DocGo Inc. 10-K

Item 8. Financial Statements and Supplementary Data. 76 Table of Contents DocGo Inc. and Subsidiaries Index to the Consolidated Financial Statements Reports of Independent Registered Public Accounting Firm (PCAOB ID: 1013 ) F- 2 Consolidated Balance Sheets as of December 31, 202 4 and 20 2 3 F- 5 Consolidated Statements of Operations and Comprehensive Income for the Years Ended December 31, 202 4 , 202 3 and 20 22 F- 6 Consolidated Statements of Changes in Stockholders’ Equity for the Years Ended December 31, 202 4 , 202 3 and 20 2 2 F- 7 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 4 , 202 3 and 2 022 F- 8 Notes to Consolidated Financial Statements F- 10 F-1 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors DocGo Inc. and Subsidiaries New York, New York Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of DocGo Inc. and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 , in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated February 27, 2025 expressed an unqualified opinion thereon. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Loss allowance for Accounts Receivable As described in Note 2 to the consolidated financial statements, the Company recorded consolidated accounts receivable of approximately $210.9 million net of a loss allowance of approximately $5.9 million at December 31, 2024. The allowance is management’s estimate of loss allowance on accounts receivable after considering quantitative and qualitative factors, applied for accounts receivables without a significant financing component by using a loss provision. Management makes periodic as well as individual assessments on the recoverability of accounts receivables based on customer historical credit loss experience, and where necessary, adjusted for information based on macroeconomic factors affecting the ability of its customers to settle the accounts receivables. Accounts receivables from customers with known financial difficulties or with significant doubt on collection of receivables are assessed individually for a loss allowance. Management assesses other customers by grouping them based on shared credit risk characteristics including geographical location, service type and payor. F-2 Table of Contents The principal considerations for our determination that performing procedures relating to the loss allowance for accounts receivables is a critical audit matter are the significant judgment by management in determining the loss allowance for accounts receivable as influenced by qualitative factors in particular, which led to a high level of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence obtained. The primary procedures we performed to address this critical audit matter included: • Testing the effectiveness of controls relating to the loss allowance for trade receivables. • Testing management’s process included (i) evaluating the appropriateness of the methodology and models; (ii) testing the completeness and accuracy of certain data used in the estimate; (iii) evaluating management’s process to identify customers with known financial difficulties; and (iv) evaluating the reasonableness of significant assumptions and judgments made by management to estimate the loss allowance for accounts receivable, including the grouping of accounts receivables based on type of service and historical collections. Revenue Recognition – Transport Services As described in Note 2 to the consolidated financial statements, the Company recorded transport services revenue of approximately $193.4 million. Transport revenues are recorded net of estimated contractual allowances for claims subject to contracts with responsible paying entities. The Company estimates contractual allowances at the time of billing based on contractual terms and historical collections by each payor and geographical location. The principal considerations for our determination that performing procedures relating to the transport revenue is a critical audit matter are the significant judgements by management in determining the lookback periods of historical collections which led to a high level of auditor judgment, subjectivity, and effort in performing procedures. The primary procedures we performed to address this critical audit matter included: • Testing the effectiveness of controls relating to transport services revenue recognition. • Testing the Company’s process included (i) selected a sample of transactions and verified the transport service has been performed (ii) obtained supporting cash collections for a sample of transactions (iii) obtained the Company’s historical collections for recent completed services, verified the receipts and recalculated the applied historical rate to the recorded revenue (iv) obtained the Company’s historical collections and verified these collections to ensure appropriate reserves for unpaid, open services. /s/ Urish Popeck & Co., LLC We have served as the Company’s auditor since 2021. Pittsburgh, PA February 27, 2025 F-3 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors DocGo Inc. and Subsidiaries New York, New York Opinion on Internal Control over Financial Reporting We have audited DocGo Inc. and Subsidiaries’ (the “Company’s”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria . We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of DocGo Inc. and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”) and our report dated February 27, 2025 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Item 9A, Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Urish Popeck & Co., LLC Pittsburgh, PA February 27, 2025 F-4 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED BALANCE SHEETS December 31, 2024 2023 ASSETS Current assets: Cash and cash equivalents $ 89,241,695 $ 59,286,147 Accounts receivable, net of allowance for credit loss of $ 5,873,942 and $ 6,276,454 as of December 31, 2024 and December 31, 2023, respectively 210,899,926 262,083,462 Prepaid expenses and other current assets 4,344,642 17,499,953 Total current assets 304,486,263 338,869,562 Property and equipment, net 14,881,411 16,835,484 Intangibles, net 25,728,813 37,682,928 Goodwill 47,432,550 47,539,929 Restricted cash 18,095,612 12,931,839 Operating lease right-of-use assets 11,958,698 9,580,535 Finance lease right-of-use assets 15,337,299 12,003,919 Investments 5,547,979 553,573 Deferred tax assets 8,422,034 11,888,539 Other assets 3,730,473 2,565,649 Total assets $ 455,621,132 $ 490,451,957 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 28,356,430 $ 19,827,258 Accrued liabilities 49,896,796 91,340,609 Line of credit 30,000,000 25,000,000 Notes payable, current 12,515 28,131 Due to seller 28,656 7,823,009 Contingent consideration 4,973,152 19,792,982 Operating lease liability, current 3,844,561 2,773,020 Finance lease liability, current 4,694,467 3,534,073 Total current liabilities 121,806,577 170,119,082 Notes payable, non-current 5,215 41,586 Operating lease liability, non-current 8,599,072 7,223,941 Finance lease liability, non-current 10,031,138 7,896,392 Total liabilities 140,442,002 185,281,001 Commitments and contingencies Stockholders’ equity: Common stock ($ 0.0001 par value; 500,000,000 shares authorized as of December 31, 2024 and December 31, 2023; 101,910,883 and 104,055,168 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively) 10,191 10,406 Additional paid-in-capital 321,087,583 320,693,866 Accumulated deficit ( 1,402,167 ) ( 21,394,310 ) Accumulated other comprehensive income 1,221,869 1,484,905 Total stockholders’ equity attributable to DocGo Inc. and Subsidiaries 320,917,476 300,794,867 Noncontrolling interests ( 5,738,346 ) 4,376,089 Total stockholders’ equity 315,179,130 305,170,956 Total liabilities and stockholders’ equity $ 455,621,132 $ 490,451,957 The accompanying notes are an integral part of these Consolidated Financial Statements. F-5 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Year Ended December 31, 2024 2023 2022 Revenues, net $ 616,555,132 $ 624,288,642 $ 440,515,746 Expenses: Cost of revenues (exclusive of depreciation and amortization, which is shown separately below) 402,980,557 428,906,225 285,794,520 Operating expenses: General and administrative 138,758,758 137,152,512 103,403,416 Depreciation and amortization 15,884,898 16,431,892 10,565,578 Legal and regulatory 17,146,891 13,082,569 8,780,590 Technology and development 11,589,402 10,858,724 5,384,853 Sales, advertising and marketing 1,505,900 2,801,740 4,755,161 Total expenses 587,866,406 609,233,662 418,684,118 Income from operations 28,688,726 15,054,980 21,831,628 Other (expense) income: Interest (expense) income, net ( 1,929,207 ) 1,684,399 762,685 Gain on remeasurement of warrant liabilities — — 1,127,388 Change in fair value of contingent liability 9,392,133 1,437,525 — Finite-lived intangible asset impairment ( 8,306,591 ) — — Goodwill impairment — — ( 2,921,958 ) (Loss) gain on equity method investments ( 316,044 ) ( 343,336 ) 8,919 (Loss) gain on remeasurement of operating and finance leases ( 32,363 ) ( 866 ) 1,388,273 Gain on bargain purchase — — 1,593,612 Gain (loss) on disposal of fixed assets 23,682 ( 852,544 ) ( 21,173 ) Other income (expense) 228,666 ( 686,865 ) ( 987,482 ) Total other (expense) income ( 939,724 ) 1,238,313 950,264 Net income before income tax expense 27,749,002 16,293,293 22,781,892 (Provision for) benefit from income taxes ( 14,388,422 ) ( 6,244,965 ) 7,961,321 Net income 13,360,580 10,048,328 30,743,213 Net (loss) income attributable to noncontrolling interests ( 6,631,563 ) 3,189,873 ( 3,841,285 ) Net income attributable to stockholders of DocGo Inc. and Subsidiaries 19,992,143 6,858,455 34,584,498 Other comprehensive income Foreign currency translation adjustment ( 263,036 ) 743,699 773,707 Total comprehensive income $ 19,729,107 $ 7,602,154 $ 35,358,205 Net income per share attributable to DocGo Inc. and Subsidiaries - Basic $ 0.20 $ 0.07 $ 0.34 Weighted-average shares outstanding - Basic 102,395,141 103,511,299 101,228,369 Net income per share attributable to DocGo Inc. and Subsidiaries - Diluted $ 0.18 $ 0.06 $ 0.34 Weighted-average shares outstanding - Diluted 109,422,840 105,617,817 102,975,831 The accompanying notes are an integral part of these Consolidated Financial Statements. F-6 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY Common Stock Additional Paid-in- Capital Accumulated Deficit Accumulated Other Comprehensive (Loss) Income Noncontrolling Interests Total Stockholders’ Equity Shares Amount Balance - December 31, 2021 100,133,953 $ 10,013 $ 283,161,216 $ ( 63,556,714 ) $ ( 32,501 ) $ 7,475,010 $ 227,057,024 Equity cost — — ( 19,570 ) — — — ( 19,570 ) Noncontrolling interest contribution — — — — — 2,063,000 2,063,000 Common stock repurchased ( 536,839 ) ( 54 ) ( 3,731,658 ) — — — ( 3,731,712 ) Exercise of stock options 1,053,401 105 1,980,674 — — — 1,980,779 Cashless exercise of options 354,276 36 ( 230 ) — — — ( 194 ) Stock based compensation — — 7,183,992 — — — 7,183,992 Restricted stock units — — 495,579 — — — 495,579 Share warrants conversion 1,406,371 141 12,381,432 — — — 