What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-27 compared with 2024-02-28 · 223 added, 200 removed, 326 unchanged (56% of the section changed)

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

DocGo is a mobile healthcare services company that uses proprietary dispatch and communication technology to help provide quality mobile, in-person medical treatment directly to patients in the comfort of their homes, workplaces and other non-traditional locations;

and medical transportation in major metropolitan cities in the United States and the United Kingdom.

The Company derives revenue primarily from two operating segments:

• Mobile Health Services:

The services offered by this segment 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:

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

Non-emergency transport services include ambulance transports and wheelchair transports.

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

See Item 1, “Business” in this Annual Report for additional information regarding DocGo’s business.

For the year ended December 31, 2023 the Company recorded net income of $10.0 million, compared to net income of $30.7 million and $19.2 million in the years ended December 31, 2022 and 2021, respectively.

Factors Affecting Our Results of Operations

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conditions in the healthcare transportation and mobile health services markets;

changes in government spending on healthcare and other social services;

changes in government spending on healthcare and other social services, including as a result of changes in the U.S.

administration and administrative priorities;

availability of healthcare professionals and other personnel;

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our competitive environment;

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

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

federal government;

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

Unfavorable changes in demographics, healthcare coverage of Mobile Health Services and Transportation Services, interest rates, inflation rates, ambulance manufacturing, a weakening of the national economy or of any regional or local economy in which we operate and other factors beyond our control could adversely affect our business.

Unfavorable changes in demographics, healthcare coverage of Mobile Health Services and Transportation Services, interest rates, inflation rates, the availability of trained and licensed healthcare professionals, ambulance manufacturing, a weakening of the national economy or of any regional or local economy in which we operate and other factors beyond our control could adversely affect our business.

Our Ability to Control Expenses

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

Though the annual inflation rate declined to 4.1% for the full year 2023 from 8.0% in 2022, it remains above historical averages.

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

However, the inflation rate declined throughout most of 2024, and the annual inflation rate declined to 2.9% for the full year 2024 from 4.1% in 2023 and 8.0% in 2022.

The increased inflation rate witnessed between 2021 and 2024 has had an impact on the Company’s expenses in several areas, including wages, fuel and medical and other supplies.

This has had the effect of compressing gross profit margins, as the Company is generally unable to pass these higher costs on to its customers, particularly in the short term.

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

Federal Reserve implemented four interest rate hikes in 2023, raising its benchmark rate to the current level of 5.25-5.50% as of the date of this Annual Report.

Looking into 2024, we anticipate a continued moderation of the inflation rate as a result of these recent interest rate increases, with an annual rate similar to those witnessed in the 2010-2020 period, when the annual inflation rate ranged from 0.1% to 3.2%.

In addition, opportunities to mitigate the impact of inflation are limited, aside from potentially buying more medical supplies than are currently needed in an effort to reduce the volume of future purchases, in instances where supply prices are anticipated to rise.

As inflation has moderated, and in an attempt to stimulate economic growth, the U.S.

Federal Reserve implemented three interest rate cuts in 2024, lowering its benchmark rate to the current level of 4.25-4.50% as of the date of this Annual Report.

Looking into 2025, we anticipate that the inflation rate will remain at or near the currently more moderate level, with an annual rate similar to those witnessed in 2024 and in the 2010-2020 period, when the annual inflation rate ranged from 0.1% to 3.2%.

If inflation is above the levels that the Company anticipates, gross margins could be below plan and our business, operating results and cash flows may be adversely affected.

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

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

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

Historically, we have pursued an acquisition strategy to obtain enhanced capabilities or licenses to offer Mobile Health Services or Transportation Services.

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

During the year ended December 31, 2024, the Company did not complete any acquisitions.

During the year ended December 31, 2023, we completed three acquisitions for an aggregate purchase price of $34.2 million.

During the year ended December 31, 2022, we completed five acquisitions for a purchase price of $69.1 million.

During the year ended December 31, 2021, we completed one acquisition for a purchase price of $2.3 million.

During the year ended December 31, 2022, we completed five acquisitions for an aggregate purchase price of $69.1 million.

The Company derives revenue primarily from two operating segments:

• Mobile Health Services:

• Transportation Services:

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

Non-emergency transport services include ambulance transports and wheelchair transports.

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

See Item 1, “Business” in this Annual Report for additional information regarding DocGo’s business.

For the year ended December 31, 2024 the Company recorded net income of $13.4 million, compared to net income of $10.0 million and $30.7 million in the years ended December 31, 2023 and 2022, respectively.

Investing in R&D and Enhancing our Customer Experience

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In the event that any such change occurs, compliance with new laws and regulations may significantly affect the Company’s operations and cost of doing business.

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

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

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

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

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

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

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

This engagement resulted in incremental transportation revenue.

In addition, in response to the need for widespread COVID-19 testing, EMTs and paramedics, the Company formed a new subsidiary, Rapid Reliable Testing, LLC (“RRT”), with the goal of performing COVID-19 tests at nursing homes, municipal sites, businesses, schools and other venues.

RRT is part of the Mobile Health Services segment.

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

The Company estimates that during 2023, its revenue from COVID-19 related services accounted for less than 1% of total revenues, compared to about 17% in 2022 and nearly 35% in 2021.

The Company’s current business plan assumes increased demand for Mobile Health Services, a demand that was accelerated by the pandemic, but which is also being driven by longer-term 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.

For example, in the second quarter of 2023, the Company began providing services to the recent migrant population in New York City and in upstate New York.

Some of these services were provided pursuant to a contract with an ending date during the second quarter of 2024.

a portion of that contract wa s extended through December 31, 2024, other services began to wind down in May 2024.

The wind-down of all services under such contract was completed in the fourth quarter of 2024.

While the exact timing of the wind-down of the remaining services under other contracts is still unknown, the wind-down of services is underway and the Company expects that the revenues from these migrant-related projects will be significantly lower in 2025 than they were in 2024 and in the second half of 2023.

In addition, government contract work subjects the Company to government audits, investigations and proceedings, which could 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.

Components of Results of Operations

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Cost of Revenues

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

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

We expect cost of revenues to continue to rise as we grow our business.

