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DocGo Inc.

DocGo Inc.DCGOEarnings & Financial Report

Nasdaq · Health Care · Services-Health Services

DocGo Inc. is a U.S.-headquartered mobile healthcare and on-demand medical service provider. It offers a range of solutions including in-home urgent care, diagnostic testing, telehealth consultations, and corporate wellness programs, serving individual patients, health systems, enterprise clients, and public sector organizations across North America.

What changed in DocGo Inc.'s 10-K — 2022 vs 2023

Top changes in DocGo Inc.'s 2023 10-K

605 paragraphs added · 531 removed · 452 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

78 edited+22 added−5 removed56 unchanged
Success in the medical transportation industry is based primarily on the ability to improve customer service, such as on-time performance and efficient call intake; to provide comprehensive clinical care; and to recruit, train and motivate employees, particularly ambulance crews who have direct contact with patients and healthcare personnel. Pricing, billing and reimbursement expertise are also critical.
Success in the medical transportation industry is based primarily on the ability to improve customer service, such as on-time performance and efficient call intake; provide comprehensive clinical care; and recruit, train and motivate employees, particularly ambulance crews who have direct contact with patients and healthcare personnel. Pricing, billing and reimbursement expertise are also critical.
Competition in the mobile health industry is primarily based on scale; ease of use, convenience and accessibility; brand recognition; breadth, depth, and efficacy of telehealth services; technology; clinical quality; customer support; cost; reputation; and customer satisfaction and value.
Competition in the mobile health industry is primarily based on scale; ease of use, convenience and accessibility; brand recognition; breadth, depth and efficacy of telehealth and mobile health services; technology; clinical quality; customer support; cost; reputation; and customer satisfaction and value.
In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA-covered entities and their business associates for compliance. It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the fine paid by the violator under the Civil Monetary Penalties Law paid by the violator.
In addition, HIPAA mandates that HHS conduct periodic compliance audits of HIPAA-covered entities and their business associates for compliance. It also tasks HHS with establishing a methodology whereby harmed individuals who were the victims of breaches of unsecured PHI may receive a percentage of the fine paid by the violator under the Civil Monetary Penalties Law.
See the section of this Annual Report on Form 10-K titled “ Risk Factors — Risks Related to DocGo’s Legal and Regulatory Environment. ” Available Information We file or furnish electronically with the SEC our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports.
See the section of this Annual Report titled “ Risk Factors — Risks Related to DocGo’s Legal and Regulatory Environment. ” Available Information We file or furnish electronically with the SEC our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports.
Federal Fraud and Abuse Laws The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their implementing regulations and related rules (collectively, “HIPAA”), established several separate criminal penalties for making false or fraudulent claims to insurance companies and other non-governmental payors of healthcare services.
Federal Fraud and Abuse Laws The federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations and related rules (collectively, “HIPAA”), established several separate criminal penalties for making false or fraudulent claims to insurance companies and other non-governmental payors of healthcare services.
HIPAA’s requirements to “covered entities” and to their independent contractors, agents and other “business associates” that create, receive, maintain or transmit PHI in connection with providing services to covered entities. Although we are a covered entity under HIPAA, we are also a business associate of other covered entities when we are working on behalf of our healthcare provider partners.
HIPAA’s requirements apply to “covered entities” and their independent contractors, agents and other “business associates” that create, receive, maintain or transmit PHI in connection with providing services to covered entities. Although we are a covered entity under HIPAA, we are also a business associate of other covered entities when we are working on behalf of our healthcare provider partners.
As the applicable laws and regulations change, we may be required to make conforming modifications in our business processes from time to time. In many jurisdictions where we operate, neither our current nor our anticipated business model, in particular with respect to our Mobile Health related services, has been the subject of judicial or administrative interpretation.
As the applicable laws and regulations change, we may be required to make conforming modifications in our business processes from time to time. In many jurisdictions where we operate, neither our current nor our anticipated business model, in particular with respect to our Mobile Health Services, has been the subject of judicial or administrative interpretation.
In light of recent enforcement activity, and statements from HHS, we expect increased federal and state HIPAA privacy and security enforcement efforts. 8 HIPAA also requires HHS to adopt national standards establishing electronic transaction standards that all healthcare providers must use when submitting or receiving certain healthcare transactions electronically.
In light of recent enforcement activity and statements from HHS, we expect increased federal and state HIPAA privacy and security enforcement efforts. HIPAA also requires HHS to adopt national standards establishing electronic transaction standards that all healthcare providers must use when submitting or receiving certain healthcare transactions electronically.
Treasury’s Office of Foreign Assets Control (“OFAC”) and economic sanctions laws; various privacy, insurance, tax, tariff and trade laws and regulations; corporate governance, privacy, data protection, data mining, data transfer, labor and employment, intellectual property, consumer protection and investment laws and regulations; discriminatory licensing procedures; required localization of records and funds; and limitations on dividends and repatriation of capital.
Treasury’s Office of Foreign Assets Control and economic sanctions laws; various privacy, insurance, tax, tariff and trade laws and regulations; corporate governance, privacy, data protection, data mining, data transfer, labor and employment, intellectual property, consumer protection and investment laws and regulations; discriminatory licensing procedures; required localization of records and funds; and limitations on dividends and repatriation of capital.
Verification monitoring ensures that all employees meet current state requirements. This tool verifies Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services (“HHS”) exclusions at the state and federal levels and performs sanction screening for licensed personnel and 24/7 monitoring of state board licenses.
Verification monitoring ensures that all employees meet current state requirements. This tool verifies Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services (“HHS”) exclusions at the state and federal levels and performs sanction screening for licensed personnel and 24/7 monitoring of state licenses.