12,381,573 Net loss attributable to noncontrolling interests — — — — — ( 3,841,285 ) ( 3,841,285 ) Foreign currency translation — — — — 773,707 — 773,707 Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — 34,584,498 — — 34,584,498 Balance - December 31, 2022 102,411,162 $ 10,241 $ 301,451,435 $ ( 28,972,216 ) $ 741,206 $ 5,696,725 $ 278,927,391 UK Ltd. restricted stock — — 167,175 — — — 167,175 Health liquidation — — — 70,284 — — 70,284 Acquisition of CRMS 117,330 12 1,000,000 — — — 1,000,012 Acquisition of FMC NA 360,145 36 ( 1,432,963 ) 649,167 — ( 3,213,956 ) ( 3,997,716 ) Acquisition of Healthworx — — — — — ( 1,296,553 ) ( 1,296,553 ) Exercise of stock options 465,429 46 1,413,962 — — — 1,414,008 Cashless exercise of options 6,374 1 ( 1 ) — — — — Shares withheld for taxes ( 280,654 ) ( 27 ) ( 2,308,927 ) — — — ( 2,308,954 ) Stock-based compensation 975,382 97 20,403,185 — — — 20,403,282 Net loss attributable to noncontrolling interests — — — — — 3,189,873 3,189,873 Foreign currency translation — — — — 743,699 — 743,699 Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — 6,858,455 — — 6,858,455 Balance - December 31, 2023 104,055,168 $ 10,406 $ 320,693,866 $ ( 21,394,310 ) $ 1,484,905 $ 4,376,089 $ 305,170,956 Common stock repurchased ( 3,647,342 ) 0 ( 365 ) ( 13,755,906 ) — — — ( 13,756,271 ) Stock-based compensation 1,205,461 120 13,137,405 — — — 13,137,525 Shares withheld for taxes ( 297,313 ) ( 30 ) ( 1,168,847 ) — — — ( 1,168,877 ) Exercise of stock options 16,559 2 26,328 — — — 26,330 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 — — — — — ( 6,631,563 ) ( 6,631,563 ) Dividends paid to noncontrolling interest — — — — — ( 1,294,422 ) ( 1,294,422 ) Foreign currency translation — — — — ( 263,036 ) — ( 263,036 ) Net income attributable to stockholders of DocGo Inc. and Subsidiaries — — — 19,992,143 — — 19,992,143 Balance - December 31, 2024 101,910,883 $ 10,191 $ 321,087,583 $ ( 1,402,167 ) $ 1,221,869 $ ( 5,738,346 ) $ 315,179,130 The accompanying notes are an integral part of these Consolidated Financial Statements. F-7 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, 2024 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 13,360,580 $ 10,048,328 $ 30,743,213 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation of property and equipment 5,606,818 4,829,780 4,114,346 Amortization of intangible assets 5,660,818 5,249,358 3,214,814 Amortization of finance lease right-of-use assets 4,617,262 6,352,754 3,236,418 (Gain) loss on disposal of assets ( 23,682 ) 852,544 21,173 Deferred income tax 3,466,505 ( 1,981,519 ) ( 9,957,967 ) Loss (gain) on equity method investments 316,044 343,336 ( 8,919 ) Bad debt expense 5,235,560 3,601,520 3,815,187 Stock-based compensation 13,634,086 20,969,174 8,054,571 Loss (gain) on remeasurement of operating and finance leases 32,363 866 ( 1,388,273 ) Loss on liquidation of business — 70,284 — Gain on remeasurement of warrant liabilities — — ( 1,127,388 ) Gain on bargain purchase — — ( 1,593,612 ) Finite-lived intangible asset impairment 8,306,591 — — Goodwill impairment — — 2,921,958 Change in fair value of contingent consideration ( 9,392,133 ) ( 1,437,525 ) — Changes in operating assets and liabilities: Accounts receivable 41,272,218 ( 160,524,934 ) ( 8,415,793 ) Asset held for sale — — 190,312 Prepaid expenses and other current assets 13,007,231 ( 10,843,890 ) ( 4,181,035 ) Other assets ( 1,384,824 ) 1,059,605 1,557,655 Accounts payable 8,562,006 ( 1,780,403 ) 3,637,305 Accrued liabilities ( 41,940,373 ) 58,968,844 ( 5,964,064 ) Net cash provided by (used in) operating activities 70,337,070 ( 64,221,878 ) 28,869,901 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment ( 3,834,146 ) ( 7,584,561 ) ( 3,198,234 ) Acquisition of intangibles ( 2,002,103 ) ( 2,541,661 ) ( 2,299,558 ) Acquisition of businesses — ( 20,203,464 ) ( 32,953,179 ) Equity method investments ( 310,450 ) ( 298,932 ) — Investment in equity securities ( 5,000,000 ) — — Proceeds from disposal of property and equipment 274,427 747,088 3,000 Net cash used in investing activities ( 10,872,272 ) ( 29,881,530 ) ( 38,447,971 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from revolving credit line 45,000,000 25,000,000 — Repayments of revolving credit line ( 40,000,000 ) — ( 25,881 ) Repayments of notes payable ( 51,987 ) ( 25,926 ) ( 925,151 ) Due to seller ( 3,118,595 ) ( 13,590,382 ) ( 2,535,521 ) Acquisition of noncontrolling interest ( 1,848,000 ) — — Earnout payments on contingent liabilities ( 3,608,553 ) ( 5,266,681 ) — Dividends paid to noncontrolling interest ( 1,294,422 ) — — Noncontrolling interest contributions — — 2,063,000 F-8 Table of Contents DocGo Inc. and Subsidiaries CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) Proceeds from exercise of stock options 26,330 1,581,183 1,980,585 Payments for taxes related to shares withheld for employee taxes ( 1,168,877 ) ( 2,308,954 ) — Common stock repurchased ( 13,756,271 ) — ( 3,731,712 ) Equity costs — — ( 19,570 ) Payments on obligations under finance lease ( 4,334,463 ) ( 4,270,553 ) ( 2,985,568 ) Net cash (used in) provided by financing activities ( 24,154,838 ) 1,118,687 ( 6,179,818 ) Effect of exchange rate changes on cash and cash equivalents ( 190,639 ) 1,093,633 761,232 Net increase (decrease) in cash and restricted cash 35,119,321 ( 91,891,088 ) ( 14,996,656 ) Cash and restricted cash at beginning of period 72,217,986 164,109,074 179,105,730 Cash and restricted cash at end of period $ 107,337,307 $ 72,217,986 $ 164,109,074 Year Ended December 31, 2024 2023 2022 Supplemental disclosure of cash and non-cash transactions: Cash paid for interest $ 2,142,288 $ 250,100 $ 197,005 Cash paid for interest on finance lease liabilities $ 769,041 $ 600,239 $ 559,596 Cash paid for income taxes $ 7,249,331 $ 4,251,658 $ 1,505,235 Right-of-use assets obtained in exchange for lease liabilities $ 13,973,620 $ 7,621,538 $ 5,035,201 Remeasurement of finance lease right-of-use asset due to lease modification $ 300,000 $ — $ — Fixed assets acquired in exchange for notes payable $ — $ — $ 923,377 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 $ 89,241,695 $ 59,286,147 $ 157,335,323 Restricted cash 18,095,612 12,931,839 6,773,751 Total cash and restricted cash shown in statement of cash flows $ 107,337,307 $ 72,217,986 $ 164,109,074 The accompanying notes are an integral part of these Consolidated Financial Statements. F-9 Table of Contents DocGo Inc. and Subsidiaries NOTES TO 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. Pursuant to 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 and becoming a wholly owned subsidiary of the Company. 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. 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and applicable rules and regulations of the SEC. Principles of Consolidation The Consolidated Financial Statements include the accounts and operations of DocGo Inc. and its subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation. Noncontrolling interests (“NCI“) on the Consolidated Financial Statements represent a portion of consolidated joint ventures and variable interest entities (“VIEs“) F-10 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) in which the Company does not have direct equity ownership. Certain amounts in the prior years’ Consolidated Statements of Changes in Stockholders’ Equity and Consolidated Statements of Cash Flows have been reclassified to conform to the current year presentation. 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 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 VIEs. 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 wer e $ 231,952 , $ 235,976 and $ 373,456 for the years ended December 31, 2024, 2023 and 2022, respectively. The total assets amounted to $ 20,837,325 an d $ 4,364,274 on December 31, 2024 and 2023, respectively. Total liabilities were $ 21,516,860 and $ 4,811,857 on December 31, 2024 and 2023, respectively. The Company’s VIEs total stockholders’ deficit wer e $ 679,535 a nd $ 447,583 on December 31, 2024 and 2023, respectively. Foreign Currency The Company’s functional currency is the U.S. dollar. The functional currency of our foreign operation is the British pound. Assets and liabilities of 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 Consolidated Statements of Operations and Comprehensive Income are translated at the weighted average rate of exchange during the applicable period. The resulting unrealized cumulative translation adjustment for the years ended December 31, 2024, 2023 and 2022 were $( 263,036 ), $ 743,699 , and $ 773,707 , 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, contingent consideration, 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. F-11 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 38 % of revenues and 39 % of net accounts receivable and another customer that accounted for 28 % of revenues and 37 % of net accounts receivable for the year ended December 31, 2024. The Company had one customer that accounted for approximately 40 % of revenues and 42 % of net accounts receivable and another customer that accounted for 21 % of revenues and 40 % of net accounts receivable for the year ended December 31, 2023. The Company had one customer that accounted for approximately 35 % of revenues and 45 % of net accounts receivable for the year ended December 31, 2022. Major Vendor The Company had one vendor that accounted for approximately 17 %, 14 % and 12 % of total cost for the years ended December 31, 2024, 2023 and 2022 , respectively. The Company expects to maintain this relationship with the vendor and believes the services provided from this vendor are available from alternatives sources. Reclassifications Certain reclassifications of amounts previously reported have been made to the accompanying Consolidated Financial Statements to maintain consistency between periods presented. The reclassifications had no impact on previously reported net income or retained earnings. Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with an original maturity of three months or less. The Company maintains most of its cash and cash equivalents with financial institutions in the U.S. The Company’s accounts at financial institutions in the U.S. are insured by the FDIC and are in excess of FDIC insured limits. The Company had cash balances of approximately $ 4,020,221 and $ 3,699,793 with foreign financial institutions on December 31, 2024 and 2023, respectively. Restricted Cash Cash and cash equivalents subject to contractual restrictions and not readily available are classified as restricted cash in the Consolidated Balance Sheets. Restricted cash is classified as either a current or non-current asset depending on the F-12 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 10). The Company utilizes a combination of insurance and self-insurance programs, including a wholly-owned captive insurance entity, to provide for the potential liabilities for certain risks, including workers’ compensation, automobile liability, general liability and professional liability. Liabilities associated with the risks that are retained by the Company within its high deductible limits are not discounted and are estimated, in part, by considering claims experience, exposure and severity factors and other actuarial assumptions. The Company has commercial insurance in place for catastrophic claims above its deductible limits. ARM Insurance, Inc., a Vermont-based wholly-owned captive insurance subsidiary of the Company, charges the operating subsidiaries premiums to insure the retained workers’ compensation, automobile liability, general liability and professional liability exposures. Pursuant to Vermont insurance regulations, ARM Insurance, Inc. maintains certain levels of cash and cash equivalents related to its self-insurance exposures. The Company also maintains certain cash balances related to its insurance programs, which are held in a self-depleting trust and restricted as to withdrawal or use by the Company other than to pay or settle self-insured claims and costs. These amounts are reflected in “Restricted cash” in the accompanying Consolidated Balance Sheets. Fair Value of Financial Instruments ASC 820, Fair Value Measurements , provides guidance on the development and disclosure of fair value measurements. Under this accounting guidance, fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of December 31, 2024, December 31, 2023 and December 31, 2022. For certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, restricted cash, accounts payable and accrued expenses, and due to seller, the carrying amounts approximate their fair values as it is short term in nature. 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. Contingent Consideration 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 $ 187,506 and F-13 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) $( 338,956 ) for the years ended December 31, 2024 and 2023, respectively. The Company did not record a change in fair value of contingent consideration for the year ended December 31, 2022. 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 and paid the remaining $ 2,008,524 as of December 31, 2024. There was no estimated contingent consideration amount payable for Ryan Brothers as of December 31,2024 and an estimated contingent consideration of $ 1,821,018 as of December 31, 2023 (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 $( 13,763 ) and $( 374,044 ) for the years ended December 31, 2024 and 2023, respectively. The Company did not record a change in fair value of contingent consideration for the year ended December 31, 2022. 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 December 31, 2024 and 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 not record a change in fair value of contingent consideration for the year ended December 31, 2024, recorded a change in fair value of contingent consideration in the amount of $( 2,000,312 ) for the year ended December 31, 2023, and did not record a change in fair value of contingent consideration for the year ended December 31, 2022. Additionally, the Company recorded foreign exchange movements of $( 4,798 ) and $ 129,599 for the years ended December 31, 2024 and 2023, respectively. The Company did not record any foreign exchange movements for the year ended December 31, 2022. On April 2, 2024, the Company paid the remaining contingent consideration balance in the amount of $ 600,029 . There was no remaining contingent liability bal ance as of December 31, 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 CRMS’ attainment of full-year EBITDA targets. The Company recorded a change in fair value of contingent consideration in the amount of $( 9,565,876 ) and $ 1,265,645 for the years ended December 31, 2024 and 2023, respectively. On May 29, 2024, the Company paid a portion of the True-up Payment in the amount of $ 1,000,000 . On July 19, 2024, the Company issued $ 1,814,345 in common stock, par value $ 0.0001 (“Common Stock”), or 578,350 shares, constituting the remainder of the True-up Payment. The estimated contingent consideration amount payable for CRMS was $ 4,707,614 and $ 17,087,835 as of December 31, 2024 and 2023, respectively (see Note 4). Impairment of Finite-Lived Intangible Assets The Company evaluated its intangible assets as of December 31, 2024 and determined there was an impairment in relation to its customer relationships in CRMS. The impairment is a result of reduced growth expectations and decreases in the estimated future cash flows of the asset group which represented a triggering event that required an evaluation of the underlying finite-lived intangible assets for impairment. The Company used a discounted cash flow analysis to fair value the customer relationships. This calculation contains uncertainties as they require management to make assumptions including, but not limited to, future cash flows of the asset group, an appropriate discount rate, and long-term growth rates. This fair value determination is categorized as Level 3 within the fair value hierarchy. As a result of this impairment, the Company recognized a non-cash impairment charge of $ 8,306,591 in the year ended December 31, 2024 in the Consolidated Statements of Operations and Comprehensive Income. The charge was recorded as part of other income in the Company’s Consolidated Statements of Operations and Comprehensive Income and has no impact on its cash flow, liquidity or compliance with debt covenants. Refer to Note 7. Equity Investment Without Readily Determinable Fair Value The Company has invested in equity securities without readily determinable fair values and has elected to measure them using the measurement alternative in accordance with ASC 321, Investments - Equity Securities (“ASC 321”). This F-14 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) investment is carried at cost less any impairment and adjusted to fair value if there are observable price changes for an identical or similar investment of the same issuer. Refer to Note 8. 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 (“FASB”) 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 . Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation and amortization. When an item is sold or retired, the costs and related accumulated depreciation or amortization are eliminated, and the resulting gain or loss, if any, is recorded in operating expenses in the Consolidated Statements of Operations and Comprehensive Income. The Company provides for depreciation and amortization using the straight-line method over the estimated useful lives of the respective assets. A summary of estimated useful lives is as follows: Estimated Useful Life Buildings 39 years Office equipment and furniture 3 - 7 years Vehicles 5 - 8 years Medical equipment 5 years Leasehold improvements Shorter of useful life of asset or lease term F-15 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) Expenditures for repairs and maintenance are charged to expense as incurred. Expenditures that improve an asset or extend its estimated useful life are capitalized. Software Development Costs Costs incurred during the preliminary project stage, maintenance costs and routine updates and enhancements of products are expensed as incurred. The Company capitalizes software development costs intended for internal use in accordance with ASC 350-40, Internal-Use Software . Costs incurred in developing the application of its software and costs incurred to upgrade or enhance product functionalities are capitalized when it is probable that the expenses would result in future economic benefits to the Company and the functionalities and enhancements are used for their intended purpose. Capitalized software costs are amortized over its useful life. Estimated useful life of software development activities are reviewed annually or whenever events or changes in circumstances indicate that intangible assets may be impaired and adjusted as appropriate to reflect upcoming development activities that may include significant upgrades or enhancements to the existing functionality. Business Combinations The Company accounts for its business combinations under the provisions of ASC 805-10, Business Combinations (“ASC 805-10”), which requires that the acquisition method of accounting be used for all business combinations. Assets acquired and liabilities assumed, including noncontrolling interests, are recorded at the date of acquisition at their respective fair values. ASC 805-10 also specifies criteria that intangible assets acquired in a business combination must meet to be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date and any changes in fair value after the acquisition date are accounted for as measurement-period adjustments. Changes in fair value of contingent consideration resulting from events after the acquisition date, such as earn-outs, are recognized as follows: (1) if the contingent consideration is classified as equity, the contingent consideration is not re-measured and its subsequent settlement is accounted for within equity, or (2) if the contingent consideration is classified as a liability, the changes in fair value are recognized in earnings. For transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. The estimated fair value of net assets to be acquired, including the allocation of the fair value to identifiable assets and liabilities, is determined using established valuation techniques. Management uses assumptions based on historical knowledge of the business and projected financial information of the target. These assumptions may vary based on future events, perceptions of different market participants and other factors outside the control of management, and such variations may be significant to estimated values. Impairment of Long-Lived Assets The Company evaluates the recoverability of the recorded amount of long-lived assets, primarily property and equipment and finite-lived intangible assets, whenever events or changes in circumstance indicate that the recorded amount of an asset may not be fully recoverable. An impairment is assessed when the undiscounted expected future cash flows derived from an asset are less than its carrying amount. If an asset is determined to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds its fair value. Assets targeted for disposal are reported at the lower of the carrying amount or fair value less cost to sell. Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the total purchase consideration over the fair value of the identifiable assets acquired and liabilities assumed in a business combination. Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment at the reporting unit level annually on December 31 or more frequently if events or changes in circumstances indicate that it is more likely than not to be impaired. These events include: (i) severe adverse industry or F-16 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. Derivative Liabilities The Company does not use derivative instruments to hedge exposures to interest rate, market or foreign currency risks. The Company evaluates its financial instruments to determine if such instruments contain features that qualify as embedded derivatives. Related Party Transactions The Company defines related parties as affiliates of the Company, entities for which investments are accounted for by the equity method, trusts for the benefit of employees, principal owners (beneficial owners of more than 10 % of the voting interest), management, members of immediate families of principal owners or management, and other parties with which the Company may deal with if one party controls or can significantly influence management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests. Related party transactions are recorded within operating expenses in the Consolidated Statements of Operations and Comprehensive Income. For details regarding the related party transactions that occurred during the years ended December 31, 2024, 2023 and 2022 refer to Note 18. 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 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. F-17 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 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 simultaneously receives and consumes the benefits provided by the Company as the performance obligations are fulfilled, the Company satisfies performance obligations at the same time. For Transportation Services, where the customer pays fixed rate usage-based fees, the actual usage in the period represents the best measure of progress. F-18 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) In the following table, revenue is disaggregated as follows: Revenue Breakdown Year ended December 31, 2024 2023 2022 Primary Geographical Markets U.S. $ 558,790,845 $ 571,887,943 $ 419,578,082 U.K. 57,764,287 52,400,699 20,937,664 Total revenue $ 616,555,132 $ 624,288,642 $ 440,515,746 Major Segments/Service Lines Mobile Health Services $ 423,126,040 $ 442,793,537 $ 325,891,440 Transportation Services 193,429,092 181,495,105 114,624,306 Total revenue $ 616,555,132 $ 624,288,642 $ 440,515,746 Stock Based Compensation The Company maintains stock incentive plans 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 the management determines that it is probable that the performance-based vesting conditions will be achieved. All stock-based compensation costs are recorded in operating expenses in the Consolidated Statements of Operations and Comprehensive Income. Earnings per Share Earnings per share represents the net income attributable to stockholders divided by the weighted-average number of shares outstanding during the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue Common Stock were exercised or converted into Common Stock during the reporting periods. Potential dilutive Common Stock equivalents consist of the incremental shares of Common Stock issuable upon 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. Year Ended December 31, 2024 2023 2022 Net income attributable to stockholders of DocGo Inc. and Subsidiaries $ 19,992,143 $ 6,858,455 $ 34,584,498 Weighted-average shares - basic 102,395,141 103,511,299 101,228,369 Effect of dilutive options 7,027,699 2,106,518 1,747,462 Weighted-average shares - dilutive 109,422,840 105,617,817 102,975,831 Net income per share attributable to DocGo Inc. and Subsidiaries - Basic 0.20 0.07 0.34 Net income per share attributable to DocGo Inc. and Subsidiaries - Diluted 0.18 0.06 0.34 Anti-dilutive employee share-based awards excluded 7,251,625 10,638,371 9,000,750 F-19 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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. Equity Investment without Readily Determinable Fair Value Equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the Company) which do not have readily determinable fair values are recorded as equity investments without readily determinable fair value in accordance with ASC 321. All equity investments without readily determinable fair value are assessed for impairment when events or changes in circumstances indicate that the carrying amounts may not be recoverable, and measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. The recoverable value of the investment was determined based on the Company’s best estimate of the amount that could be realized from the investment, which considered the latest financial information. During the years ended December 31, 2024, 2023 and 2022, no impairment losses were recognized for the equity investments without readily determinable fair values. 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. 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 F-20 Table of Contents DocGo Inc. and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 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 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. The Company adopted ASU 2023-07 in the fourth quarter of 2024. Adoption of this standard modified the Company’s segment disclosures but did not have a material impact on the Company’s Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income, or Consolidated Statements of Cash Flows. Refer to Note 13 for the updated presentation. Recently Issued Accounting Standards Not Yet Adopted 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 December 31, 2024 and 2023 are as follows: December 31, 2024 December 31, 2023 Transportation equipment $ 17,300,595 $ 17,438,072 Medical equipment 9,210,203 7,104,161 Office equipment and furniture 4,293,100 3,701,657 Leasehold improvements 1,239,089 709,619 Buildings 527,283 527,283 Land 37,800 37,800 32,608,070 29,518,592 Less: Accumulated depreciation ( 17,726,659 ) ( 12,683,108 ) Property and equipment, net $ 14,881,411 $ 16,835,484 During the year ended December 31, 2024, the Company disposed of assets with a cost of $ 758,859 and accumulated depreciation of $ 509,378 for proceeds of $ 274,427 . The Company recorded a gain on disposal of assets of $ 24,946 . During the year ended December 31, 2023, the Company disposed of assets with a cost of $ 12,343,547 and accumulated depreciation of $ 10,743,915 for proceeds of $ 747,088 . The Company recorded a loss on disposal of assets of $ 852,544 . During the year ended December 31, 2022, the Company disposed of assets with a cost of $ 50,353 and accumulated depreciation of $ 26,180 for proceeds of $ 3,000 . The Company recorded a loss on disposal of assets of $ 21,173 . The Company recorded depreciation expenses of $ 5,606,818 , $ 4,829,780 and $ 4,114,346 as of December 31, 2024, 2023 and 2022, respectively. F-21 4. Acquisitions 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 year ended December 31, 2024, the Company wrote off $ 1,315,691 and paid $ 109,619 of 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 December 31, 2024. There was no remaining purchase price payable as of December 31, 2024 and a purchase price payable of $ 3,000,000 as of December 31, 2023. As of December 31, 2024 and 2023, there were remaining due to seller balances pertaining to pre-acquisition accounts receivable of $ 28,656 and $ 1,453,966 , respectively. The Company recorded a change in fair value of contingent consideration in the amount of $( 13,763 ) and $( 374,044 ) for the years ended December 31, 2024 and 2023, respectively. The Company did not record a change in fair value of contingent consideration for the year ended December 31, 2022. 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 December 31, 2024 and 2023, respectively. Ryan Bros. Fort Atkinson, LLC On August 9, 2022, the Company acquired 100 % of the outstanding shares of common stock of Ryan Brothers, a provider of medical transportation services, in exchange for an aggregate purchase price of $ 11,422,252 consisting of $ 7,422,252 in cash at closing and an estimated $ 4,000,000 in contingent consideration to be paid out over 24 months, commencing on August 1, 2022, based on performance of certain obligations. During the year ended December 31, 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 year ended December 31, 2024. There was no remaining due to seller balance as of December 31, 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 $ 187,506 and $( 338,956 ) for the years ended December 31, 2024 and 2023, respectively. The Company did not record a change in fair value of contingent consideration for the year ended December 31, 2022. 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 and paid the remaining $ 2,008,524 as of December 31, 2024. There was no estimated contingent consideration amount payable for Ryan Brothers as of December 31,2024 and an estimated contingent consideration of $ 1,821,018 as of December 31, 2023. 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. Additionally, the Company paid $ 11,279,201 of deferred consideration to LMS during the year ended December 31, 2023. As of December 31, 2024 and 2023, there was no remaining due to seller amounts outstanding. The Company did not record a change in fair value of contingent consideration for the year ended December 31, 2024, recorded a change in fair value of contingent consideration in the amount of $( 2,000,312 ) for the year ended December 31, 2023, and did not record a change in fair value of contingent consideration for the year ended December 31, 2022. F-22 Additionally, the Company recorded foreign exchange movements of $( 4,798 ) and $ 129,599 for the years ended December 31, 2024 and 2023, respectively. The Company did not record any foreign exchange movements for the year ended December 31, 2022. 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 December 31, 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 recorded a change in fair value of contingent consideration in the amount of $( 9,565,876 ) and $ 1,265,645 for the years ended December 31, 2024 and 2023, respectively. On May 29, 2024, the Company paid a portion of the True-up Payment in the amount of $ 1,000,000 . On July 19, 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 $ 4,707,614 and $ 17,087,835 as of December 31, 2024 and 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 approximately $ 35,560 for the year ended December 31, 2023. Healthworx LLC On May 10, 2023, the Company acquired the remaining outstanding shares of common stock of Healthworx LLC (“Healthworx”), a provider of management, administration and support services to service providers focused on medical testing and diagnostic screening, from its joint venture with Rapid Reliable Testing, LLC (“RRT”) in exchange for $ 1,385,156 in cash. 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. F-23 The following table presents the assets acquired and liabilities assumed at the date of the acquisitions: 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 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 Pro Forma Disclosures The following unaudited pro forma combined financial information for the fiscal years ended December 31, 2023 and 2022 gives effect to the acquisitions disclosed above as if they had occurred on January 1, 2022. 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 year ended December 31, 2023 represent the actual F-24 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. 