”). The Prior Repurchase Program did not obligate the Company to repurchase a specific number of shares. On August 5, 2024, following the expiration of the previously authorized share repurchase program on July 30, 2024, the Board effectively extended the Prior Repurchase Program by authorizing a new share repurchase program (the “New Repurchase Program”) on the same terms and conditions as the Prior Repurchase Program other than expiration, pursuant to which the Company may purchase up to $ 26,000,000 in shares of Common Stock, which was the approximate amount remaining under the Prior Repurchase Program at its expiration. The New Repurchase Program expires on December 31, 2024 and may be suspended, extended, modified or discontinued at any time without prior notice. Under the terms of the New 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 New Repurchase Program depends on a variety of factors, including stock price, trading volume, market conditions, corporate and regulatory requirements and other general business considerations. The New Repurchase Program may be modified, suspended or discontinued at any time without prior notice. Repurchases under the New Repurchase Program may be funded from the Company’s existing cash and cash equivalents, future cash flow or proceeds of borrowings or debt offerings. 28 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) During the three months ended September 30, 2024, the Company repurchased and subsequently cancelled 356,113 shares of Common Stock for $ 1,296,187 . There were no shares repurchased during the three months ended September 30, 2023. During the nine months ended September 30, 2024, the Company repurchased and subsequently cancelled 3,007,684 shares of Common Stock for $ 11,078,198 . There were no shares repurchased during the nine months ended September 30, 2023. 13. Stock-Based Compensation Stock Options In 2021, the Company established the DocGo Inc. 2021 Equity Incentive Plan (the “Plan”), which replaced Ambulnz, Inc.’s 2017 Equity Incentive Plan. The Plan initially reserved 16,607,894 shares of 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 2028 and are nontransferable. Stock options granted have a maximum contractual term of 10 years. As of September 30, 2024, approximately 3.9 million employee stock options had vested. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Before the consummation of the Business Combination, the management of Ambulnz took the average of several publicly traded companies that were representative of Ambulnz’ 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 nine months ended September 30, 2024 and 2023: Nine Months Ended September 30, 2024 2023 Risk-free interest rate 4.19 % - 4.54 % 4.10 % - 4.87 % Expected term (in years) 5.57 6.25 Volatility 61 %- 71 %% 52 %- 62 % Dividend yield — % — % The following table summarizes the Company’s stock option activity under the Plan during the nine months ended September 30, 2024: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Balance as of December 31, 2023 11,942,264 $ 7.36 8.16 $ 3,961,556 Granted/vested 278,350 2.54 — — Exercised ( 430 ) 1.59 — — Cancelled ( 4,016,371 ) 7.70 — — Balance as of September 30, 2024 8,203,813 7.06 7.48 1,487,826 Options vested and exercisable as of September 30, 2024 3,910,463 $ 6.66 6.86 $ 1,433,639 29 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) The aggregate intrinsic value in the above table is calculated as the difference between the fair value of the Common Stock price and the exercise price of the stock options. The weighted average grant date fair value per share for stock option grants during the nine months ended September 30, 2024 and the year ended December 31, 2023 was $ 2.54 and $ 7.93 , respectively. For the three months ended September 30, 2024 and 2023, the total recorded stock-based compensation related to stock option awards granted was $ 1,448,151 , and $ 3,027,577 , respectively. For the nine months ended September 30, 2024 and 2023, the total recorded stock-based compensation related to stock option awards granted was $ 4,688,997 and $ 8,787,375 , respectively. On September 30, 2024 and December 31, 2023, the total unrecognized compensation related to unvested stock option awards granted was $ 13,027,394 and $ 29,058,756 , respectively, which the Company expects to recognize over a weighted-average period of approximately 1.49 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 unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) on a straight-line basis over the vesting period for RSUs. The vesting period for employees and members of the Board of Directors