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

We expect our general and administrative expenses to increase as we continue to scale our business and grow headcount and as a result of operating as a public company, including our

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

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

Depreciation and Amortization

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

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

We expect technology and development expenses to increase in future periods to support our growth, including our intent to continue investing in the optimization,

accuracy and reliability of our dispatch and communication platform and drive efficiency in our operations.

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

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Income from operations 28.7 4.7 % 15.1 2.4 % 13.6 90.1 %

Other (expense) income:

Interest (expense) income, net (1.9) (0.3) % 1.7 0.3 % (3.6) (211.8) %

Change in fair value of contingent liability 9.4 1.5 % 1.4 0.2 % 8.0 571.4 %

Finite-lived intangible asset impairment (8.3) (1.3) % — — % (8.3) (100.0) %

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

Loss on remeasurement of operating and finance leases — — % — — % — — %

Gain (loss) on disposal of fixed assets — — % (0.9) (0.1) % 0.9 100.0 %

Other income (expense) 0.2 — % (0.7) (0.1) % 0.9 128.6 %

Total other (expense) income (0.9) (0.2) % 1.2 0.2 % (2.1) (175.0) %

Net income before income tax expense 27.8 4.5 % 16.3 2.6 % 11.5 70.6 %

(Provision for) benefit from income taxes (14.4) (2.3) % (6.2) (1.0) % (8.2) (132.3) %

Net income 13.4 2.2 % 10.0 1.6 % 3.4 34.0 %

Net (loss) income attributable to noncontrolling interests (6.6) (1.1) % 3.2 0.5 % (9.8) (306.3) %

Net income attributable to stockholders of DocGo Inc.

and Subsidiaries $ 20.0 3.2 % $ 6.9 1.1 % $ 13.1 189.9 %

For the year ended December 31, 2024, total revenues were $616.6 million, a decrease of $7.7 million, or 1.2%, from the total revenues recorded for the year ended December 31, 2023.

Mobile Health Services

For the year ended December 31, 2024, Mobile Health Services revenues were $423.1 million, a decrease of $19.7 million, or 4.4%, as compared with the year ended December 31, 2023.

The decline in revenues was primarily due to the ongoing wind-down of migrant-related services, which had ramped up sharply in the third quarter of 2023 and peaked in the first quarter of 2024.

Starting in the second quarter of 2023, the Company began providing services to the recently arrived migrant population in New York City and in upstate New York.

These projects, which included both medical and non-medical services, such as shelter and security, expanded throughout the third and fourth quarters of 2023 and into the first quarter of 2024.

However, some of these services were provided pursuant to a contract with an ending date during the second quarter of 2024.

A portion of that contract was extended through December 31, 2024, while other services began to wind down in May 2024.

The wind-down of all services under such contract was completed in the fourth quarter of 2024.

While the exact timing of the wind-down of the remaining migrant-related services under other contracts is still unknown, the wind-down of those services is underway and the Company expects that the revenues from any remaining migrant-related projects will be significantly lower in 2025 than they were in 2024.

While we expect to launch new Mobile Health Services projects in 2025 and to expand existing projects, we expect that the Mobile Health Services segment’s revenues will be lower in 2025 than they were in 2024.

Transportation Services

For the year ended December 31, 2024, Transportation Services revenues were $193.5 million, an increase of $12.0 million, or 6.6%, as compared with the year ended December 31, 2023.

This increase was due to a 13.7% increase in trip volumes, from 250,114 trips for the year ended December 31, 2023 to 284,498 trips for the year ended December 31, 2024.

The increase in trip volumes was due to a combination of the expansion in the Company’s customer base in certain core markets, as well as an increase in volumes from existing customers.

Our average trip price decreased slightly from $407 in the year ended December 31, 2023 to $401 in the year ended December 31, 2024.

The decline in the average trip price in the 2024 period reflected a small shift in mix toward markets that have somewhat lower-priced transports when compared to 2023.

However, the average trip price remains well above the levels of 2022 and prior years, reflecting a shift in mix toward higher-priced transports with existing customers, as well as the acquisition of licenses to provide higher acuity transports that earn higher prices per trip.

Cost of revenues

For the year ended December 31, 2024, total cost of revenues (exclusive of depreciation and amortization) decreased by 6.0% compared to the year ended December 31, 2023, while revenues decreased by approximately 1.2%.

Cost of revenues as a percentage of revenues decreased to 65.4% in the year ended December 31, 2024 from 68.7% in the year ended December 31, 2023.

Total cost of revenues in the year ended December 31, 2024 decreased by $25.9 million compared to the year ended December 31, 2023.

This decrease was primarily attributable to a $4.7 million decrease in total compensation, a $24.0 million decrease in subcontracted labor costs, and a $6.9 million decrease in medical and related supplies, all driven by the wind-down of migrant-related projects that began in the second quarter of 2024.

These declines were partially offset by an increase of $3.8 million in vehicle costs, due to the increase in the size of the Company’s fleet and a net increase of $5.9 million across several other cost of revenues categories.

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the year ended December 31, 2024 amounted to $269.3 million, down 12.1% from $306.2 million in the year ended December 31, 2023.

Cost of revenues as a percentage of revenues decreased to 63.6% from 69.1% in the prior year period, despite a decline in revenues, reflecting lower compensation expenses, significantly lower subcontracted labor costs and decreased costs for medical supplies, all reflecting the wind-down in migrant-related projects that began in the second quarter of 2024.

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the year ended December 31, 2024 amounted to $133.7 million, up 9.0% from $122.7 million in the year ended December 31, 2023.

Cost of revenues as a percentage of revenues increased to 69.1% from 67.6% in the prior year, reflecting increased labor costs, subcontractor costs and vehicle costs, due to the continued growth of the business.

Operating expenses

For the year ended December 31, 2024, operating expenses were $184.9 million compared to $180.3 million for the year ended December 31, 2023, an increase of $4.6 million, or 2.6%.

As a percentage of revenues, operating expenses increased from 28.9% in 2023 to 30.0% in 2024.