2023 2022 Revenue $ 627,402,261 $ 539,522,587 Net income $ 11,087,122 $ 46,960,359 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 is a claims process. Creditors of Health received notice of the ABC and a proof of claim form and were required to submit a proof of claim in order to participate in distribution of net liquidation proceeds by the Assignee. As of December 31, 2022, Health met the criteria to be classified as held for sale. A s 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 Consolidated Balance Sheets. The intercompany receivables and intercompany payables were eliminated in the Company’s Consolidated Balance Sheet as of December 31, 2022. 6. Goodwill In connection with the ABC, the Company evaluated its goodwill balances as of December 31, 2022 and determined that there was an impairment of goodwill related to its Health reporting unit. The impairment was primarily due to the ABC filing. As a result of this impairment, the Company recognized a non-cash charge of $ 2,921,958 in the year ended December 31, 2022 in the Consolidated Statements of Operations and Comprehensive Income. The charge was recorded as part of other income in the Company’s Consolidated Statements of Operations and Comprehensive Income and has no impact on its cash flow, liquidity or compliance with debt covenants. The Company did not record any goodwill in connection with acquisitions during the year ended December 31, 2024. The Company recorded an aggregate of $ 8,642,190 in goodwill in connection with its acquisitions during the year ended December 31, 2023. F-25 The carrying value of goodwill amounted to $ 47,432,550 as of December 31, 2024. The changes in the carrying value of goodwill for the year ended December 31, 2024 are as noted in the table below: Carrying Value Balance as of December 31, 2022 $ 38,900,413 Goodwill acquired during the period 8,642,190 Currency translation adjustment and others ( 2,674 ) Balance as of December 31, 2023 $ 47,539,929 Currency translation adjustment and others ( 107,379 ) Balance as of December 31, 2024 $ 47,432,550 7. Intangibles Intangible assets consisted of the following as of December 31, 2024 and 2023: December 31, 2024 Estimated Useful Life (Years) Gross Carrying Amount Additions Impairment Accumulated Amortization Net Carrying Amount Computer software 5 years $ 247,828 $ — $ — $ ( 242,059 ) $ 5,769 Operating licenses Indefinite 9,399,004 — — — 9,399,004 Internally developed software 4 - 5 years 10,078,087 2,051,826 — ( 11,227,960 ) 901,953 Material contracts Indefinite 62,550 — — — 62,550 Customer relationships 8 - 9 years 28,337,524 ( 37,400 ) ( 8,306,591 ) ( 6,504,390 ) 13,489,143 Trademark 8 - 15 years 427,531 ( 21,999 ) — ( 100,138 ) 305,394 Non-compete agreements 5 years 100,000 — — ( 35,000 ) 65,000 Trade credits 5 years 1,500,000 — — — 1,500,000 $ 50,152,524 $ 1,992,427 $ ( 8,306,591 ) $ ( 18,109,547 ) $ 25,728,813 December 31, 2023 Estimated Useful Life (Years) Gross Carrying Amount Additions Impairment 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 $( 12,455 ) for the year ended December 31, 2024. Intangible asset balances are translated into U.S. dollars using exchange rates in effect at period F-26 end, and adjustments related to foreign currency translation are included in other comprehensive income. During the year ended December 31, 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 year ended December 31, 2024. There were no disposal of intangible assets for the years ended December 31, 2023 and 2022. The Company also reclassified certain intangible assets with a cost of $ 30,361 and accumulated amortization of $ 8,136 to “legal and regulatory” expenses within the Consolidated Statements of Operations and Comprehensive Income. The Company evaluated its intangible assets as of December 31, 2024 and determined there was an impairment in relation to its customer relationships in CRMS. The impairment is a result of reduced growth expectations and decreases in the estimated future cash flows of the asset group which represented a triggering event that required an evaluation of the underlying finite-lived intangible assets for impairment. The Company used a discounted cash flow analysis to fair value the customer relationships. This calculation contains uncertainties as they require management to make assumptions including, but not limited to, future cash flows of the asset group, an appropriate discount rate, and long-term growth rates. This fair value determination is categorized as Level 3 within the fair value hierarchy. As a result of this impairment, the Company recognized a non-cash impairment charge of $ 8,306,591 in the year ended December 31, 2024 in the Consolidated Statements of Operations and Comprehensive Income. The charge was recorded as part of other income in the Company’s Consolidated Statements of Operations and Comprehensive Income and has no impact on its cash flow, liquidity or compliance with debt covenants. The Company recorded amortization expense of $ 5,660,818 , $ 5,249,358 and $ 3,214,814 for the periods ended December 31, 2024, 2023 and 2022, respectively. Future amortization expense at December 31, 2024 for the next five years and in the aggregate are as follows: Amortization Expense 2025 $ 2,839,672 2026 2,167,093 2027 2,149,822 2028 2,113,652 2029 2,080,148 Thereafter 3,416,872 Total $ 14,767,259 F-27 8. Investments The Company’s ownership interest and carrying amounts of investments as of December 31, 2024 and 2023 consist of the following: December 31, 2024 December 31, 2023 Percentage Ownership Amount Percentage Ownership Amount Equity investment without readily determinable fair value $ 5,000,000 $ — Equity method investment Various 547,979 Various 553,573 Total investments $ 5,547,979 $ 553,573 Equity Investment without Readily Determinable Fair Value On October 25, 2024, the Company acquired non-marketable equity securities in Firefly Health, Inc for $ 5,000,000 . These investments are measured at cost, less any impairment, adjusted for observable price changes in orderly transactions for identical or similar investments of the same issuer. During the year ended 2024, no impairment losses or upward adjustments were recognized for the equity investments without readily determinable fair value. As of December 31, 2024, the Company’s investments in equity securities without readily determinable fair values totaled $ 5,000,000 , and are included in the caption “Investments” on the Consolidated Balance Sheets. Equity Method Investments On October 26, 2021, the Company acquired a 50 % interest in RND Health Services Inc. (“RND”) for $ 655,876 . During the year ended December 31, 2024 and 2023, the Company made an additional investment amounting to $ 310,450 and $ 298,932 , respectively. The Company’s carrying value in RND, an equity method investee, is reflected in the caption “Investments” on the Consolidated Balance Sheets. Changes in value of RND are recorded in “(Loss) gain on equity method investments” on the accompanying Consolidated Statements of Operations and Comprehensive Income. On November 1, 2021, the Company acquired a 20 % interest in National Providers Association, LLC (“NPA”) for $ 30,000 . Effective December 21, 2021, three members withdrew from NPA, resulting in the remaining two members obtaining the remaining ownership percentage. As of December 31, 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 “Investments” on the accompanying Consolidated Balance Sheets. Changes in value of NPA are recorded in “(Loss) gain on equity method investments” on the Consolidated Statements of Operations and Comprehensive Income. F-28 9. Accrued Liabilities Accrued liabilities consisted of the following at the dates indicated: December 31, 2024 December 31, 2023 Accrued workers' compensation and other insurance liabilities $ 16,738,835 $ 12,881,902 Accrued general expenses 13,924,809 27,001,232 Accrued subcontractors 9,174,499 37,858,755 Accrued payroll 4,374,654 6,464,192 Accrued bonus 3,078,445 4,784,005 Other current liabilities 2,605,554 2,350,523 Total accrued liabilities $ 49,896,796 $ 91,340,609 10. Line of Credit On November 1, 2022, the Company entered into a credit agreement (the “Credit Agreement”) with two banks, with one bank in the capacity as a lender and the administrative agent (collectively with the other lender, the “Lenders”). The Credit Agreement provides for a revolving credit facility in the initial aggregate principal amount of $ 90,000,000 (the “Revolving Facility”). The Revolving Facility includes the ability for the Company to request an increase to the commitment by an additional amount of up to $ 50,000,000 , though no Lender (nor the Lenders collectively) is obligated to increase its respective commitments. Borrowings under the Revolving Facility bear interest at a per annum rate equal to: (i) at the Company’s option, (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin. The applicable margins are based on the Company’s consolidated net leverage ratio, adjusted on a quarterly basis. The initial applicable margins were 1.25 % for an adjusted term SOFR loan and 0.25 % for a base rate loan and are updated based on the Company’s consolidated net leverage ratio. The Revolving Facility matures on the five-year anniversary of the closing date, November 1, 2027. The Revolving Facility is secured by a first-priority lien on substantially all of the Company’s present and future personal assets and intangible assets. The Revolving Facility is subject to certain financial covenants such as a net leverage ratio and interest coverage ratio, as defined in the Credit Agreement. 