ranges from one to four years . Activity under RSUs during the nine months ended September 30, 2024 was as follows: RSUs Weighted- Average Grant Date Fair Value Per RSU Balance as of December 31, 2023 2,424,095 $ 5.61 Granted 1,077,884 2.78 Vested ( 458,923 ) 4.23 Forfeited ( 151,880 ) 4.93 Balance as of September 30, 2024 2,891,176 5.04 Vested and unissued as of September 30, 2024 2,617 10.03 Non-vested as of September 30, 2024 2,888,559 $ 5.04 The total grant-date fair value of RSUs granted during the nine months ended September 30, 2024 was $ 3,780,430 . For the three months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to RSUs of $ 1,426,271 and $ 25,000 , respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense related to RSUs of $ 4,242,065 and $ 1,416,338 , respectively. On September 30, 2024, and December 31, 2023, the total unrecognized compensation related to unvested RSUs granted was $ 11,711,097 and $ 12,602,662 , respectively, which is expected to be recognized over a weighted-average period of approximately 1.8 years. Performance-based Restricted Stock Units The fair value of performance-based restricted stock units (“PSUs”) is determined on the date of grant. The Company records compensation expense in the unaudited Condensed Consolidated Statement of Operations and Comprehensive 30 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Income (Loss) on a straight-line basis over the vesting period for PSUs. The vesting period for PSUs ranges from one to four years . Activity under PSUs during the nine months ended September 30, 2024 was as follows: PSUs Weighted- Average Grant Date Fair Value Per PSU Balance as of December 31, 2023 1,085,270 $ 5.16 Granted — — Vested — — Forfeited — — Performance adjustment ( 217,054 ) — Balance as of September 30, 2024 868,216 5.16 Vested and unissued as of September 30, 2024 — — Non-vested as of September 30, 2024 868,216 $ 5.16 There were no PSUs granted during the three and nine months ended September 30, 2024. For the three and nine months ended September 30, 2024, the Company recorded stock-based compensation expense related to PSUs of $ 280,764 and $ 824,393 , respectively, which are included in accrued liabilities. For the three and nine months ended September 30, 2023, no stock-based compensation expense related to PSUs were recorded. As of September 30, 2024 and December 31, 2023, the total unrecognized compensation related to unvested PSUs granted was $ 3,582,775 and $ 5,527,166 , respectively, which is expected to be recognized over a weighted-average period of approximately 3.2 years. 14. Leases The Company has lease arrangements for properties, vehicles and transportation equipment. Certain leases 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 such determination, the Company considers all relevant economic factors. 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, vehicles and transportation equipment. 31 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Lease Cost The table below comprises lease expenses for the three and nine months ended September 30, 2024 and 2023: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Components of total lease cost: Operating lease expense $ 1,009,108 $ 697,050 $ 2,775,887 $ 2,319,282 Finance lease expense: Amortization of right-of-use assets 1,197,076 1,195,719 3,394,696 2,822,982 Interest on lease liabilities 194,099 135,392 560,926 394,443 Finance lease expense 1,391,175 1,331,111 3,955,622 3,217,425 Short-term lease expense 594,729 452,538 1,484,186 1,156,886 Total lease cost $ 2,995,012 $ 2,480,699 $ 8,215,695 $ 6,693,593 Lease Payments The table below presents lease payments for the three and nine months ended September 30, 2024 and 2023: Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Components of total lease payments: Operating lease payment $ 890,740 $ 697,050 $ 2,669,422 $ 2,319,282 Finance lease payment 1,088,265 782,808 3,118,054 2,293,330 Total lease payments $ 1,979,005 $ 1,479,858 $ 5,787,476 $ 4,612,612 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 2034. 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. Loss on Lease Remeasurement During the year, the Company reassessed the use of some office spaces, resulting in the termination of two leased office spaces. The Company recorded a loss from remeasurement of operating lease of $ 6,163 and $ 13,469 during the three and nine months ended September 30, 2024, respectively. There were no gains or losses recorded relating to remeasurement of operating leases for the three and nine months ended September 30, 2023. 