The increase of $4.6 million related primarily to a $3.7 million increase in professional fees, due to increased legal, accounting and other fees, and a $1.0 million increase in IT infrastructure, driven by the Company’s business expansion, partially offset by a $0.1 million net decrease across a variety of expense categories.

For the Mobile Health Services segment, operating expenses in the year ended December 31, 2024 were $59.8 million, up 6.2% from $56.3 million in the year ended December 31, 2023.

Operating expenses as a percentage of revenues increased to 14.1% from 12.7% in 2023, due to the decrease in Mobile Health Services revenues, and reflecting significant expenditures that were made during 2024 related to the expansion of services and geographic areas of operation, as well as the costs of developing the Company’s programs to provide care-gap closure and other services to members of new insurance provider partners.

For the Transportation Services segment, operating expenses in the year ended December 31, 2024 were $61.8 million, up 12.0% from $55.2 million in the year ended December 31, 2023.

The increase in operating expenses for this segment was driven primarily by higher insurance expense and office expenses, reflecting the expansion of the business.

Operating expenses as a percentage of revenues increased to 31.9% for the year ended December 31, 2024 from 30.4% in the year ended December 31, 2023.

For the Corporate segment, which represents primarily shared services that are not contained within the entities included in either the Mobile Health Services or Transportation Services segments, operating expenses in the year ended December 31, 2024 were $63.3 million, down 8.0% from $68.8 million in the year ended December 31, 2023.

The decrease in operating expenses for this segment was driven by lower compensation costs, due to targeted headcount reductions during the year, partially offset by an increase in professional fees.

Corporate expenses amounted to approximately 10.3% of total consolidated revenues in 2024, compared to 11.0% in 2023.

Interest (expense) income, net

For the year ended December 31, 2024, the Company recorded approximately $1.9 million of interest expense, net compared to $1.7 million of interest income, net in the year ended December 31, 2023.

Interest expenses on borrowings under the Revolving Facility outweighed interest earned on balances in the Company’s interest-bearing accounts in the year ended December 31, 2024.

Prior to October 2023, there were no amounts outstanding under the Company’s line of credit.

Change in fair value of contingent liability

During the year ended December 31, 2024, the Company recorded a change in fair value of contingent liability of approximately $9.4 million, reflecting a reduction in the anticipated payments to be made for an acquisition, based upon performance compared to certain targets.

During the year ended December 31, 2023, the Company recorded a change in fair value of contingent liability of approximately $1.4 million, reflecting a reduction in the anticipated payments to be made for a recent acquisition, based upon performance compared to certain targets.

Finite-lived intangible asset impairment

During the year ended December 31, 2024, the Company recorded finite-lived intangible asset impairment of approximately $8.3 million, relating to the projected value of the customer relationships for Cardiac RMS, LLC, arising from a revised long-term forecast for the business.

During the year ended December 31, 2023, the Company did not record any finite-lived intangible asset impairment.

Loss on equity method investments

During the year ended December 31, 2024, the Company recorded a loss on equity method investments of approximately $0.3 million representing its share of the losses incurred by an entity in which the Company has a minority interest.

During the year ended December 31, 2023, the Company recorded a loss on equity method investments of

approximately $0.3 million representing its share of the losses incurred by an entity in which the Company has a minority interest.

Gain (loss) on disposal of fixed assets

During the year ended December 31, 2024, the Company recorded a gain on disposal of fixed assets of $23,682, compared to a loss on disposal of fixed assets of $0.9 million during the year ended December 31, 2023.

Other income (expense)

During the year ended December 31, 2024, the Company recorded other income of $0.2 million, compared to other expense of $0.7 million during the year ended December 31, 2023.

(Provision for) benefit from income taxes

During the year ended December 31, 2024, the Company recorded a provision for income taxes of $14.4 million compared to an income tax provision of $6.2 million in the year ended December 31, 2023.

The increased tax expense in 2024 was primarily due to the recording of significantly higher pretax income in the 2024 period, as compared to the 2023 period.

Net (loss) income attributable to noncontrolling interests

For the year ended December 31, 2024, the Company had net loss attributable to noncontrolling interests of approximately $6.6 million compared to net income attributable to noncontrolling interests of $3.2 million for the year ended December 31, 2023.

Comparison of Fiscal 2023 with Fiscal 2022

Year Ended December 31, Change

$ in Millions 2023 2022

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

Revenues, net $ 624.3 100.0 % $ 440.5 100.0 % $ 183.8 41.7 %

Cost of revenues 428.9 68.7 % 285.8 64.9 % 143.1 50.1 %

Operating expenses:

General and administrative 137.2 22.0 % 103.4 23.5 % 33.8 32.7 %

Depreciation and amortization 16.4 2.6 % 10.6 2.4 % 5.8 54.7 %

Legal and regulatory 13.1 2.1 % 8.8 2.0 % 4.3 48.9 %

Technology and development 10.9 1.7 % 5.4 1.2 % 5.5 101.9 %

Sales, advertising and marketing 2.8 0.4 % 4.7 1.1 % (1.9) (40.4) %

Total expenses 609.2 97.6 % 418.7 95.1 % 190.5 45.5 %

Income from operations 15.1 2.4 % 21.8 4.9 % (6.7) (30.7) %

Other income:

Interest income (expense), net 1.7 0.3 % 0.8 0.2 % 0.9 112.5 %

Interest income, net 1.7 0.3 % 0.8 0.2 % 0.9 112.5 %

Gain on remeasurement of warrant liabilities — — % 1.1 0.3 % (1.1) (100.0) %

Change in fair value of contingent liability 1.4 0.2 % — — % 1.4 100.0 %

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

(Loss) gain on equity method investments (0.3) (0.1) % — — % (0.3) (100.0) %

Gain on remeasurement of finance leases — — % 1.4 0.3 % (1.4) (100.0) %

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For the year ended December 31, 2023, operating expenses were $180.3 million compared to $132.9 million for the year ended December 31, 2022, an increase of $47.4 million, or 35.7%.

As a percentage of revenues, operating expenses decreased from 30.2% in 2022 to 28.9% in 2023, even as the Company added to its management infrastructure and total compensation increased, due to the significant increase in overall revenues described above.