In addition, the government and some courts have taken the position that claims presented in violation of the various statutes, including the Stark Law, and failure to return overpayments in a timely manner can form the basis for liability under the federal False Claims Act discussed below based on the contention that a provider impliedly certifies compliance with all applicable laws, regulations and other rules when submitting claims for reimbursement.
In addition, the government and some courts have taken the position that claims presented in violation of the various statutes, including the Stark Law, and failure to return overpayments in a timely manner can form the basis for liability under the federal False Claims Act discussed above based on the contention that a provider impliedly certifies compliance with all applicable laws, regulations and other rules when submitting claims for reimbursement.
Consequently, our healthcare facility customers are better able to order, track and manage transportation requests and patient movement, thereby enhancing utilization of resources and cost. Our ShareLink TM technology is designed to provide our healthcare partners and patients with real-time vehicle locations and accurate estimated time of arrivals and helps deliver valuable peace of mind.
In addition, our ShareLink TM technology is designed to provide our healthcare partners and patients with real-time vehicle locations and accurate estimated time of arrivals and helps deliver valuable peace of mind. Consequently, our healthcare facility customers are better able to order, track and manage transportation requests and patient movement, thereby enhancing utilization of resources and cost.
In addition to base hourly wages, DocGo also offers employees bonuses based on certain performance metrics, medical insurance, paid time off, and an equity incentive plan for our frontline clinicians with broad-based rank and file participation — a program that provides the opportunity to acquire an ownership stake in our company.
In addition to base hourly wages, DocGo also offers employees bonuses based on certain performance metrics, medical insurance, paid time off and an equity incentive plan for our frontline clinicians with broad-based participation — a program that provides the opportunity to acquire an ownership stake in the Company.
Competition could also increase from large technology companies, such as Apple, Amazon, Facebook, Verizon, or Microsoft, who may develop their own telehealth solutions or acquire existing industry participants, such as Amazon’s acquisition of One Medical in February 2023, as well as from large retailers like Walmart, CVS and others.
Competition could also increase from large technology companies, such as Apple, Amazon, Facebook, Verizon or Microsoft, who may develop their own telehealth or mobile health solutions or acquire existing industry participants, such as Amazon’s acquisition of One Medical in February 2023, as well as from large retailers like Walmart, CVS and others.
This is in line with our belief that all of our employees are partners in the business, and we want everyone to “think like an owner,” with the best long-term interests of the Company and its shareholders as a driver of decision making.
This is in line with our belief that all of our employees are partners in the business, and we want everyone to “think like an owner,” with the best long-term interests of the Company and its stockholders as a driver of decision making.
The federal government has used the statute to prosecute a wide variety of alleged false claims and fraud allegedly perpetrated against Medicare and state healthcare programs, including but not limited to coding errors, billing for services not rendered, the submission of false cost or other reports, billing for services at a higher payment rate than appropriate, billing under a comprehensive code as well as under one or more component codes included in the comprehensive code, billing for care that is not considered medically necessary and false reporting of risk-adjusted diagnostic codes to Medicare Advantage (or Part C) Plans.
The federal government has used the statute to prosecute a wide variety of alleged false claims and fraud allegedly perpetrated against Medicare and state healthcare programs, including but not limited to coding errors, billing for services not rendered, the submission of false cost or other reports, billing for services at a higher payment rate than appropriate, billing under a comprehensive code as well as under one or more component codes included in the comprehensive code, 7 Table of Contents billing for care that is not considered medically necessary and false reporting of risk-adjusted diagnostic codes to Medicare Advantage (“MA”) (or Part C) plans.
We make available on our website at www.DocGo.com, under “Investors,” free of charge, copies of these reports, and amendments thereto, as soon as reasonably practicable after filing or furnishing these reports with the SEC. 11
We make copies of these reports and amendments thereto available on our website at www.DocGo.com, under “Investors,” free of charge as soon as reasonably practicable after filing or furnishing these reports with the SEC. 11 Table of Contents
We believe that this approach makes us a more attractive employer and supports a strong pipeline of top-tier talent across all levels of our company. 3 Employee Engagement We routinely monitor employee satisfaction, and work to maintain an environment where employees can contribute and thrive. DocGo has been recognized for its excellent workplace culture and employee satisfaction.
We believe that this approach makes us a more attractive employer and supports a strong pipeline of top-tier talent across all levels of the Company. Employee Engagement We routinely monitor employee satisfaction and work to maintain an environment where employees can contribute and thrive. DocGo has been recognized for its excellent workplace culture and employee satisfaction.
We are also the registered holder of a variety of domain names that include “Ambulnz”, “DocGo” and similar variations. Our proprietary platform, mobile application, and associated software code and firmware are protected as trade secrets and our confidential information, as appropriate. We also license the use of certain technology and other intellectual property rights owned and controlled by others.
We are also the registered holder of a variety of domain names that include “Ambulnz,” “DocGo” and similar variations. Our proprietary platform, mobile application and associated software code and firmware are protected as trade secrets and our confidential information, as appropriate. We also license the use of certain technology and other intellectual property rights owned and controlled by others.
In certain instances, we also share a portion of our revenues with our partners. These contractual relationships are subject to various state laws that prohibit fee splitting or the practice of medicine by lay entities or persons and are intended to prevent unlicensed persons from interfering with or influencing the physician’s professional judgment.
In certain instances, we also share a portion of our revenues with our partners. These contractual relationships are subject to various state laws that prohibit fee splitting or the practice of 10 Table of Contents medicine by lay entities or persons and are intended to prevent unlicensed persons from interfering with or influencing the physician’s professional judgment.
If an exception is not satisfied, then the parties to the arrangement could be subject to sanctions, including denial of payment for claims for services provided in violation of the statute, mandatory refunds of amounts collected for such services, civil penalties of up to $25,820 for each violation and twice the dollar value of each such service as well as possible exclusion from future participation in the federally funded healthcare programs, including Medicare and Medicaid.