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 additional $ 15,000,000 draw on March 18, 2024 . As of December 31, 2024 , the outstanding balance of the Revolving Facility w as $ 30,000,000 and the unused portion of the Revolving Facility was $ 60,000,000 . The Company incurred $ 2,162,753 and $ 359,330 in interest charges relating to its Revolving Facility for the years ended December 31, 2024 and 2023, respectively, which is reflected in interest (expense) income on the Company’s Consolidated Statements of Operations and Comprehensive Income. Standby Letters 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 had an initial one-year term, and is renewed automatically for successive one-year periods, unless earlier terminated by the institution. The letter of credit automatically renewed on October 20, 2024. As of December 31, 2024, no amounts had been drawn. On December 20, 2024, the Company obtained an irrevocable letter of credit from a financial institution in the amount of $ 133,303 . The letter of credit expires on the one-year anniversary of the closing date, or December 20, 2025 and is renewed automatically for successive one-year periods, unless earlier terminated by the institution. As of December 31, 2024, no amounts had been drawn. F-29 11. Notes Payable The Company has various loans with finance companies with monthly installments aggregating $ 1,082 , inclusive of interest ranging from 2.5 % to 4.8 %. The loan notes mature at various times through 2026 and are secured by transportation equipment. During the year ended December 31, 2024, the Company fully repaid one of its loan payables that was originally scheduled to mature in August 2026 amounting to $ 38,949 . As of December 31, 2024, the Company has one remaining loan payable, scheduled to mature in May 2026, with an outstanding balance of $ 17,730 . The following table summarizes the Company’s notes payable: December 31, 2024 December 31, 2023 Equipment and financing loans payable, between 2.5 % and 4.8 % interest and maturing on May 2026 and August 2026 $ 17,730 $ 69,717 Total notes payable 17,730 69,717 Less: current portion of notes payable 12,515 28,131 Total non-current portion of notes payable $ 5,215 $ 41,586 Interest expenses were $ 3,407 , $( 201,883 ) and $ 117,664 for the periods ended December 31, 2024, 2023 and 2022, respectively. Future minimum annual maturities of notes payable as of December 31, 2024 are as follows: Notes Payable 2025 $ 12,515 2026 5,215 Total maturities 17,730 Current portion of notes payable ( 12,515 ) Long-term portion of notes payable $ 5,215 12. Derivative Liabilities For the year ended December 31, 2021, the Company determined the fair value of its warrants that were previously publicly traded in active markets (“Public Warrants’) using quoted market prices for identical instruments. Accordingly, the Public Warrants were classified as Level 1 financial instruments. As of December 31, 2021, there were 3,833,333 Public Warrants outstanding at a fair value of $ 8.1 million. Because the transfer of the Company’s warrants that were issued in a private placement simultaneously with the closing of its initial public offering (“Private Warrants” and together with the Public Warrants, the “warrants”) to anyone outside of a small group of individuals constituting the sponsors of the Company would result in the Private Warrants having substantially the same terms as the Public Warrants, management determined that the fair value of each Private Warrant was the same as that of a Public Warrant, with an insignificant adjustment for marketability restrictions. Accordingly, the Private Warrants were classified as Level 1 financial instruments. As of December 31, 2021, 2,533,333 Private Warrants remained outstanding at a fair value of $ 5.4 million. Due to fair value changes throughout the year ended December 31, 2021, we recorded a gain on remeasurement of warrant liabilities of $ 5.2 million. For the year ended December 31, 2022, the Company recorded a gain of approximately $ 1.1 million from the remeasurement of warrant liabilities. The warrants were marked-to-market in each reporting period, and this loss reflected the increase in the Company’s stock price relative to the beginning of the period. On August 15, 2022, the Company announced the redemption of all of its outstanding warrants under the Warrant Agreement, dated as of October 14, 2020, F-30 by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, on the redemption date of September 16, 2022 (the “Redemption Date”). Warrants surrendered for exercise on a cashless basis resulted in the issuance of 1,406,371 shares of Common Stock. A total of 68,514 warrants were not surrendered on the Redemption Date and were redeemed for $ 0.10 per warrant. There were no warrants liabilities outstanding for the years ended December 31, 2024, 2023 and 2022. 13. Business Segment Information The Company conducts business in three operating segments: Mobile Health Services, Transportation Services, and Corporate. In accordance with ASC 280, Segment Reporting , operating segments are components of an enterprise for which separate financial information is evaluated regularly by the chief operating decision maker, the Company’s Chief Executive Officer and Chief Financial Officer, in deciding how to allocate resources and assessing performance. Prior to 2023, the Company reported in two segments because the Company’s entities have two main revenue streams. Beginning with the first quarter of 2023, the Company began reporting in three operating segments, adding a Corporate segment to allow for analysis of shared services and personnel that support both the Transportation Services and Mobile Health Services segments. Previously, these costs had been allocated almost entirely to the Transportation Services segment. All of the Company’s revenues and costs of revenues continue to be reported within the Transportation Services and Mobile Health Services segments. The Corporate segment contains operating expenses such as information technology costs, certain insurance costs and the compensation costs of senior and executive leadership. The segment reporting for the prior-year period has been adjusted to conform to the new methodology, for the purposes of allowing a clearer analysis of year-over-year performance. The Company’s Chief Executive Officer and Chief Financial Officer evaluate the Company’s financial information and resources and assesses the performance of these resources by revenue stream and by operating income or loss performance. In accordance with ASU 2023-07, the Company has also included disclosure in the tables below about the significant expense categories that are regularly provided to the chief operating decision maker. The Company has also disclosed an amount for other segment items, which are amounts included in income (loss) from operations that are not regularly provided to the chief operating decision maker. Other segment items primarily consist of technology and development expenses, legal and professional fees, medical supplies, and other general and administrative expenses such as management fees, occupancy expense, and insurance costs. 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 Year Ended December 31, 2024 Revenues $ 423,126,040 $ 193,429,092 $ — $ 616,555,132 Significant Segment Expenses 248,887,401 157,386,875 38,938,940 445,213,216 Personnel costs 115,480,700 120,548,486 34,009,595 270,038,781 Subcontractor costs 125,495,305 19,463,199 4,929,345 149,887,849 Vehicle costs 7,911,396 17,375,190 — 25,286,586 Other segment items 80,212,789 38,087,398 24,353,003 142,653,190 Income (loss) from operations 94,025,850 ( 2,045,181 ) ( 63,291,943 ) 28,688,726 Depreciation and amortization expense 4,770,367 8,305,049 2,809,482 15,884,898 Stock compensation 6,033,516 274,207 7,326,363 13,634,086 Finite-lived intangible asset impairment 8,306,591 — — 8,306,591 F-31 Change in fair value of contingent consideration ( 9,392,133 ) — — ( 9,392,133 ) Total assets 208,739,901 134,169,086 112,712,145 455,621,132 Long-lived assets 36,515,356 68,846,225 9,977,190 115,338,771 Capital expenditures 2,815,218 9,324,171 2,179,585 14,318,974 Year Ended December 31, 2023 Revenues $ 442,793,537 $ 181,495,105 $ — $ 624,288,642 Significant Segment Expenses 283,980,203 146,950,131 44,139,528 475,069,862 Personnel costs 122,233,677 116,689,011 40,156,572 279,079,260 Subcontractor costs 155,134,128 15,380,523 3,982,956 174,497,607 Vehicle costs 6,612,398 14,880,597 — 21,492,995 Other segment items 78,450,514 31,003,597 24,709,689 134,163,800 Income (loss) from operations 80,362,820 3,541,377 ( 68,849,217 ) 15,054,980 Depreciation and amortization expense 4,226,657 9,393,895 2,811,340 16,431,892 Stock compensation 1,698,350 1,434,505 17,836,319 20,969,174 Finite-lived intangible asset impairment — — — — Change in fair value of contingent consideration ( 1,437,525 ) — — ( 1,437,525 ) Total assets 280,646,925 132,178,214 77,626,818 490,451,957 Long-lived assets 32,841,680 78,848,587 11,952,528 123,642,795 Capital expenditures 30,163,882 20,254,373 597,283 51,015,538 Year Ended December 31, 2022 Revenues $ 325,891,440 $ 114,624,306 $ — $ 440,515,746 Significant Segment Expenses 189,978,467 102,697,543 33,409,491 326,085,501 Personnel costs 95,636,747 81,851,310 31,055,130 208,543,187 Subcontractor costs 83,158,899 8,236,644 2,354,361 93,749,904 Vehicle costs 11,182,821 12,609,589 — 23,792,410 Other segment items 43,202,810 26,472,934 22,922,873 92,598,617 Income (loss) from operations 92,710,163 ( 14,546,171 ) ( 56,332,364 ) 21,831,628 Depreciation and amortization expense 1,685,114 6,050,265 2,830,199 10,565,578 Stock compensation 1,425,299 1,415,670 5,213,602 8,054,571 Finite-lived intangible asset impairment — — — — Change in fair value of contingent consideration — — — — Total assets 116,821,500 118,627,613 157,828,515 393,277,628 Long-lived assets 33,181,594 65,580,291 2,479,889 101,241,774 Capital expenditures 39,569,802 52,105,196 2,542,854 94,217,852 Long-lived assets include property and equipment, goodwill, intangible assets, operating lease right-of-use assets and finance lease right-of-use assets. F-32 Geographic Information The following table summarizes Long-lived assets by geographic location for the years ended December 31, 2024, 2023, and 2022: December 31, 2024 2023 2022 Primary Geographical Markets U.S. $ 96,380,597 $ 103,779,506 $ 83,145,362 U.K. 18,958,174 19,863,289 18,096,412 Total long-lived assets $ 115,338,771 $ 123,642,795 $ 101,241,774 Revenues by geographic location are included in Note 2. 14. 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 Repurchase 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 Repurchase Program, which did not oblige 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 was originally set to expire on December 31, 2024. On December 20, 2024, the Board of Directors extended the expiration date of the New Repurchase Program from December 31, 2024 to June 30, 2025. 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. F-33 During the year ended December 31, 2024, the Company repurchased and subsequently cancelled 3,647,342 shares of Common Stock for $ 13,756,271 . There were no shares repurchased during the year ended December 31, 2023. 