As a percentage of revenues, operating expenses decreased from 30.2% in 2022 to 28.9% in 2023, even as the Company added to its management infrastructure

and total compensation increased, due to the significant increase in overall revenues described above.

The increase of $47.4 million related primarily to a $27.1 million increase in total compensation, which included costs for both directly employed and subcontracted staff due to investments in and expansion of corporate infrastructure to support the revenue growth, as well as an increase in stock-based compensation expense;

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Change in fair value of contingent liability

During the year ended December 31, 2023, the Company recorded a change in fair value of contingent liability of approximately $1.4 million, reflecting a decline in the anticipated payments to be made for a recent acquisition, based upon

performance compared to certain targets.

There was no related change in fair value recorded in the year ended December 31, 2022.

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During the year ended December 31, 2022, the Company recorded a goodwill impairment of $2.9 million, relating to the Company’s exit from the medical transportation market in California.

Other expense

During the year ended December 31, 2023, the Company recorded other expense of $0.7 million, compared to other expense of $1.0 million during the year ended December 31, 2022.

(Provision for) benefit from income taxes

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The income compared to the prior year period loss reflected improved performance in the Company’s joint venture markets in the year ended December 31, 2023.

Comparison of Fiscal 2022 with Fiscal 2021

Year Ended December 31, Change

$ in Millions 2022 2021

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

Revenues, net $ 440.5 100.0 % $ 318.7 100.0 % $ 121.8 38.2 %

Cost of revenues 285.8 64.9 % 209.0 65.6 % $ 76.8 36.8 %

Operating expenses:

General and administrative 103.4 23.5 % 74.9 23.5 % $ 28.5 38.1 %

Depreciation and amortization 10.6 2.4 % 7.5 2.4 % $ 3.1 40.7 %

Legal and regulatory 8.8 2.0 % 3.9 1.2 % $ 4.9 125.6 %

Technology and development 5.4 1.2 % 3.3 1.0 % $ 2.1 63.6 %

Sales, advertising and marketing 4.7 1.1 % 4.8 1.5 % $ (0.1) (2.4 %)

Total expenses 418.7 95.1 % 303.4 95.2 % $ 115.3 38.0 %

Income from operations 21.8 4.9 % 15.4 4.8 % $ 6.5

Other income:

Interest income (expense), net 0.8 0.2 % (0.8) (0.2) % $ 1.6 200.0 %

Gain on remeasurement of warrant liabilities 1.1 0.3 % 5.2 1.6 % $ (4.1)

Change in fair value of contingent liability — — % — — % $ —

(Loss) on equity method investments — — % (0.1) — % $ 0.1

Gain on remeasurement of finance leases 1.4 0.3 % — — % $ 1.4

Gain on bargain purchase 1.6 0.4 % — — % $ 1.6

Gain from PPP loan forgiveness — — % 0.1 — % $ (0.1)

(Loss) on disposal of fixed assets — — % — — % $ —

Goodwill impairment (2.9) (0.7) % — — % $ (2.9)

Other expense (1.0) (0.2) % — — % $ (1.0)

Total other income 1.0 0.2 % 4.4 1.4 % $ (3.4) (77.3 %)

Net income before benefit from (provision for) income tax 22.8 5.2 % 19.8 6.2 % $ 3.0

Benefit from (provision for) income tax 7.9 1.8 % (0.6) (0.2) % $ 8.5

Net income 30.7 7.0 % 19.2 6.0 % $ 11.5

Net (loss) attributable to noncontrolling interests (3.9) (0.9) % (4.5) (1.4) % $ 0.6 13.3 %

Net income attributable to stockholders of DocGo Inc.

and Subsidiaries $ 34.6 7.9 % $ 23.7 7.4 % $ 10.9

For the year ended December 31, 2022, total revenues were $440.5 million, an increase of $121.8 million, or 38%, from the total revenues recorded in the year ended December 31, 2021.

Mobile Health Services

For the year ended December 31, 2022, Mobile Health Services revenues were $325.9 million, an increase of $91.4 million, or 39%, as compared with the year ended December 31, 2021.

This increase was primarily due to the expansion of the services offered by this segment, particularly with respect to testing, vaccination and other healthcare services revenues.

This expansion accelerated through 2021 and into 2022 as the Company increased its customer base, primarily in the municipal customer segment, and its geographic reach, while extending the terms of and/or expanding the scope of several large customer contracts and introducing a broader range of services.

Compared to the prior year, 2022 featured significantly lower COVID-19 testing revenue, which was outweighed by the substantial increase in other Mobile Health Services, as the Mobile Health Services segment transitioned away from its dependence on COVID-19 related revenue.

COVID-19 testing continued to be a significant driver of Mobile Health Services revenues in the first half of 2022, but dropped sharply in the third quarter of the year, and represented an insignificant proportion of total revenues in the fourth quarter.

Transportation Services

For the year ended December 31, 2022, Transportation Services revenues were $114.6 million, an increase of $30.3 million, or 36%, as compared with the year ended December 31, 2021.

This increase was due to a 20% increase in trip volumes, from 180,753 trips for the year ended December 31, 2021 to 216,009 trips for the year ended December 31, 2022.

The increase in trip volumes was due to a combination of growth in the customer base in certain core markets, entry into new markets in 2021 and early 2022 and acquisitions made during the second half of 2022.

Our average trip price increased from $301 in the year ended December 31, 2021 to $380 in the year ended December 31, 2022.

The increase in the average trip price in 2022 reflected a shift in mix toward higher-priced transports with existing customers, as well as the acquisition of licenses to provide higher acuity transports resulting in higher prices per trip.

The average trip price also benefited from a 5.1% increase in the average Medicare reimbursement rate for ambulance transports.

Cost of Revenues

For the year ended December 31, 2022, total cost of revenues (exclusive of depreciation and amortization) increased by 37%, as compared to the year ended December 31, 2021, while revenues increased by approximately 38%.

Cost of revenues as a percentage of revenues decreased to 64.9% in 2022 from 65.5% in 2021.

In absolute dollar terms, cost of revenues in the year ended December 31, 2022 increased by $76.8 million from the levels of the year ended December 31, 2021.