If an exception is not satisfied, then the parties to the arrangement could be subject to sanctions, including denial of payment for claims for services provided in violation of the statute, mandatory refunds of amounts collected for such services, civil penalties of up to $29,899 for each violation and twice the dollar value of each such service as well as possible exclusion from future participation in the federally funded healthcare programs, including Medicare and Medicaid.
In addition to providing greater convenience to patients, our Mobile Health solutions help reduce unnecessary burdens on healthcare systems, by freeing up their finite, in-person resources to address more urgent and critical patient needs. DocGo’s Mobile Health clinical services, which we expanded into the home and workplace in 2020, facilitate medical care via a turnkey suite of integrated, “last-mile” solutions.
In addition to providing greater convenience to patients, our Mobile Health Services help reduce unnecessary burdens on healthcare systems by freeing up their finite, in-person resources to address more urgent and critical patient needs. DocGo’s clinical Mobile Health Services, which we expanded into the home and workplace in 2020, facilitate medical care via a turnkey suite of integrated, technology-enabled solutions.
An important aspect of our strategy is to form contractual relationships with different third-party providers pursuant to which we provide them or their patients with medical transportation and/or telehealth services and they pay us for those services out of the fees they collect from patients and third-party payors.
An important aspect of our strategy is to form contractual relationships with different third-party providers pursuant to which we provide them or their patients with medical transportation and/or mobile health services and they pay us for those services out of the fees they collect from patients and third-party payors.
Our staff of ten training coordinators runs a robust, in-person onboarding program to help train employees and keep them up to date in relevant procedures and protocols.
Our staff of Training and Education Coordinators runs a robust, in-person onboarding program to help train employees and keep them up to date in relevant procedures and protocols.
In particular, HIPAA establishes privacy and security standards that limit the use and disclosure of protected health information (“PHI”), and require the implementation of administrative, physical, and technical safeguards to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form.
In particular, HIPAA establishes privacy and security standards that limit the use and disclosure of protected health information (“PHI”) and require the implementation of administrative, physical and technical safeguards to ensure the confidentiality, integrity and availability of individually 8 Table of Contents identifiable health information in electronic form.
A person who engages in a scheme to circumvent the Stark Law’s prohibitions may be fined up to $172,137 for each applicable arrangement or scheme. Amounts collected on claims related to prohibited referrals must be reported and refunded generally within 60 days after the date on which the overpayment was identified.
A person who engages in a scheme to circumvent the Stark Law’s prohibitions may be fined up to $199,338 for each applicable arrangement or scheme. Amounts collected on claims related to prohibited referrals must be reported and refunded generally within 60 days after the date on which the overpayment was identified.
The penalties for a violation of the federal False Claims Act range from $5,500 to $11,000 (adjusted for inflation) for each false claim, plus up to three times the amount of damages caused by each false claim, which can be as much as the amounts received directly or indirectly from the government for each such false claim.
The federal False Claims Act provides for penalties that range from $5,500 to $11,000 (adjusted for inflation) for each false claim, plus up to three times the amount of damages caused by each false claim, which can be as much as the amounts received directly or indirectly from the government for each such false claim.
Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental programs as well as civil and criminal penalties, including fines of $104,330 per violation, plus up to three times the amount of the unlawful remuneration, and imprisonment of up to ten years.
Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental programs as well as civil and criminal penalties, including fines of $120,816 per violation, plus up to three times the amount of the unlawful remuneration, and imprisonment of up to ten years.
Other Regulations Our operations are subject to various state hazardous waste and non-hazardous medical waste disposal laws. These laws do not classify as hazardous most of the waste produced from healthcare services. Occupational Safety and Health Administration regulations require employers to provide workers who are occupationally subject to blood or other potentially infectious materials with prescribed protections.
Other Regulations Our operations are subject to various state hazardous waste and non-hazardous medical waste disposal laws. These laws do not classify as hazardous most of the waste produced from healthcare services. OSHA regulations require employers to provide workers who are occupationally subject to blood or other potentially infectious materials with prescribed protections.
Certain federal courts have held that the Anti-Kickback Statute can be violated if “one purpose” of a payment is to induce referrals.
Certain federal courts have held that the Anti-Kickback Statute can be violated if “one 9 Table of Contents purpose” of a payment is to induce referrals.
Since our founding in 2015, through more than 8 million patient interactions, we have created a care delivery model that helps provide better care outside of the physical walls of the healthcare system. We began by developing a state-of-the-art, intuitive platform designed to drive greater efficiency and improved access to patient care.
Since 2015, through nearly 8 million patient interactions, we have created a care delivery model that helps provide better care outside of the physical walls of the healthcare system. We began by developing a state-of-the-art, intuitive platform designed to drive greater efficiency and improved access to patient care.
In addition to the employees above, as of December 31, 2022, the Company engaged the services of approximately 2,135 people, primarily in the healthcare professional area, through a variety of subcontracted labor agencies and some independent contractors. Recruiting We consider our employees to be our most valuable assets.
In addition to the employees above, as of December 31, 2023, the Company engaged the services of approximately 3,456 people, primarily in the healthcare professional area, some through a variety of subcontracted labor agencies and some as independent contractors. Recruiting We consider our employees to be our most valuable assets.
Competitors within the industry vary considerably in type and identity by market, with our primary competitors being small, locally owned operators as well as local fire departments and other local government providers. Larger private provider competitors include Rural/Metro Corporation, Falck, American Medical Response (AMR), Southwest Ambulance, Paramedics Plus and Acadian Ambulance.
Competitors within the industry vary considerably in type and identity by market, with our primary competitors being small, locally owned operators as well as local fire departments and other local government providers. Larger private provider competitors include Modivcare, Falck, Global Medical Response, Southwest Ambulance, Paramedics Plus and Acadian Ambulance.
We offer a pay package which we believe is innovative within our industry.