15. Stock Based Compensation Stock Options In 2021, the Company established the DocGo Inc. 2021 Equity Incentive Plan (the “Plan”) replacing Ambulnz, Inc.’s 2017 Equity Incentive Plan. The Plan reserved 16,607,894 shares of 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 December 31, 2024, approximately 4.9 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’s size and industry in order to estimate its expected stock volatility. Subsequent to the Business Combination, the Company utilized publicly available pricing. The expected term of the options represented the period of time the instruments were expected to be outstanding. The Company based the risk-free interest rate on the rate payable on the U.S. Treasury securities corresponding to the expected term of the awards at the date of grant. Expected dividend yield was zero based on the fact that the Company had not historically paid and does not intend to pay a dividend in the foreseeable future. The following assumptions were used to compute the fair value of the stock option grants during the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Risk-free interest rate 4.2 % - 4.5 % 4.1 % - 4.9 % Expected term (in years) 5.56 6.25 Volatility 61 % - 71 % 52 % - 62 % Dividend yield — % — % F-34 The following table summarizes the Company’s stock option activity under the Plan for the years ended December 31, 2024 and 2023: Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Balance as of December 31, 2022 11,571,308 $ 7.11 9.05 $ 39,389,063 Granted/vested during the year 1,566,010 7.93 — — Exercised during the year ( 514,065 ) 3.55 — — Cancelled during the year ( 680,989 ) 7.52 — — Balance as of December 31, 2023 11,942,264 7.36 8.16 3,961,556 Granted/vested during the year 506,822 3.59 — — Exercised during the year ( 16,559 ) 1.59 — — Cancelled during the year ( 4,265,031 ) 7.69 — — Balance as of December 31, 2024 8,167,496 6.98 7.32 $ 2,521,202 Options vested and exercisable as of December 31, 2024 4,944,286 $ 6.95 6.82 $ 2,233,701 The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Common Stock price and the exercise price of the stock options. The weighted average grant date fair value per share for stock option grants during the years ended December 31, 2024 and 2023 was $ 3.59 and $ 7.93 , respectively. On December 31, 2024, 2023 and 2022, the total recorded stock-based compensation related to stock option awards granted was $ 6,652,789 , $ 11,795,320 , and $ 6,232,992 , respectively. On December 31, 2024, 2023 and 2022, the total unrecognized compensation related to unvested stock option awards granted was $ 11,246,649 , $ 29,058,756 and $ 41,666,564 , respectively, which the Company expects to recognize over a weighted-average period of approximately 1.43 years. Restricted Stock Units The fair value of restricted stock units (“RSUs”) is determined on the date of grant. The Company records compensation expenses in the Consolidated Statements of Operations and Comprehensive Income on a straight-line basis over the vesting period for RSUs. The vesting period for employees and members of the Board of Directors ranges from one to four years . F-35 Activity under RSUs for the year ended December 31, 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 3,009,868 3.94 Vested ( 1,205,460 ) 4.82 Forfeited ( 159,516 ) 4.92 Balance as of December 31, 2024 4,068,987 4.63 Vested and unissued as of December 31, 2024 10,990 3.42 Non-vested as of December 31, 2024 4,057,997 4.64 The total grant-date fair value of RSUs granted during the year ended December 31, 2024 was $ 11,854,256 . For the years ended December 31, 2024, 2023 and 2022, the Company recorded stock-based compensation expense related to RSUs of $ 5,783,838 , $ 9,101,027 , and $ 1,821,579 , respectively, out of which none and $ 493,043 is included in accrued liabilities as of December 31, 2024 and 2023, respectively. On December 31, 2024, 2023 and 2022, the total unrecognized compensation related to unvested RSUs granted was $ 17,458,680 , $ 12,602,662 and $ 2,177,713 , respectively, which is expected to be recognized over a weighted-average period of approximately 2.0 years. Performance-based Stock Units The fair value of performance-based stock units (“PSUs”) is determined on the date of grant. The Company records compensation expenses in the Consolidated Statements of Operations and Comprehensive Income on a straight-line basis over the vesting period based on the grant date fair value of the awards and probability of the achievement of the specified performance target. The vesting period for employees and members of the Board of Directors ranges from one to four years . F-36 Activity under PSUs for the year ended December 31, 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 1,205,251 4.19 Vested — — Performance Adjustment ( 217,054 ) 5.16 Balance as of December 31, 2024 2,073,467 4.60 Vested and unissued as of December 31, 2024 — — Non-vested as of December 31, 2024 2,073,467 4.60 The total grant-date fair value of PSUs granted during the year ended December 31, 2024 was $ 9,529,994 . For the years ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense related to PSUs of $ 1,197,459 and $ 72,827 , respectively, which are included in accrued liabilities. As of December 31, 2024 and 2023, the Company had unrecognized compensation cost related to non-vested PSUs amounting to $ 8,332,535 and $ 5,527,166 , respectively, which is expected to be recognized over a weighted-average period of approximately 3.0 years. 16. 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. F-37 Lease Costs The table below comprises lease expenses for the years ended December 31, 2024, 2023 and 2022, respectively: December 31, 2024 2023 2022 Components of total lease cost: Operating lease expense $ 3,851,686 $ 3,418,134 $ 2,294,636 Finance lease expense: Amortization of right-of-use assets 4,617,262 6,352,754 3,236,418 Interest on lease liabilities 769,041 600,239 559,596 Finance lease expense 5,386,303 6,952,993 3,796,014 Short-term lease expense 2,580,933 1,678,487 1,201,622 Total lease cost $ 11,818,922 $ 12,049,614 $ 7,292,272 Lease Payments The table below comprises lease payments for the years ended December 31, 2024, 2023 and 2022, respectively: December 31, 2024 2023 2022 Components of total lease payments: Operating lease payment $ 3,711,545 $ 3,287,125 $ 2,294,636 Finance lease payment 4,334,463 4,270,553 2,985,568 Total lease payments $ 8,046,008 $ 7,557,678 $ 5,280,204 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 (Gain) on Lease Remeasurement During the year, the Company reassessed the use of some office spaces, resulting in the early termination of two leased office spaces. The Company recorded a loss from remeasurement of operating lease of $ 13,469 and a gain of $ 4,566 for the years ended December 31, 2024 and 2023, respectively. There were no gains or losses recorded relating to remeasurement of operating leases for the year ended December 31, 2022. F-38 Lease Position as of December 31, 2024 and 2023 Right-of-use lease assets and lease liabilities for the Company’s operating leases were recorded in the Consolidated Balance Sheets as follows: December 31, 2024 2023 Assets Lease right-of-use assets $ 11,958,698 $ 9,580,535 Total lease assets $ 11,958,698 $ 9,580,535 Liabilities Current liabilities: Lease liability - current portion $ 3,844,561 $ 2,773,020 Noncurrent liabilities: Lease liability, net of current portion 8,599,072 7,223,941 Total lease liability $ 12,443,633 $ 9,996,961 Lease Terms and Discount Rate Weighted average remaining lease term (in years) - operating leases 3.65 Weighted average discount rate - operating leases 5.86 % Undiscounted Cash Flows Future minimum lease payments under the operating leases as of December 31, 2024 are as follows: Operating Leases 2025 $ 4,475,876 2026 3,832,409 2027 2,585,529 2028 1,763,468 2029 956,779 Thereafter 304,729 Total future minimum lease payments 13,918,790 Less effects of discounting ( 1,475,157 ) Present value of future minimum lease payments $ 12,443,633 Finance Leases The Company leases vehicles under non-cancelable finance lease agreements with a liability of $ 14,725,605 , $ 11,430,465 and $ 8,646,803 for the years ended December 31, 2024, 2023 and 2022, respectively, and a right-of-use net of $ 15,337,299 , $ 12,003,919 and $ 9,039,663 for the years ended December 31, 2024, 2023 and 2022, respectively (accumulated depreciation of $ 9,128,202 , $ 11,679,823 and $ 7,906,966 as of December 31, 2024, 2023 and 2022, respectively). F-39 Loss (Gain) 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 $ 18,894 and $ 5,432 during the years ended December 31, 2024 and 2023 respectively. In June 2022, the Company reassessed its finance lease estimates relating to vehicle mileage and residual value. As a result, the Company determined to purchase the vehicles at the end of the leases, which resulted in a gain of $ 1.4 million recorded as gain on remeasurement of finance lease on the Consolidated Statements of Operations and Comprehensive Income. Lease Position as of December 31, 2024 and 2023 Right-of-use lease assets and lease liabilities for the Company’s finance leases were recorded in the Consolidated Balance Sheets as follows: December 31, 2024 2023 Assets Lease right-of-use assets $ 15,337,299 $ 12,003,919 Total lease assets $ 15,337,299 $ 12,003,919 Liabilities Current liabilities: Lease liability - current portion $ 4,694,467 $ 3,534,073 Noncurrent liabilities: Lease liability, net of current portion 10,031,138 7,896,392 Total lease liability $ 14,725,605 $ 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 December 31, 2024: Weighted average remaining lease term (in years) - finance leases 3.45 Weighted average discount rate - finance leases 5.75 % F-40 Undiscounted Cash Flows Future minimum lease payments under the finance leases as of December 31, 2024 are as follows: Finance Leases 2025 $ 5,417,251 2026 4,615,612 2027 3,396,644 2028 2,202,280 2029 660,590 Thereafter — Total future minimum lease payments 16,292,377 Less effects of discounting ( 1,566,772 ) Present value of future minimum lease payments $ 14,725,605 17. Other (Expense) Income The Company recognized $( 939,724 ), $ 1,238,313 and $ 950,264 of other (expense) income for the years ended December 31, 2024 , 2023 and 2022, respectively, as set forth in the table below. Year Ended December 31, Other (expense) income 2024 2023 2022 Interest (expense) income, net $ ( 1,929,207 ) $ 1,684,399 $ 762,685 Gain on remeasurement of warrant liabilities — — 1,127,388 Change in fair value of contingent liability 9,392,133 1,437,525 — Finite-lived intangible asset impairment ( 8,306,591 ) — — Goodwill impairment — — ( 2,921,958 ) (Loss) gain on equity method investments ( 316,044 ) ( 343,336 ) 8,919 (Loss) gain on remeasurement of operating and finance leases ( 32,363 ) ( 866 ) 1,388,273 Gain on bargain purchase — — 1,593,612 Gain (loss) on disposal of fixed assets 23,682 ( 852,544 ) ( 21,173 ) ABC litigation — ( 1,000,000 ) — Other income (expense) 228,666 313,135 ( 987,482 ) Total other (expense) income $ ( 939,724 ) $ 1,238,313 $ 950,264 18. 