This was primarily attributable to a $64.9 million increase in total compensation, due to higher headcount for both the Transportation Services and Mobile Health Services segments;

a $16.0 million increase in subcontracted labor, driven mostly by the Mobile Health Services segment, where the Company did not have sufficient personnel to staff the initial phases of large new projects;

$13.6 million increase in vehicle costs, driven by a continued increase in the Company’s vehicle fleet and higher fuel and maintenance costs, as well as costs incurred to rent vehicles to provide Mobile Health Services;

a $2.1 million increase in travel costs, due to field personnel and other clinicians who traveled out of their home regions to provide Mobile Health Services;

a $0.4 million increase in facilities and related costs;

and approximately $2.6 million in increases across a variety of other cost of revenues categories relating to the Company’s increased scale and geographic presence.

These items were partially offset by a $21.1 million decrease in lab fees related to COVID-19 testing activity, reflecting sharply lower COVID-19 testing activity in the second half of 2022, lower per-test lab fees and a shift toward rapid tests;

and a $1.8 million decline in medical supplies, reflecting a decline in COVID-19 testing activity and improved sourcing of various supplies.

For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the year ended December 31, 2022 amounted to $199.2 million, compared to $145.2 million in the year ended December 31, 2021.

Cost of revenues as a percentage of revenues decreased slightly to 61.1% from 61.9%, due to the increase in revenues and

the continued shift away from higher-cost subcontracted labor toward Company personnel during 2022, which was partially offset by higher compensation costs associated with some of the Company’s newer projects.

For the Transportation Services segment, cost of revenues (exclusive of depreciation and amortization) in the year ended December 31, 2022 was $86.5 million, an increase of $23.1 million, or 36%, from the year ended December 31, 2021.

Cost of revenues as a percentage of revenues were essentially unchanged, at 75.5% in 2022 compared to 75.3% in 2021.

Increased volumes and higher average trip prices, as described above, combined with lower average hourly wages, as recent market wage pressures began to subside and the Company more effectively managed its staff to reduce overtime hours for field employees, to offset the effects of increased fuel costs.

Fuel prices moderated somewhat during the third quarter and in the fourth quarters of 2022, but the full-year average fuel price for 2022 was approximately 29% above the full-year average for 2021.

We anticipated that fuel prices would remain at elevated levels for 2023, but we expected that the full-year average for 2023 would be lower than it was in 2022.

Operating Expenses

For the year ended December 31, 2022, operating expenses were $132.9 million compared to $94.4 million for the year ended December 31, 2021, an increase of 41%.

As a percentage of revenues, operating expenses increased slightly, from 29.6% in 2021 to 30.2% in 2022, despite the significant increase in overall revenues described above, as the Company continued to add to its management infrastructure and incurred a full year’s worth of expenses relating to its status as a public company.

The increase of $38.3 million related primarily to a $20.1 million increase in total compensation, which includes salaries, benefits, bonuses and commissions for both direct and subcontracted labor, reflecting higher headcount driven by the Company’s overall growth and expansion;

a $7.1 million increase in legal, accounting and other professional fees related to increased revenues and related contract generation and SEC filing-related costs;

a $2.8 million increase in insurance costs reflecting the growth and expansion of the Company, as well as the addition of directors and officers (D&O) insurance in 2022;

a $3.2 million increase in depreciation and amortization charges due to an increase in assets to support revenue growth and capitalized software amortization, including from recently acquired companies;

a $2.3 million increase in rent utility expenses due to the Company’s ongoing growth and geographic expansion;

a $2.9 million increase in IT infrastructure, driven by the Company’s business and headcount expansion;

and a $0.6 million increase in marketing expenses, driven in part by expenditures made to develop and expand the Company’s direct-to-consumer offering and other Mobile Health Services.

These items were partially offset by a $0.7 million decline witnessed across several operating expense categories, such as travel, commissions and general office expenses.

For the Mobile Health Services segment, operating expenses in the year ended December 31, 2022 were $58.0 million, up 25% from operating expenses of $46.3 million in the year ended December 31, 2021.

Operating expenses as a percentage of revenues decreased to 17.8% from 19.8% in 2021, due to the increase in Mobile Health Services revenues, which outweighed the effect of the significant expenditures that were made in 2022 in the expansion of services and geographic areas of operation, as well as the continued buildout of the Mobile Health Services management infrastructure and the costs of developing the Company’s “on-demand” direct-to-consumer offering.

For the Transportation Services segment, operating expenses in the year ended December 31, 2022 were $74.0 million, up $26.6 million, or 56%, from the year ended December 31, 2021.

Operating expenses as a percentage of revenues increased to 64.6% from 56.3% in 2021, despite the increase in revenues, primarily due to increases in the Company’s corporate overhead expenditures, as described above, as these expenses were allocated to the Transportation Services segment for purposes of segment reporting.

Operating expenses for the Transportation Services segment were also driven higher by the inclusion of the acquisitions the Company made in the second half of 2022.

Interest Income (Expense), Net

For the year ended December 31, 2022, the Company recorded $0.8 million of interest income, net compared to $0.8 million of interest expense, net in the year ended December 31, 2021.

This was due to a significantly higher amount of interest earned during 2022, resulting from an increase in the Company’s cash balances in income-bearing accounts, coupled with higher rates of interest earned on balances in these accounts, which reflected significantly higher market interest rates.

Gain on Remeasurement of Warrant Liabilities

During the year ended December 31, 2022, the Company recorded a net gain of approximately $1.1 million from the remeasurement of warrant liabilities.

The warrants were marked-to-market in each reporting period, and this gain

reflected the decrease in DocGo’s stock price relative to the beginning of the period.

During the year ended December 31, 2021, the Company recorded a net gain of $5.2 million on the remeasurement of warrant liabilities.

On August 15, 2022, the Company announced the redemption of all of its outstanding warrants under the Warrant Agreement, dated as of October 14, 2020, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, on the redemption date of September 16, 2022 (the “Redemption Date”).

Warrants surrendered for exercise on a cashless basis resulted in the issuance of 1,406,371 shares of Common Stock.