We offer a pay package that we believe is innovative within our industry.
For the fiscal year ended December 31, 2022, we generated approximately 74.0% of our revenues from the solutions provided by our Mobile Health segment. The success of our care delivery model is reflected in our NPS, or Net Promoter Score, which is one of the most widely accepted standards of customer experience metrics.
For the fiscal year ended December 31, 2023, we generated approximately 71% of our revenues from the solutions provided by our Mobile Health Services segment. The success of our care delivery model is reflected in our Net Promoter Score (“NPS”), which is one of the most widely accepted standards of customer experience metrics.
Among other things, the federal False Claims Act authorizes the imposition of up to three times the government’s damages and significant per claim civil penalties on any “person” (including an individual, organization or company) who, among other acts: ● knowingly presents or causes to be presented to the federal government a false or fraudulent claim for payment or approval; ● knowingly makes, uses or causes to be made or used a false record or statement material to a false or fraudulent claim; ● knowingly makes, uses or causes to be made or used a false record or statement material to an obligation to pay the government, or knowingly conceals; ● knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the federal government; or ● conspires to commit the above acts. 6 In addition, amendments to the federal False Claims Act and Social Security Act impose severe penalties for the knowing and improper retention of overpayments collected from government payors.
Among other things, the federal False Claims Act authorizes the imposition of up to three times the government’s damages and significant per claim civil penalties on any “person” (including an individual, organization or company) who, among other acts: • knowingly presents or causes to be presented to the federal government a false or fraudulent claim for payment or approval; • knowingly makes, uses or causes to be made or used a false record or statement material to a false or fraudulent claim; • knowingly makes, uses or causes to be made or used a false record or statement material to an obligation to pay the government; • knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the federal government; or • conspires to commit the above acts.
The competitive landscape is highly fragmented for both medical mobility services and “last-mile” healthcare solutions, ranging in each case from small, locally owned and operated providers to large national organizations.
The competitive landscape is highly fragmented for both technology-enabled mobile healthcare solutions and medical transportation services, ranging in each case from small, locally owned and operated providers to large national organizations.
Our system is utilized for credential tracking and Continuous Quality Improvement, so that our staff maintains all required credentials relevant to their positions with our company. Employees and their supervisors are automatically notified at designated times of recertification deadlines. Course completion, assignments, and other compliance requirements are tracked in this system as well.
We also use a management system for credential tracking and Continuous Quality Improvement to help ensure that our staff maintains all required credentials relevant to their positions with the Company. Through this system, employees and their supervisors are automatically notified at designated times of recertification deadlines. Course completion, assignments and other compliance requirements are tracked in this system as well.
In this event, failure to comply could lead to adverse judicial or administrative action against us and/or our healthcare provider partners, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, loss of licenses, and the need to make changes to the terms of engagement with our provider partners that interfere with our business. 10 International Regulation We expect to continue to expand our operations internationally through both organic growth and acquisitions.
In this event, failure to comply could lead to adverse judicial or administrative action against us and/or our healthcare provider partners, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, loss of licenses and the need to make changes to the terms of engagement with our provider partners that interfere with our business.
As a result of the Merger, Ambulnz is a wholly-owned subsidiary of DocGo and each share of Series A preferred stock of Ambulnz, no par value (“Ambulnz Preferred Stock”), Class A common stock of Ambulnz, no par value (“Ambulnz Class A Common Stock”), and Class B common stock of Ambulnz, no par value (“Ambulnz Class B Common Stock”, together with Ambulnz Class A Common Stock, “Ambulnz Common Stock”) was cancelled and converted into the right to receive a portion of merger consideration issuable as common stock of DocGo, par value $0.0001 (“Common Stock”), pursuant to the terms and conditions set forth in the Merger Agreement.
As a result of the Business Combination, Ambulnz became a wholly-owned subsidiary of the Company, and each share of Series A preferred stock of Ambulnz, no par value, Class A common stock of Ambulnz, no par value, and Class B common stock of Ambulnz, no par value, was cancelled and converted into the right to receive a portion of merger consideration issuable as Common Stock, pursuant to the terms and conditions set forth in the Merger Agreement.
We recognized that a number of these services could easily be performed by EMTs, paramedics and LPNs under the guidance of physicians, but in the comfort of a patient’s home or workplace.
We recognized that a number of these services could easily be performed by LPNs, RNs, APPs and other clinicians under the guidance of higher licensed practitioners, but in the comfort of a patient’s home or workplace.
Our comprehensive training programs utilize a full range of resources, including print materials, training modules, webinars, seminars, and videos provided by the Centers for Disease Control and Prevention, and federal, state, and local entities, medical institutions, and public health agencies. In December 2021, we launched DocGo EMS Academy, a full-service program dedicated to recruiting and training EMS clinicians.
Our comprehensive training programs utilize a full range of resources, including print materials, training modules, webinars, seminars and videos provided by the Centers for Disease Control and Prevention and federal, state and local entities, medical institutions and public health agencies.
On June 19, 2020, the U.S. Department of Justice (“DOJ”) issued a final rule announcing adjustments to federal False Claims Act penalties, under which the per claim range increases to a range from $11,803 to $23,607 per claim, so long as the underlying conduct occurred after November 2, 2015.
On February 12, 2024, the U.S. Department of Justice issued a final rule announcing adjustments to federal False Claims Act penalties, under which the per claim range increases to a range from $13,946 to $27,894 per claim, so long as the underlying conduct occurred after November 2, 2015.
This amount was comprised of $43.4 million of cash held in Motion’s trust account from its initial public offering, net of DocGo’s transaction costs and underwriters’ fees of $9.6 million, and $114.6 million of cash in connection with the concurrent PIPE private placement of shares of common stock to certain investors at a price of $10.00 per share (the “ PIPE Financing”), net of $10.4 million in transaction costs.