32 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Lease Position as of September 30, 2024 Right-of-use assets and lease liabilities for the Company’s operating leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows: September 30, 2024 December 31, 2023 Assets Lease right-of-use assets $ 12,489,767 $ 9,580,535 Total lease assets $ 12,489,767 $ 9,580,535 Liabilities Current liabilities: Lease liability - current portion $ 3,776,159 $ 2,773,020 Noncurrent liabilities: Lease liability, net of current portion 9,172,259 7,223,941 Total lease liability $ 12,948,418 $ 9,996,961 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 operating leases as of September 30, 2024: Weighted average remaining lease term (in years) - operating leases 3.90 Weighted average discount rate - operating leases 5.83 % Undiscounted Cash Flows Future minimum lease payments under the operating leases as of September 30, 2024 were as follows: Operating Leases 2024, remaining $ 1,109,227 2025 4,412,071 2026 3,604,641 2027 2,391,396 2028 1,765,274 Thereafter 1,277,710 Total future minimum lease payments 14,560,319 Less effects of discounting ( 1,611,901 ) Present value of future minimum lease payments $ 12,948,418 Finance Leases The Company leases vehicles under non-cancellable finance lease agreements with a liability of $ 13,990,018 and $ 11,430,465 as of September 30, 2024 and December 31, 2023, respectively, and accumulated depreciation of $ 9,896,278 and $ 11,679,823 as of September 30, 2024 and December 31, 2023, respectively. 33 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Loss on Lease Remeasurement During the year, the Company returned a number of leased vehicles, resulting in the termination of contract of these leased vehicles. The Company recorded a loss on remeasurement of finance lease of $ 0 and $ 18,583 during the three and nine months ended September 30, 2024, respectively. For the three and nine months ended September 30, 2023, the Company terminated leased vehicles which resulted in a $ 4,834 gain on remeasurement of finance leases. Lease Position as of September 30, 2024 Right-of-use assets and lease liabilities for the Company’s finance leases were recorded in the unaudited Condensed Consolidated Balance Sheets as follows: September 30, 2024 December 31, 2023 Assets Lease right-of-use assets $ 14,605,119 $ 12,003,919 Total lease assets $ 14,605,119 $ 12,003,919 Liabilities Current liabilities: Lease liability - current portion $ 4,435,324 $ 3,534,073 Noncurrent liabilities: Lease liability, net of current portion 9,554,694 7,896,392 Total lease liability $ 13,990,018 $ 11,430,465 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 September 30, 2024: Weighted average remaining lease term (in years) - finance leases 3.45 Weighted average discount rate - finance leases 5.69 % Undiscounted Cash Flows Future minimum lease payments under the finance leases as of September 30, 2024 are as follows: Finance Leases 2024, remaining $ 1,321,296 2025 5,010,486 2026 4,175,450 2027 2,856,492 2028 1,670,204 Thereafter 428,898 Total future minimum lease payments 15,462,826 Less effects of discounting ( 1,472,808 ) Present value of future minimum lease payments $ 13,990,018 34 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 15. Other Income (Expense) The Company recognized $( 1,103,016 ) and $ 449,051 of other income (expense) for the three months ended September 30, 2024 and 2023, respectively, as set forth in the table below. The Company recognized $( 1,837,655 ) and $ 715,589 of other income (expense) for the nine months ended September 30, 2024 and 2023, respectively, as set forth in the table below. Three Months Ended Nine Months Ended September 30, September 30, 2024 2023 2024 2023 Other income (expense) Interest (expense) income, net $ ( 505,085 ) $ 346,376 $ ( 1,387,743 ) $ 1,677,420 Change in fair value of contingent liability ( 44,520 ) 159,974 ( 370,712 ) 159,974 Loss on equity method investments ( 82,742 ) ( 95,503 ) ( 229,923 ) ( 301,362 ) (Loss) gain on remeasurement of operating and finance leases ( 6,163 ) 4,834 ( 32,052 ) 4,834 (Loss) gain on disposal of fixed assets ( 28,681 ) ( 9,983 ) 36,717 ( 163,452 ) ABC litigation — — — ( 1,000,000 ) Other income (expense) ( 435,825 ) 43,353 146,058 338,175 Total other income (expense) $ ( 1,103,016 ) $ 449,051 $ ( 1,837,655 ) $ 715,589 16. 