A total of 68,514 warrants were not surrendered on the Redemption Date and were redeemed for $0.10 per warrant.

Gain on Equity Method Investments

During the year ended December 31, 2022, the Company recorded a gain on equity method investments of $8,919, representing its share of the losses incurred by an entity in which the Company has a minority interest, which is accounted for under the equity method.

This investment was made in the fourth quarter of 2021, during which period a loss of $66,818 was recorded in relation to this equity method investment.

Gain on Bargain Purchase

During the year ended December 31, 2022, the Company recorded a gain on bargain purchase of approximately $1.6 million in relation to an acquisition made during the fourth quarter of the year, wherein the tangible net asset value of the acquired entity exceeded the purchase price.

No such gain or loss was recorded during the same period in 2021.

Gain on Remeasurement of Finance Leases

During the year ended December 31, 2022, the Company recorded a gain on remeasurement of finance leases of approximately $1.4 million, resulting from a change in estimated remaining liabilities under the terms of its leases.

No such gain or loss was recorded in the same period in 2021.

Gain from PPP Loan Forgiveness

In 2021, the Company recorded a $0.1 million gain due to the forgiveness of a loan that one of its subsidiaries had obtained via the government’s Paycheck Protection Program (“PPP”) in 2020.

No gain from loan forgiveness was recorded during the year ended December 31, 2022.

Benefit From (Provision For) Income Taxes

During the year ended December 31, 2022, the Company recorded a benefit from income taxes of $7.9 million compared to a provision for income taxes of $0.6 million in the year ended December 31, 2021.

The tax benefit in 2022 was due to the release of the valuation allowance recorded in previous years for net operating losses, as the Company determined that it was more likely than not that it would be able to realize its net operating loss carryforwards in the future.

Net Loss Attributable to Noncontrolling Interests

For the year ended December 31, 2022, the Company had a net loss attributable to noncontrolling interests of approximately $3.8 million compared to a net loss attributable to noncontrolling interests of $4.6 million for the year ended December 31, 2021.

For both periods, the loss reflected ongoing investments in new markets that were entered into during 2021 and 2022, partially offset by income generated by those markets.

Liquidity and Capital Resources

Between the inception of DocGo’s wholly owned subsidiary Ambulnz and the Business Combination, Ambulnz completed three equity financing transactions as its principal source of liquidity.

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

In November 2021, upon the completion of the Business Combination and the private placement of Common Stock that closed concurrently with the Business Combination, the Company received proceeds of approximately $158.1 million, net of transaction expenses.

Generally, the Company has utilized proceeds from the equity financing transactions and the Business Combination to finance operations, invest in assets, make acquisitions and fund accounts receivable.

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Despite the fact that the Company generated positive net income for the year ended December 31, 2024 , operating cash flows are not always sufficient to meet immediate obligations arising from current operations.

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

cash balances to fund working capital needs.

During the year ended December 31, 2023, as a greater proportion of the Company’s overall revenues were generated through services provided to municipal customers with long payment cycles, and expenditures made by the Company to allow for the provision of these services were substantial, operating cash flows were not sufficient to meet these demands for working capital, leading to a marked decline in the Company’s cash balances.

During the year ended December 31, 2024 , as a greater proportion of the Company’s overall revenues were generated through services provided to municipal customers with long payment cycles, and expenditures made by the Company to allow for the provision of these services were substantial, operating cash flows were not sufficient to meet these demands for working

capital, leading to a marked decline in the Company’s cash balances.

As these invoices are collected, the Company expects cash flows to be sufficient for near term working capital needs.

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

This last factor was evident during the second half of 2023, leading to a draw down in the Company’s credit line during the fourth quarter of 2023 and the first quarter of 2024, as described below.

This last factor has been evident at different times during the second half of 2023 and during the first quarter of 2024, leading to a draw down in the Company’s credit line during the fourth quarter of 2023 and during the first quarter of 2024, as described below.

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

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

On October 19, 2023, the Company drew down $25 million under the Revolving Facility, which amount remained outstanding as of December 31, 2023.

In February 2024, the Company repaid all amounts outstanding under the Revolving Facility, and no amounts are outstanding as of the date of this Annual Report.

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

On February 8, 2024, the Company drew down an additional $15.0 million.

On February 27, 2024, the Company repaid all amounts then outstanding under the Revolving Facility.

However, in March 2024, the Company once again drew down under the Revolving Facility, and there was a total of $30.0 million outstanding under the Revolving Facility as of the date of this Annual Report.

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

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Capital Resources

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

Working capital as of December 31, 2024 and 2023 was as follows:

December 31, Change

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Total working capital $ 182.7 $ 168.8 $ 13.9 8.2 %

As of December 31, 2023, available cash totaled $59.3 million, which represented a decrease of $98.0 million compared to December 31, 2022, reflecting a significant increase in accounts receivable and acquisitions made during the year ended December 31, 2023.

As of December 31, 2023, working capital amounted to $168.8 million, which represented a decrease of $2.2 million compared to December 31, 2022, which reflected the decreased cash balance in 2023.

Increased accounts receivable, which reflected the growth of the business and a shift towards higher credit quality customers who have longer payment cycles in 2023, were outweighed by the increase in current liabilities, which reflected the growth of

the business and amounts due to seller and contingent consideration resulting from acquisitions, as well as the draw down of $25 million under the terms of the Revolving Credit Facility.

As of December 31, 2024, available cash totaled $89.2 million, which represented an increase of $30.0 million compared to December 31, 2023, reflecting a decline in accounts receivable during the year ended December 31, 2024, as the Company collected some of its larger invoices.

As of December 31, 2024, working capital amounted to $182.7 million, which represented an increase of $13.9 million compared to December 31, 2023, as an increase in cash and a decline in accrued liabilities outweighed a decline in accounts receivable.

Despite the increase in cash, current assets declined by $34.4 million, due to a drop in accounts receivable and in prepaid expenses.

However, this was outweighed by the decline in current liabilities in the year ended December 31, 2024, due to lower accrued liabilities, reflecting lower invoices and accrued liabilities in the current period for certain expenses, such as subcontracted labor, and as the Company paid down a significant amount of its accrued liabilities during the year-to-date period.