This amount was comprised of (i) $43.4 million of cash held in the Company’s trust account established in connection with its initial public offering, net of the Company’s transaction costs and underwriters’ fees of $9.6 million, and (ii) $114.6 million of cash from the sale of shares of Common Stock to certain investors at a price of $10.00 per share 5 Table of Contents in a private placement that closed concurrently with the Business Combination (the “PIPE Financing”), net of $10.4 million in transaction costs incurred in connection with the PIPE Financing.
We are an official American Heart Association Training Site and offer all of our employees in-house basic life support (BLS), advanced cardiovascular life support (ACLS), and pediatric advanced life support (PALS) training and certification.
We are also an American Heart Association Training Site and offer in-house basic life support (BLS), advanced cardiovascular life support (ACLS) and pediatric advanced life support (PALS) training and certification to our clinicians who require such training.
In connection with the Closing, the registrant changed its name from Motion Acquisition Corp. to DocGo Inc. As contemplated by the Merger Agreement and as described in Motion’s definitive proxy statement/consent solicitation/prospectus filed with the U.S.
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.
While we do not believe that any single competitor offers our full suite of mobility solutions and “last-mile” healthcare services, numerous companies offer components of medical mobility transportation and/or telehealth services that compete with our solutions.
While we do not believe that any single competitor offers our vertically integrated suite of Mobile Health Services and Transportation Services, numerous companies offer components of mobile health and/or transportation services that compete with our solutions.
The Affordable Care Act, as currently structured, provides that claims tainted by a violation of the federal Anti-Kickback Statute are false for purposes of the federal False Claims Act. Some courts have held that filing claims or failing to refund amounts collected in violation of the Stark Law can form the basis for liability under the federal False Claims Act.
Some courts have held that filing claims or failing to refund amounts collected in violation of the Stark Law can form the basis for liability under the federal False Claims Act.
However, conduct and business arrangements that do not fully satisfy each applicable safe harbor may result in increased scrutiny by government enforcement authorities, such as the OIG. 9 Federal Stark Law Section 1877 of the Social Security Act, also known as the physician self-referral law and commonly referred to as the Stark Law, prohibits a physician who has a financial relationship, or who has an immediate family member who has a financial relationship, with entities providing certain designated health services from referring Medicare patients to such entities for the furnishing of designated health services, unless an exception applies.
Federal Stark Law Section 1877 of the Social Security Act, also known as the physician self-referral law and commonly referred to as the Stark Law, prohibits a physician who has a financial relationship, or who has an immediate family member who has a financial relationship, with entities providing certain designated health services from referring Medicare patients to such entities for the furnishing of designated health services, unless an exception applies.
Our international operations are subject to different, and sometimes more stringent, legal and regulatory requirements, which vary widely by jurisdiction, including anti-corruption laws such as the Foreign Corrupt Practices Act (“FCPA”), and corresponding foreign laws, including the U.K. Bribery Act 2010; regulation by the U.S.
International Regulation We expect to continue to expand our operations internationally through both organic growth and acquisitions. Our international operations are subject to different, and sometimes more stringent, legal and regulatory requirements, which vary widely by jurisdiction, including anti-corruption laws such as the Foreign Corrupt Practices Act of 1977, as amended, and corresponding foreign laws, including the U.K.
For instance, we have a policy requiring all companies we work with to execute confidentiality agreements upon commencement of any business relationship with us. Our agreements with customers include confidentiality and non-disclosure provisions, as well.
For instance, we have a policy requiring companies we work with to execute confidentiality agreements upon commencement of a business relationship with us where appropriate. Our agreements with customers who are privy to confidential or proprietary information also include confidentiality and non-disclosure provisions.
We help provide reliable, efficient access to local clinical services, including primary and specialty care, dialysis treatments for chronic care management, and transfers between clinical settings.
Transportation Services DocGo’s digitally-enabled medical transportation solutions are offered under the Ambulnz brand. We help provide reliable, efficient access to local clinical services, including primary and specialty care, dialysis treatments for chronic care management and transfers between clinical settings.
We partner with leading national health systems, insurance carriers, private organizations and employers, state and local governments and managed care organizations, to provide our Mobile Health solutions, including NYC Health + Hospitals, New York City Department of Homeless Services, Dollar General, and Mount Sinai Health System.
We partner with leading national health systems, insurance carriers, private organizations and employers, state and local governments and managed care organizations to provide our Mobile Health Services, including NYC Health + Hospitals, New York City Department of Housing Preservation and Development, Dollar General and Martin Luther King Jr. Memorial Hospital in Los Angeles, CA.
Securities and Exchange Commission (the “SEC”) on October 14, 2021 (the “Prospectus”), Merger Sub was merged with and into Ambulnz, with Ambulnz continuing as the surviving corporation (the “Merger” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”).
Securities and Exchange Commission (the “SEC”) on October 14, 2021, Merger Sub merged with and into Ambulnz, with Ambulnz continuing as the surviving corporation.
Scores are measured from a range of -100 to +100 with scores over 30 commonly viewed as good and over 50 considered excellent. Our Q4 mobile health NPS score was 76, which is a testament to our customers’ strong perception regarding the value of DocGo’s services. Transportation Services DocGo’s digitally-enabled medical mobility solutions are offered under the Ambulnz brand.
Scores are measured from a range of -100 to +100 with scores over 30 commonly viewed as good and over 50 considered excellent. Our Mobile Health Services NPS score for the year ended December 31, 2023 was 81, which is a testament to our customers’ strong perception regarding the value of our services.
Violations of HIPAA may result in civil and criminal penalties. The civil penalties range from $119 to $59,522 per violation, with a cap of $1.8 million per year for violations of the same standard during the same calendar year. However, a single breach incident can result in violations of multiple standards. We must also comply with HIPAA’s breach notification rule.