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 $ 412,353 and $ 204,700 for the three months ended September 30, 2024 and 2023, respectively, and $ 1,033,273 and $ 674,970 for the nine months ended September 30, 2024 and 2023, respectively. There were no amounts included in accounts payable and accrued liabilities as of September 30, 2024 and December 31, 2023 related to legal services . Subcontractor Services PrideStaff provides subcontractor services to the Company. PrideStaff is owned by a former operations manager of the Company and his spouse, and therefore, is a related party. The Company made subcontractor payments to PrideStaff totaling $ 7,685 and $ 148,304 for the three and nine months ended September 30, 2024, respectively. There were no payments made for the three and nine months ended September 30, 2023, respectively. Included in accounts payable were $ 1,679 and $ 0 due to related parties as of September 30, 2024 and December 31, 2023, respectively. Included in accrued liabilities were $ 1,679 and $ 0 due to related parties as of September 30, 2024 and December 31, 2023 related to subcontractor services. Transition Services Agreement On October 11, 2023, the Company and Anthony Capone, who resigned as Chief Executive Officer of the Company on 35 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) September 15, 2023, entered into a separation and transition services agreement (the “Transition Agreement”). Pursuant to the Transition Agreement, Mr. Capone served as a consultant to the Company until March 15, 2024 (such period, the “Capone 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 Capone 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 received a monthly consulting fee of $ 45,000 and subsidized premiums for continued group health plan coverage for the duration of the Capone Consulting Period. Mr. Capone did not receive new equity awards or incentive compensation under the Company’s equity incentive compensation program during the Capone 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 Mr. Capone under the Transition Agreement totaling $ 0 and $ 180,000 for the three and nine months ended September 30, 2024, respectively. There were no payments made for the three and nine months ended September 30, 2023 , respectively. Included in accounts payable were $ 0 and $ 45,000 due to related parties as of September 30, 2024 and December 31, 2023, respectively related to this Transition Agreement. There were no amounts included in accrued liabilities as of September 30, 2024 and December 31, 2023 related to the Transition Agreement. Consulting Agreement - Stan Vashovsky On March 7, 2024, the Company entered into a separation and consulting agreement (the “Vashovsky Consulting Agreement”) with Stan Vashovsky, who retired as a director and Chair of the Board effective March 31, 2024. Pursuant to the Vashovsky Consulting Agreement, Mr. Vashovsky will continue to serve as a consultant to the Company until March 31, 2025 (such period, the “Vashovsky Consulting Period”). During the Vashovsky Consulting Period, Mr. Vashovsky will provide advisory services as may be requested from time to time by the Company’s executive officers or the Board of Directors and assist with maintaining the Company’s existing customer and investor relationships and, as consideration for his services, receive an equity grant during each quarter of the Vashovsky Consulting Period having a grant date fair value of approximately $ 35,000 . In consideration for a release of claims, Mr. Vashovsky will also be eligible to receive Company-subsidized healthcare coverage for the duration of the Vashovsky Consulting Period. The Vashovsky Consulting Agreement further acknowledges and affirms that Mr. Vashovsky will be bound by and comply with certain restrictive covenants. The Company granted approximately $ 70,000 in RSUs to Mr. Vashovsky under the Vashovsky Consulting Agreement for the three and nine months ended September 30, 2024. There were no amounts included in accounts payable and accrued liabilities as of September 30, 2024 and December 31, 2023, related to the Vashovsky Consulting Agreement. Consulting Agreement - Steven Katz On September 26, 2024, the Company entered into a transition consulting agreement (the “Katz Consulting Agreement”) with Steven Katz, who resigned as a director and independent Chair of the Board of Directors effective October 1, 2024. Pursuant to the Katz Consulting Agreement, Mr. Katz will serve as a consultant to the Company until December 31, 2024 (the “Katz Consulting Period”). During the Katz Consulting Period, Mr. Katz will provide transition advisory services relating to the Board and its committees as may be requested from time to time by the Company’s executive officers or the Board of Directors. As compensation for his services during the Katz Consulting Period, and subject to his compliance with the Katz Consulting Agreement, Mr. Katz will receive consulting fees in the amount of (i) $ 2,500 per month plus (ii) $ 400 for each hour of services rendered in excess of five hours during each month. During the Katz Consulting Period, Mr. Katz’s equity awards will also continue to vest under the Plan. There were no amounts included in accounts payable and accrued liabilities as of September 30, 2024 and December 31, 2023 related to the Katz Consulting Agreement. 