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 F-41 services were provided by EDTSLS to the Company. The Company’s payments to EDTSLS for Mr. Tendler’s services totaled $ 1,207,843 , $ 916,370 and $ 960,081 for the years ended December 31, 2024, 2023 and 2022, respectively. Included in accounts payable were $ 55,545 and $ 0 due to related parties as of December 31, 2024 and 2023, respectively. There are no amounts related to accrued liabilities as of December 31, 2024 and 2023 related to legal services. Subcontractor Services PrideStaff provides subcontractor services for the Company. PrideStaff is owned by a former operations manager of the Company and his spouse, and therefore, a related party. The Company made subcontractor payments to PrideStaff totaling $ 155,749 , $ 0 and $ 547,500 for the years ended December 31, 2024, 2023 and 2022, respectively. Included in accounts payable were $ 17,149 and $ 0 due to related parties as of December 31, 2024 and 2023 , respectively. Included in accrued liabilities were $ 13,097 and $ 0 due to related parties as of December 31, 2024 and 2023 related to subcontractor services. Transition Services Agr eement On October 11, 2023, the Company and Anthony Capone, who resigned as Chief Executive Officer of the Company on September 15, 2023, entered into a separation and transition services agreement (the “Transition Agreement”). Pursuant to the Transition Agreement, Mr. Capone served as a consultant to the Company until March 15, 2024 (such period, the “Consulting Period”) to advise on matters relating to business continuity and processes and transition his institutional knowledge with respect to operational and other departmental functions. As compensation for his services during the Consulting Period, and subject to his compliance with the Transition Agreement, including the execution and non-revocation of a general release of claims in favor of the Company, Mr. Capone received a monthly consulting fee of $ 45,000 and subsidized premiums for continued group health plan coverage for the duration of the Consulting Period. Mr. Capone did not receive new equity awards or incentive compensation under the Company’s equity incentive compensation program during the Consulting Period. The Transition Agreement further acknowledges and affirms that Mr. Capone will be bound by and comply with certain restrictive covenants. The Company made payments to Anthony Capone totaling $ 180,000 , $ 90,000 , and $ 0 for the years ended December 31, 2024, 2023, and 2022 respectively. Included in accounts payable were $ 0 and $ 45,000 due to related parties as of December 31, 2024, and 2023, respectively. 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 $ 105,000 in RSUs to Mr. Vashovsky under the Vashovsky Consulting Agreement for the year ended December 31, 2024. There were no amounts included in accounts payable and accrued liabilities as of December 31, 2024 and 2023 related to the Vashovsky Consulting Agreement. Consulting Agreement - Steven Katz F-42 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 served as a consultant to the Company until December 31, 2024 (the “Katz Consulting Period”). During the Katz Consulting Period, Mr. Katz provided transition advisory services relating to the Board and its committees as 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 received 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 also continued to vest under the Plan. The Company made payments to Steven Katz totaling $ 5,000 , $ 0 , and $ 0 for the years ended December 31, 2024, 2023, and 2022 respectively. Included in accounts payable and accrued liabilities were $ 2,500 and $ 0 due to related parties as of December 31, 2024 and 2023, respectively, related to the Katz Consulting Agreement. 19. Income Taxes A reconciliation of the statutory U.S. federal income tax rate to the Company’s effective tax rate consists of the following: Year Ended December 31, 2024 2023 2022 Statutory federal income tax benefit 21.00 % 21.00 % 21.00 % Permanent items 6.33 % 26.18 % 0.56 % State taxes, net of federal tax benefit 19.88 % 20.67 % 7.77 % Rate Change ( 3.57 ) % ( 0.04 ) % 0.17 % Effects of Rates Different from Statutory ( 0.35 ) % 0.04 % 0.01 % Other ( 9.73 ) % ( 29.54 ) % ( 3.64 ) % Change in valuation allowance 18.29 % ( 1.91 ) % ( 54.94 ) % Income tax provision (benefit) 51.85 % 36.40 % ( 29.07 ) % The components of income tax expense (benefit) are as follows: For the Years Ended December 31, 2024 2023 2022 Current: Federal $ 6,182,372 $ 2,555,164 $ 1,493,772 State and local 4,739,545 5,782,335 502,872 $ 10,921,917 $ 8,337,499 $ 1,996,644 Deferred: Federal $ 3,250,410 $ 1,650,695 $ ( 7,683,475 ) State and local 216,095 ( 3,256,914 ) ( 2,649,791 ) Foreign — ( 375,300 ) 375,301 3,466,505 ( 1,981,519 ) ( 9,957,965 ) Total income tax expense (benefit) $ 14,388,422 $ 6,355,980 $ ( 7,961,321 ) F-43 Deferred income taxes reflect the net tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The temporary differences that give rise to deferred tax assets and liabilities are as follows: For the Years Ended December 31, 2024 2023 Deferred tax assets: Allowance for credit loss $ 1,519,406 $ 1,683,119 Accrued expenses 901,403 799,295 Lease liability 6,001,016 4,674,177 Stock compensation 5,982,385 5,039,590 Research and development expense 1,399,066 865,800 Net operating loss 8,990,407 4,568,113 Other ( 375,247 ) ( 471,694 ) Total deferred tax asset $ 24,418,436 $ 17,158,400 Valuation allowance ( 6,187,664 ) ( 1,207,673 ) Deferred income tax assets, net of allowance $ 18,230,772 $ 15,950,727 Deferred tax liabilities: Prepaid expenses $ ( 1,007,405 ) $ ( 780,767 ) Depreciation ( 1,252,332 ) ( 3,819,069 ) Right-of-use asset ( 5,903,840 ) ( 4,544,024 ) Amortization ( 1,645,161 ) 5,081,672 Total deferred tax liability $ ( 9,808,738 ) $ ( 4,062,188 ) Deferred tax assets, net of allowance $ 8,422,034 $ 11,888,539 The Company has determined, based upon available evidence, that it is more likely than not that all of the net deferred tax asset will not be realized and, accordingly, has provided a partial valuation allowance against its net deferred tax asset as of December 31, 2024 and 2023, respectively. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, net operating loss carryback potential and tax planning strategies in making these assessments. As of December 31, 2024 ,2023 and 2022, the Company had federal net operating loss carryforwards of approximately $ 0 , $ 0 and $ 35,289,184 , respectively. As of December 31, 2024, 2023, and 2022, the Company had approximately $ 24,273,354 , $ 10,737,510 and $ 1,520,345 of foreign net operating loss carryforwards, respectively. As of December 31, 2024, 2023 and 2022, the Company had state net operating loss carryforward of approximately $ 36,878,259 , $ 36,422,543 and $ 2,592,560 , respectively. The federal net operating loss carryforwards generated after December 31, 2017 of $ 35,298,184 carry forward indefinitely. State and foreign net operating loss carryforwards generated in the tax years from 2017 to 2020 will begin to expire, if not utilized, by 2040. Utilization of the net operating loss carryforwards may be subject to an annual limitation according to Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), and similar provisions. The difference between the statutory income taxes on the Company’s pre-tax loss and the Company’s effective income tax rate during the years ended December 31, 2024 and 2023 is primarily due to a recorded valuation allowance and other state taxes. The valuation allowance for deferred tax assets as of December 31, 2024 and 2023 was $ 6,187,664 and $ 1,207,673 , F-44 respectively. The net change in the total valuation allowance for the years ended December 31, 2024, and 2023 was an increase (decrease) of $ 4,979,991 and $( 312,672 ), respectively. In assessing the realizability of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future table income during the periods in which those temporary differences become deductible. Management considers the scheduled reversals of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. The Company recognizes interest accrued to unrecognized tax benefits and penalties as income tax expense. The Company accrued no penalties or interest during the years ended December 31, 2024, 2023, and 2022. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and foreign jurisdictions where applicable based on the statute of limitations that apply in each jurisdiction. As of December 31, 2024, open years related to all jurisdictions are 2023, 2022 and 2021. The Company has an on-going tax audit in California as of December 31, 2024. 20. 401(k) Plan The Company established a 401(k) plan in January 2022 that qualifies as a deferred compensation arrangement under Section 401 of the Internal Revenue Code. All U.S. employees that complete two months of service with the Company are eligible to participate in the plan. The Company did not make any employer contributions to this plan as of December 31, 2024. 21. Legal Proceedings From time to time, the Company may be involved as a defendant in legal actions that arise in the normal course of its business. In the opinion of management, the Company has adequate legal defense on all legal actions, and the results of any such proceedings would not materially impact the Consolidated Financial Statements of the Company. The Company provides disclosure and records loss contingencies in accordance with the loss contingencies accounting guidance. In accordance with such guidance, the Company establishes accruals for such matters when potential losses become probable and can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss in its Consolidated Financial Statements. 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. Given the overlapping claims and time periods presented in the California Labor Actions, in an effort to reach a global resolution, these actions were mediated concurrently on February 5, 2025. The parties reached a resolution, in principle, at the mediation. At the time of this filing, the parties are working to finalize the settlement documents memorializing that resolution. Stockholder Actions F-45 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 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 was named as a nominal defendant in both actions, and the complaints named 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 purported to assert claims for breach of fiduciary duty and other related claims on behalf of the Company. Both asserted 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. On September 6, 2024, the plaintiff in the Daboul Action voluntarily discontinued the action. On November 25, 2024, the parties filed a stipulation and proposed order for voluntary dismissal of the Shetterly Action, which the judge signed. 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 alleged 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 sought various forms of monetary and injunctive relief. Before Ambulnz NY responded to the complaint, the parties engaged in early mediation that resulted in a settlement in principle. The parties are still negotiating the final terms of the settlement, but the plaintiff has since dismissed the case and intends to re-file in Florida state court once the settlement is finalized and seek approval of the settlement there. The settlement in principle is on a claims-made basis, so the Company cannot reasonably estimate the amount that will be paid at this time. However, 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 and the expected settlement. 22. 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 F-46 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. 23. Subsequent Events Acquisition of Professional Technicians, Inc. On February 10, 2025, Holdings acquired 100 % of the outstanding shares of common stock of Professional Technicians, Inc. (“PTI”). The aggregate purchase price consisted of $ 4,000,000 in cash consideration, $ 3,800,000 of which was paid at closing. The Company also agreed to pay PTI up to an additional $ 1,500,000 in deferred consideration upon meeting certain performance conditions through the period beginning on April 1, 2025 and ending on March 31, 2026. F-47 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.