Violations of HIPAA may result in civil and criminal penalties. For the lowest penalty tier, the civil penalties range from $137 to $68,928 per violation, with a cap of approximately $2.1 million per year for violations of the same standard during the same calendar year. However, a single breach incident can result in violations of multiple standards.
Every vehicle in our fleet is equipped with our proprietary technology platform, which is integrated with some of the nation’s largest electronic medical record (“EMR”) systems. 2 This integration is designed to provide seamless transfer of electronic patient information and discharge data to our healthcare provider customers, which helps improve order speed and accuracy, and helps eliminate a myriad of manual processes.
This integration with EMR systems is designed to provide seamless transfer of electronic patient information and discharge data to our healthcare provider customers, which helps improve order speed and accuracy and eliminate a myriad of manual processes.
These provisions are intended to punish some of the same conduct in the submission of claims to private payors as the federal False Claims Act covers in connection with governmental health programs. 7 In addition, the Civil Monetary Penalties Law imposes civil administrative sanctions for, among other violations, inappropriate billing of services to federally funded healthcare programs and employing or contracting with individuals or entities who are excluded from participation in federally funded healthcare programs.
In addition, the Civil Monetary Penalties Law imposes civil administrative sanctions for, among other violations, inappropriate billing of services to federally funded healthcare programs and employing or contracting with individuals or entities who are excluded from participation in federally funded healthcare programs.
“Motion” prior to the Closing Date and after the Closing Date, “DocGo”, ) consummated the previously announced business combination (the “Closing”) pursuant to that certain Agreement and Plan of Merger dated March 8, 2021 (the “Merger Agreement”), by and among Motion, Motion Merger Sub Corp., a Delaware corporation and a direct wholly owned subsidiary of Motion (“Merger Sub”), and Ambulnz, Inc., a Delaware corporation (“Ambulnz”).
The Business Combination On November 5, 2021, the Company (then known as Motion Acquisition Corp.) 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.
We require our employees, independent contractors and consultants to execute confidentiality and proprietary agreements in connection with their employment or consulting relationships with us and to assign to us inventions conceived during the term of their employment or engagement while using our property or which relate to our business.
In addition, we require our employees, independent contractors and consultants to execute confidentiality and proprietary agreements in connection with their employment or engagement with us and to assign to us inventions conceived during the term of their employment or engagement while using our property or which relate to our business. 6 Table of Contents Upon discovery of potential infringement of our intellectual property, we assess and, when necessary, take action to protect our rights as appropriate.
Despite the significant growth of telehealth services in recent years, we believe the market is still in its infancy and new competitors with similar and novel models will enter the market as it matures. 5 Intellectual Property We own and use trademarks and service marks on or in connection with our services, including both unregistered common law marks and registered trademarks.
Despite the significant growth of telehealth services in recent years, we believe the market is still in its infancy and new competitors with similar and novel models will enter the market as it matures.
Our services and solutions include on-site evaluation, diagnostics, triage, and treatment as detailed in the following table: As patients seek more efficient, more convenient healthcare options, we believe our virtual care-enabling solutions are poised for significant growth, by delivering in-person patient care previously inaccessible outside of the more traditional healthcare settings.
As patients seek more efficient, more convenient healthcare options, we believe our virtual care-enabling solutions are poised for significant growth by delivering a combination of in-person and virtual patient care previously inaccessible outside of the more traditional healthcare settings. The power of our model is the modality of care, specifically its scalability and lowered cost basis.
Under the breach notification rule, covered entities must notify affected individuals without unreasonable delay in the case of a breach of unsecured PHI, which may compromise the privacy, security or integrity of the PHI. In addition, notification must be provided to HHS and the local media in cases where a breach affects more than 500 individuals.
We must also comply with HIPAA’s breach notification rule. Under the breach notification rule, covered entities must notify affected individuals without unreasonable delay in the case of a breach of unsecured PHI, which may compromise the privacy, security or integrity of the PHI.
Through DocGo On-Demand and additional Mobile Health programs including expanded population offerings, we provide holistic health, social and shelter coordination services to underserved communities.
Through DocGo On-Demand and additional Mobile Health Services programs, we provide care for a diverse group of customers, including municipalities, hospitals and health systems, insurers, physician practices, businesses and employers. Additionally, our expanded population health offerings provide holistic health, social and shelter coordination services to underserved communities.
Combining classroom education with practical hands-on learning, the programs are designed to help existing healthcare professionals advance their careers and provide aspiring entry-level workers with the opportunity to enter the healthcare industry. DocGo EMS Academy is tailored to EMS workers, from EMTs to paramedics.
In December 2021, we launched DocGo EMS Academy, a full-service program dedicated to recruiting and training emergency medical services (“EMS”) clinicians. Combining classroom education with practical hands-on learning, the program is designed to help existing healthcare professionals advance their careers and provide aspiring entry-level workers with the opportunity to enter the healthcare industry.
As of December 31, 2022, we had over 3,200 employees, including healthcare professionals, field management personnel and corporate support staff, as represented in the table below. Healthcare professionals consist of EMTs, paramedics, LPNs, RNs, APPs, clinicians and related support staff; field management personnel includes supervisors and managers; and corporate support staff includes software development, billing, finance, sales, marketing, and executives.
Healthcare professionals consist of emergency medical technicians (“EMTs”), paramedics, LPNs, RNs, APPs, clinicians and related support staff; field management personnel includes supervisors and 3 Table of Contents managers; and corporate support staff includes software development, billing, finance, human resources, legal and compliance, sales, marketing and executives.
The laws and regulations governing our business and interpretations of those laws and regulations continue to expand, are subject to frequent change and may become more restrictive.
Regulation Our operations are subject to comprehensive United States federal, state and local rules and regulations and comparable multiple levels of international regulation in the jurisdictions in which we do business. The laws and regulations governing our business and interpretations of those laws and regulations continue to expand, are subject to frequent change and may become more restrictive.