36 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 17. Income Taxes As a result of the Company’s history of net operating losses, the Company had historically provided for a full valuation allowance against its deferred tax assets for assets that were not more-likely-than-not to be realized. The Company’s provision for income taxes for the three months ended September 30, 2024 and 2023 were $ 4,488,828 and $ 4,526,767 , respectively, and $ 13,316,752 and $ 2,041,843 for the nine months ended September 30, 2024 and 2023, respectively. In determining the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate adjusted for discrete items. This rate is based on the Company's expected annual income, statutory tax rates and best estimates of non-taxable and non-deductible income and expense items. 18. 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 September 30, 2024. 19. Legal Proceedings From time to time, the Company may be involved as a defendant in legal actions that arise in the normal course of 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 unaudited Condensed 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 the unaudited Condensed Consolidated Financial Statements. California Labor Actions On March 30, 2023, Paul Lowe v. Rapid Reliable Testing, LLC, et al. was filed in the Los Angeles Superior Court (the “Lowe Action”). The complaint alleges various wage and hour claims on behalf of the plaintiff and a putative class. The complaint also alleges a derivative class claim for violations of California’s Unfair Competition Law and seeks to bring a representative action pursuant to California’s Private Attorneys General Act of 2004 (“PAGA”). In addition, Corielyn Marie Hall v. Rapid Reliable Testing, LLC, et al. involves two separate actions filed in the Los Angeles Superior Court by plaintiff Corielyn Hall (collectively with the Lowe Action, the “California Labor Actions”). The first action is a class complaint filed on December 14, 2023. Similar to the Lowe Action, it alleges various wage and hour claims on behalf of the plaintiff and a putative class and asserts a derivative class claim for violations of California’s Unfair Competition Law. The second action brought by Corielyn Hall was filed on February 20, 2024 and brings claims under PAGA. At the time of this filing, the Company is participating in early mediation with the plaintiffs in the California Labor Actions. Given the overlapping claims and time periods presented in the California Labor Actions, these actions will be mediated concurrently in an effort to reach a global resolution. The Company believes there are substantial defenses to the claims alleged in California Labor Actions. Due to the early stage of these proceedings, the Company cannot reasonably estimate the potential range of loss, if any. The Company intends to vigorously defend itself against these claims if they cannot be resolved during mediation. Stockholder Actions 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 then-Chairman and former Chief Executive Officer, another former Chief Executive Officer, current Chief Financial Officer and former Chief Financial Officer (who currently serves as Executive Vice President of Strategy). On January 17, 2024, the Court appointed the Genesee County Employees’ Retirement System as the Lead Plaintiff. On March 18, 2024, the Lead Plaintiff filed an amended complaint against the Company, its now former 37 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Chairman and Chief Executive Officer, another former Chief Executive Officer and former Chief Financial Officer (who currently serves as Executive Vice President of Strategy). On June 21, 2024, the defendants moved to dismiss the amended complaint. The motion was fully briefed in September 2024. Due to the early stage of this proceeding, the Company cannot reasonably estimate the potential range of loss, if any. The Company disputes the allegations of wrongdoing and intends to defend itself vigorously in this matter. On May 30, 2024 and on July 15, 2024, two purported shareholder derivative actions were filed against certain current and former officers and directors of the Company. The Company is named as a nominal defendant in both actions, and the complaints