Current liabilities also declined due a decrease in

contingent consideration, reflecting a reduction in anticipated payments to be made for a recent acquisition, which is based upon performance compared to certain targets.

Cash flows as of the years ended December 31, 2024 and 2023 were as follows:

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Cash flow summary

Net cash (used in) provided by operating activities $ (64.2) $ 28.9 $ (93.1) (322.1 %)

Net cash provided by (used in) operating activities $ 70.3 $ (64.2) $ 134.5 209.5 %

Net cash used in investing activities (10.9) (29.9) 19.0 63.5 %

Net cash provided by (used in) financing activities 1.1 (6.2) 7.3 (117.7 %)

Net cash (used in) provided by financing activities (24.1) 1.1 (25.2) (2290.9) %

Effect of exchange rate changes (0.2) 1.1 (1.3) (118.2) %

Net decrease in cash $ (91.9) $ (15.0) $ (76.9) 512.7 %

Net increase in cash $ 35.1 $ (91.9) $ 127.0 138.2 %

Cash flows as of the years ended December 31, 2023 and 2022 were as follows:

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Cash flow summary

Net cash provided by (used in) operating activities $ 28.9 $ (1.9) $ 30.8 1621.1 %

Net cash (used in) provided by operating activities $ (64.2) $ 28.9 $ (93.1) (322.1) %

Net cash used in investing activities (29.9) (38.4) 8.5 22.1 %

Net cash (used in) provided by financing activities (6.2) 155.2 (161.4) (104.0 %)

Net cash provided by (used in) financing activities 1.1 (6.2) 7.3 117.7 %

Effect of exchange rate changes 1.1 0.7 0.4 57.1 %

Net (decrease) increase in cash $ (15.0) $ 144.7 $ (159.7) (110.4 %)

Net decrease in cash $ (91.9) $ (15.0) $ (76.9) (512.7) %

Operating Activities

During the year ended December 31, 2024, cash provided by operating activities was $70.3 million, aided by net income of $13.4 million.

Non-cash charges amounted to $37.4 million, which primarily consisted of $10.2 million in depreciation of property and equipment and right-of-use assets, $5.7 million from amortization of intangible assets, $13.6 million of stock compensation expense, $5.2 million in bad debt expense, an $8.3 million impairment of a finite-lived intangible asset, $3.5 million in deferred taxes and a loss of $0.3 million from an investment that is accounted for under the equity method.

These were partially offset by a non-cash gain of $9.4 million resulting from a reduction in the fair value of contingent consideration.

Changes in assets and liabilities resulted in approximately $19.5 million in positive operating cash flow, as a $41.3 million decrease in accounts receivable, reflecting collections of invoices from large municipal customers, an $8.5 million increase in accounts payable and a $13.0 million decrease in prepaid expenses were partially offset by a $41.9 million decrease in accrued liabilities and a $1.4 million increase in other assets.

During the year ended December 31, 2023, cash used by operating activities was $64.2 million, despite net income of $10.0 million.

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These charges were partially offset by non-cash gains of $1.4 million relating to the remeasurement of finance lease liabilities, $1.1 million from the remeasurement of warrant liabilities, $1.6 million in a gain on a bargain purchase and $9.9 million in the realization of a deferred tax asset.

Changes in assets and liabilities resulted in an approximately $13.2 million decrease to operating cash flow, as an $8.4 million increase in accounts receivable, a $4.2 million increase in prepaid

expenses and a $6.0 million decrease in accrued liabilities outweighed the effect of a $1.8 million decrease in other assets and a $3.6 million increase in accounts payable.

During the year ended December 31, 2021, cash used in operating activities was $1.9 million, despite net income of $19.2 million.

Non-cash charges amounted to $7.7 million, as $5.2 million in depreciation of property and equipment and right-of-use assets, $1.8 million from amortization of intangible assets, $4.5 million in bad debt expense primarily related to a provision for potential uncollectible accounts receivable and $1.4 million of stock compensation expense were partially offset by $5.2 million in a non-cash gain on the remeasurement of warrant liabilities.

Changes in assets and liabilities resulted in an approximately $28.8 million decrease in operating cash flow and were primarily driven by a $57.1 million increase in accounts receivable arising from the growth of the business, particularly in the fourth quarter of the year, and the inclusion of larger Mobile Health Services customers with extended credit terms, and a $3.5 million increase in prepaid expenses and other current assets, partially offset by a $32.6 million increase in accounts payable and accrued expenses due primarily to the extension of credit and timing of payments, as DocGo attempted to align the timing of payments to vendors with the timing of payments received from customers, where possible, in an attempt to manage cash balances.

Changes in assets and liabilities resulted in an approximately $13.2 million decrease to operating cash flow, as an $8.4 million increase in accounts receivable, a $4.2 million increase in prepaid expenses and a $6.0 million decrease in accrued liabilities outweighed the effect of a $1.7 million decrease in other assets and a $3.6 million increase in accounts payable.

Investing Activities

During the year ended December 31, 2024, investing activities used $10.9 million of cash and consisted of the acquisition of property and equipment totaling approximately $3.8 million, the acquisition of intangibles in the amount of $2.0 million, an investment in equity securities in the amount of $5.0 million and an equity method investment in the amount of $0.3 million, partially offset by $0.2 million in cash proceeds from the disposal of property and equipment.

During the year ended December 31, 2023, investing activities used $29.9 million of cash and consisted of the acquisition of property and equipment totaling approximately $7.6 million, the acquisition of intangibles in the amount of $2.5 million, the acquisition of businesses in the amount of $20.2 million and an equity method investment in the amount of $0.3 million, partially offset by $0.7 million in cash proceeds from the disposal of property and equipment.

During the year ended December 31, 2022, cash used in investing activities was $38.4 million and consisted of the acquisition of property and equipment totaling approximately $3.2 million, the acquisition of intangibles in the amount of $2.3 million and the acquisition of businesses in the amount of $33.0 million, primarily relating to acquisitions the Company completed in the third and fourth quarters of 2022.