Full-time Part-time Total Healthcare Professionals 1,570 1,180 2,750 Field Management 138 3 141 Corporate Support 356 5 361 Total 2,064 1,188 3,252 None of our employees are represented by a labor union or subject to any collective bargaining agreement.
Full-time Part-time Total Healthcare Professionals 2,176 1,234 3,410 Field Management Personnel 469 6 475 Corporate Support Staff 270 9 279 Total 2,915 1,249 4,164 None of our employees are represented by a labor union or subject to any collective bargaining agreement.
The failure of a financial relationship to meet all of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the Anti-Kickback Statute.
The failure of a financial relationship to meet all of the applicable safe harbor criteria does not necessarily mean that the particular arrangement violates the Anti-Kickback Statute. However, conduct and business arrangements that do not fully satisfy each applicable safe harbor may result in increased scrutiny by government enforcement authorities, such as the OIG.
This comprehensive training program is available in select states and offers free tuition for students who continue their employment with DocGo, which we anticipate could assist us in our recruiting efforts. 4 Merger with Motion Acquisition Corp. On November 5, 2021 (the “Closing Date”), DocGo Inc., a Delaware corporation (formerly known as Motion Acquisition Corp.
DocGo EMS Academy is tailored to EMS workers, from EMTs to paramedics. This comprehensive training program is available in select states and offers free tuition for students who continue their employment with DocGo, which we anticipate could assist us in our recruiting efforts.
Breaches affecting fewer than 500 individuals must be reported to HHS on an annual basis. The regulations also require business associates of covered entities to notify the covered entity of breaches by the business associate. State attorneys general also have the right to prosecute HIPAA violations committed against residents of their states.
In addition, notification must be provided to HHS and the local media in cases where a breach affects more than 500 individuals. Breaches affecting fewer than 500 individuals must be reported to HHS on an annual basis. The regulations also require business associates of covered entities to notify the covered entity of breaches by the business associate.
One measure of this are the hundreds of positive reviews our employees have given DocGo on leading recruitment websites. DocGo’s employee rating on Indeed is currently 4.3 out of 5.0, and our employee rating on Glassdoor is 4.8 out of 5.0 - ratings that are significantly higher than our industry averages .
As of the date of this Annual Report, DocGo’s employee rating on Indeed is 4.3 out of 5.0, and our employee rating on Glassdoor is 4.2 out of 5.0 - ratings that are significantly higher than many of our competitors in the healthcare industry .
Training We have also created a number of programs to foster the professional development of our employees and to help attract top-tier talent.
Additionally, DocGo earned a Great Place to Work TM certification, which is based entirely on feedback from employees, for the second year in a row in 2023. Training We have created a number of programs to foster the professional development of our employees and help attract top-tier talent.
We have registered “Ambulnz” and our corporate logo in the United States and the United Kingdom. We have registered “DocGo” word mark and design in the both the United States and the United Kingdom and are in the process of registering both in the EU.
Intellectual Property We own and use trademarks and service marks on or in connection with our services, including both unregistered common law marks and registered trademarks. We have registered “Ambulnz” and our corporate logo in the United States and the United Kingdom. We have registered the “DocGo” word mark and design in the United States, United Kingdom and EU.
Working under the guidance of prescribing physicians, our network (which includes both company employees and personnel from a variety of subcontracted labor agencies and some independent contractors) of more than 5,000 medical clinicians including Emergency Medical Technicians (“EMTs”), paramedics, licensed practical nurses (“LPNs”), registered nurses (“RNs”) Advanced Practice Providers (“APPs”) and support staff, provides a wide range of tests, procedures and interventions that previously required a visit to a traditional healthcare setting. 1 Our Segments Mobile Health Solutions The traditional healthcare model requires patients to interact with many levels of healthcare providers — including receptionists, nurses, lab technicians and physicians — for even the most routine tests, procedures and interventions.
Working under the guidance of prescribing physicians, our network of more than 700 medical clinicians as of December 31, 2023 (which includes Company employees, personnel from a variety of subcontracted labor agencies and some independent contractors) provides a wide range of tests, procedures, care gap closures and interventions that previously required a visit to a traditional healthcare setting.
As of December 31, 2022, we had 381 ambulances in service throughout the United States, and more than 300 in the United Kingdom. For the fiscal year ended December 31, 2022, we generated approximately 26.0% of our revenues from this segment. Human Capital Resources We strive to hire the best talent across our industry, with a focus on inspiring performance.
As of December 31, 2023, we had 580 vehicles in service throughout the United States and another 294 in the United Kingdom. For the fiscal year ended December 31, 2023, we generated approximately 29% of our revenues from our Transportation Services segment.
We have also implemented a virtual training program for company policy and procedures training, mandated OSHA training courses, hazardous materials awareness, FEMA Incident Command Systems training (100, 200, 700, 800), clinical skills, customer service, diversity, HIPAA regulations, safety and compliance, on-site traffic control, and annual documentation training.
We have also implemented a self-paced online training program for Company policy and procedures training, mandated Occupational Safety and Health Administration (“OSHA”) training courses, clinical skills, customer service, diversity, HIPAA regulations, safety and compliance and annual documentation training. In addition, our drivers are trained in the Coaching the Emergency Vehicle Operator (CEVO) Ambulance course.
The major competitors include much larger, national or regional telehealth providers such as Dispatch Health, Teladoc, Amwell, and One Medical (acquired by Amazon in February 2023) that generally provide telehealth on behalf of self-insured employers and insurance plans. These competitors, however, generally do not provide direct patient care or “last-mile” care on behalf of the provider organization.