name the Company’s current board of directors, including its Chief Executive Officer and General Counsel, along with two former Chief Executive Officers, the Company’s Chief Financial Officer and Treasurer and its Executive Vice President of Strategy. These actions were filed by Ryne Shetterly in U.S. District Court for the Southern District of New York (the “Shetterly Action”), and Salma Daboul in the Supreme Court for the State of New York (the “Daboul Action”). Both actions purport to assert claims for breach of fiduciary duty and other related claims on behalf of the Company. Both assert factual allegations substantially similar to those asserted in the securities class action matter discussed above, seeking various forms of monetary and injunctive relief. On August 29, 2024, the U.S. District Court for the Southern District of New York issued an order to transfer the Shetterly Action to the United States District Court for the District of Delaware. At the time of this filing, no defendants have been served in the Shetterly Action. On September 6, 2024, the plaintiff in the Daboul Action voluntarily discontinued the action. Due to the early stage of this proceeding, the Company cannot reasonably estimate the potential range of loss, if any. The Company believes there are substantial defenses to these claims. Cybersecurity Action On August 22, 2024, Maria Ballesteros, individually and on behalf of others similarly situated, filed a complaint against Ambulnz NY, LLC, a subsidiary of the Company (“Ambulnz NY”), in the U.S. District Court for the Southern District of New York arising from a data security incident that the Company experienced in April 2024 (the “Cybersecurity Action”). The Cybersecurity Action alleges negligence, negligence per se, breach of fiduciary duty, breach of implied contract and violations of California’s Unfair Competition Law, the California Privacy Act and the California Consumer Records Act, and seeks various forms of monetary and injunctive relief. At the time of this filing, Ambulnz NY still has time to respond to the complaint and is participating in early mediation with the plaintiff. Due to the early stage of this proceeding, the Company cannot reasonably estimate the potential range of loss, if any. The Company maintains cybersecurity insurance coverage to limit its exposure to losses relating to cybersecurity incidents, including costs arising from litigation such as the Cybersecurity Action. The Company intends to vigorously defend itself against these claims if they cannot be resolved during mediation. 20. Risk and Uncertainties Risks, Impacts and Uncertainties 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. Government Contracts In recent years, the Company’s government contract work has represented a substantial portion of its overall revenue, and maintaining and continuing to grow this revenues stream is an important part of the Company’s growth strategy. However, government contract work is subject to risks and uncertainties. Government contract work subjects the Company to government audits, investigations and proceedings, which could also lead to the Company to being barred from government work or subjected to fines if it is determined that a statute, rule, regulation, policy or contractual provision has been violated. Audits can also lead to adjustments to the amount of contract costs that the Company believes are reimbursable or to the ultimate amount the Company may be paid under the agreement. Furthermore, a loss of government contract work, if not offset by revenues from new or other existing customers, could have a material adverse effect on the Company’s business, financial condition, and results of operations. 38 Table of Contents DocGo Inc. and Subsidiaries NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 21. Subsequent Events Line of Credit On October 20, 2024, the Company’s unconditional and irrevocable letter of credit from a financial institution in the amount of $ 1,080,000 automatically renewed for a one-year period ending October 20, 2025. The letter of credit renews automatically for successive one-year periods, unless earlier terminated by the institution. Effective November 1, 2024, the Company converted its $ 15,000,000 base rate loan under the terms of the Revolving Facility to a 6-month term SOFR loan, maturing on May 1, 2025. Series C Preferred Stock Purchase On November 1, 2024, the Company made a $ 5,000,000 cash payment to Firefly Health, Inc., a Delaware corporation, in exchange for 798,305 shares of Series C preferred stocks, at a purchase price of $ 6.26327 per share. 39 Table of Contents