During the year ended December 31, 2021, cash used in investing activities was $8.6 million, primarily consisting of the acquisition of property and equipment totaling $4.8 million and the acquisition of businesses and intangibles totaling $3.1 million to support the ongoing growth of the business.

In addition, the Company made an equity investment amounting to approximately $0.7 million.

Financing Activities

During the year ended December 31, 2024, cash used by financing activities was $24.1 million, as $45.0 million in proceeds from the Company’s Revolving Facility were outweighed by $40.0 million of repayments of amounts outstanding under the Company’s Revolving Facility, $13.8 million in stock repurchases, $4.3 million in payments under the terms of a finance lease, $3.6 million in earnout payments on contingent liabilities, a $3.1 million decrease in amounts due to seller, $1.8 million paid for the acquisition of a non-controlling interest, $1.3 million in payments of dividends to non-controlling interests and $1.2 million in payments for taxes related to shares withheld for employee taxes.

During the year ended December 31, 2023, cash provided by financing activities was $1.1 million, including $25.0 million in proceeds from the Company’s Revolving Facility and $1.6 million in proceeds from the exercise of stock options, mostly offset by $4.3 million in payments under the terms of a finance lease, a $13.6 million decrease in amounts due to seller, $5.3 million in earnout payments on contingent liabilities and $2.3 million in payments for taxes related to shares withheld for employee taxes.

During the year ended December 31, 2022, cash used in financing activities was $6.2 million, including $3.7 million in the repurchase of Common Stock, $3.0 million in payments under the terms of a finance lease, a $2.5 million decrease in amounts due to seller and $0.9 million in repayments of notes payable, which were partially offset by $2.1 million in non-controlling interest contributions and $2.0 million in proceeds from the exercise of stock options.

During the year ended December 31, 2021, cash provided by financing activities was $155.2 million, due primarily to $158.1 million in proceeds from the issuance of Common Stock in connection with the Business Combination, which is net of $20.0 million in issuance costs.

This was slightly offset by $2.2 million in payments on obligations under the terms of a finance lease and $0.5 million in expenditures to acquire the remaining 20% of the Company’s U.K.

During 2021, the Company received $8.0 million in proceeds from a revolving bank loan, which was repaid during the fourth quarter of 2021.

Future minimum annual maturities of notes payable as of December 31, 2024 are as follows (in thousands):

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Noncontrolling interests on the Consolidated Balance Sheets represents the portion of consolidated joint ventures and a variable interest entity (“VIE”) in which the Company does not have direct equity ownership.

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

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 of common stock and corresponding capital amounts and earnings per share available for common stockholders, prior to the Business Combination, have been retroactively restated as shares of the Company, reflecting the exchange ratio (645.1452 to 1) established in the Business Combination.

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

as such, the acquisition is considered to be a business combination under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations and was accounted for using the acquisition method of accounting.

Principles of Consolidation

In accordance with ASC 810, Consolidation (“ASC 810”), the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are VIEs.

In accordance with Accounting Standards Codification (“ASC”) 810, Consolidation (“ASC 810”), the Company assesses whether it has a variable interest in legal entities in which it has a financial relationship and, if so, whether or not those entities are 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 in order to provide services to the Company.

These entities are considered VIEs since they do not have sufficient equity to finance their activities without additional subordinated financial support.

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

The Company has the power and rights to control all activities of its VIEs and funds and absorbs all losses of its VIEs.

The Company has determined that it is the primary beneficiary of its VIEs and therefore appropriately consolidates its VIEs.

The Company has entered into management services agreements (“MSAs”) with professional corporations (“PCs”) that employ or contract with physicians and other health professionals in order to provide healthcare services to the public.

Each such PC is established and operated pursuant to the requirements of its respective domestic jurisdiction governing the practice of medicine.

The Company provides each PC with everything the PC needs to operate except for clinicians, which the PC is responsible for.

Without the administrative services, software, intellectual property and administrative personnel (among other things) provided by the Company, the PCs could not carry out their businesses.

Moreover, the PCs do not have sufficient equity to finance their activities without additional subordinated financial support.

Based on the foregoing, these entities are considered VIEs, and 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).

In accordance with corporate practice of medicine restrictions, all clinical treatment decisions are made solely by licensed healthcare professionals engaged by the PCs.

Nevertheless, the PCs cannot operate without the Company through the MSAs;

therefore, the Company significantly impacts the economic performance of the PCs and funds and absorbs all losses of its PCs.

The Company has therefore determined that it is the primary economic beneficiary of the PCs and appropriately consolidates them as VIEs.

Net loss for the Company’s VIEs were $231,952, $235,976 and $373,456 for the years ended December 31, 2024, 2023 and 2022, respectively.

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The Company’s VIEs total stockholders’ deficit were $679,535 and $447,583 on December 31, 2024 and 2023, respectively.

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.

Fair Value of Financial Instruments

ASC 820, Fair Value Measurements , provides guidance on the development and disclosure of fair value measurements.

Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability.

The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes:

Quoted prices in active markets for identical assets or liabilities.

Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace.

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

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2024, 2023 and 2022 .

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

The notes payable are presented at their carrying value, which, based on borrowing rates currently available to the Company for loans with similar terms, approximates its fair values.

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

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

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 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 ASC 326, Measurement of Credit Losses on Financial Instruments , 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 $4,384,866 and write offs of $(4,787,379) during the year.

The Company’s balance in its allowance for credit losses amounted to $5,873,942 as of December 31, 2024 .

Business Combinations

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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.

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:

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These assumptions may vary based on future events, perceptions of different market participants and other factors outside the control of management, and such variations may be significant to estimated values.

Impairment of Long-Lived Assets

The Company evaluates the recoverability of the recorded amount of long-lived assets, primarily property and equipment and finite-lived intangible assets, whenever events or changes in circumstance indicate that the recorded amount of an asset may not be fully recoverable.

An impairment is assessed when the undiscounted expected future cash flows derived from an asset are less than its carrying amount.

If an asset is determined to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value.

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

Goodwill and Indefinite-Lived Intangible Assets

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

What changed 10-K

Item 7. Management’s Discussion and Analysis