Major competitors (in each case relative to only some of our products or services) include much larger, national or regional telehealth or in-home healthcare service providers such as DispatchHealth, Modivcare, Addus HomeCare, Option Care Health, Teladoc, Amwell, Signify Health (acquired by CVS in March 2023), MedArrive, Biofourmis and One Medical (acquired by Amazon in February 2023).
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Item 1. Business. Our Company DocGo, Inc. (“DocGo,”“we,” “us,” “our” and “the Company”) aims to redefine access to healthcare. We strive to deliver high-quality, cost-effective healthcare mobility solutions and unlock the further promise and potential of telehealth treatment through our “last-mile” care capabilities.
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Item 1. Business. Our Company DocGo is redefining healthcare. DocGo is leading the proactive healthcare revolution with an innovative care delivery platform that includes mobile health services, virtual care management and ambulance services. DocGo is helping to reshape the traditional four-wall healthcare system by providing high quality, highly accessible care to patients where and when they need it.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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DocGo relies on its contractual relationships with its healthcare provider partners. DocGo significantly relies on its contractual relationships with its healthcare provider partners and other strategic partners and alliances to generate revenues, expand into new markets and further penetrate existing markets.
DocGo relies on its contractual relationships with its healthcare provider partners and other strategic partners. DocGo significantly relies on its contractual relationships with its healthcare provider partners and other strategic partners and alliances to generate revenues, expand into new markets and further penetrate existing markets.
Measures taken to protect DocGo’s systems, those of its contractors or third-party service providers, or the PHI, other PII, or other sensitive information DocGo or contractors or third-party service providers process or maintain, may not adequately protect DocGo from the risks associated with the collection, storage, processing and transmission of such sensitive information.
Measures taken to protect DocGo’s systems, those of its contractors or third-party service providers, or the PHI, other PII, or other sensitive information DocGo or its contractors or third-party service providers process or maintain, may not adequately protect DocGo from the risks associated with the collection, storage, processing and transmission of such sensitive information.
A security breach or privacy violation that leads to disclosure or unauthorized use or modification of, or that prevents access to or otherwise impacts the confidentiality, security, or integrity of, patient information, including PHI or other PII, or other sensitive information that DocGo or its contractors or third-party service providers maintain or otherwise process, could harm DocGo’s reputation, compel it to comply with breach notification laws, cause it to incur significant costs for remediation, fines, penalties, notification to individuals, measures intended to repair or replace systems or technology and to prevent future occurrences, cause potential increases in insurance premiums, and require DocGo to verify the accuracy of database contents, resulting in increased costs or loss of revenue.
A security breach or privacy violation that leads to disclosure or unauthorized use or modification of, or that prevents access to or otherwise impacts the confidentiality, security, or integrity of, patient information, including PHI, other PII or other sensitive information that DocGo or its contractors or third-party service providers maintain or otherwise process, could harm DocGo’s reputation; compel it to comply with breach notification laws; cause it to incur significant costs for remediation, fines, penalties, notification to individuals or measures intended to repair or replace systems or technology and to prevent future occurrences; cause potential increases in insurance premiums; and require DocGo to verify the accuracy of database contents, resulting in increased costs or loss of revenue.
A significant number of employees have joined DocGo in recent years as it has grown, and DocGo’s success is dependent on its ability to maintain and instill its culture, align its talent with its business needs, engage its employees and inspire them to be open to change, to innovate and to maintain a customer-driven focus when delivering its services.
A significant number of employees have joined DocGo in recent years as it has grown, and DocGo’s success is dependent on its ability to maintain and instill its culture, align its talent with its business needs, engage its employees and inspire them to be open to change, innovate and maintain a customer-driven focus when delivering DocGo’s services.
In addition, integrating new contracts, particularly those in new geographic locations, could prove more costly, and could require more management time than DocGo anticipates. Any failure to accurately predict costs or the timing of payments from customers or to negotiate an adequate profit margin could have a material adverse effect on DocGo’s business, financial condition and results of operations.
In addition, integrating new contracts, particularly those in new geographic locations, could prove more costly and require more management time than DocGo anticipates. Any failure to accurately predict costs or the timing of payments from customers or to negotiate an adequate profit margin could have a material adverse effect on DocGo’s business, financial condition and results of operations.
DocGo’s continued success and growth depend in part upon its ability to enhance its solutions with next-generation technologies and to develop or to acquire and market new services to access new consumer populations.
DocGo’s continued success and growth depend in part upon its ability to enhance its solutions with next-generation technologies and to develop or acquire and market new services to access new consumer populations.
In connection with DocGo’s insurance programs, management establishes reserves for losses and related expenses within its self-insured retention limits, which represent estimates involving actuarial and statistical projections, at a given point in time, of DocGo’s expectations of the ultimate resolution and administration costs of losses it has incurred in respect of its liability risks.
In connection with DocGo’s self-insurance programs, management establishes reserves for losses and related expenses within its self-insured retention limits, which represent estimates involving actuarial and statistical projections, at a given point in time, of DocGo’s expectations of the ultimate resolution and administration costs of losses it has incurred in respect of its liability risks.
Insurance reserves inherently are subject to uncertainty. DocGo’s reserves are based on historical claims, demographic factors, industry trends, severity and exposure factors and other actuarial assumptions. DocGo uses these actuarial estimates to determine appropriate reserves, and DocGo’s reserves could be significantly affected if current and future occurrences differ from historical claim trends and expectations.
Insurance reserves are inherently subject to uncertainty. DocGo’s reserves are based on historical claims, demographic factors, industry trends, severity and exposure factors and other actuarial assumptions. DocGo uses these actuarial estimates to determine appropriate reserves, and DocGo’s reserves could be significantly affected if current and future occurrences differ from historical claim trends and expectations.
Borrowings under the Revolving Facility bear interest at a per annum rate equal to: (i) at DocGo’s option, the (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin. DocGo is also required to pay a commitment fee to the lenders under the Revolving Facility in respect of any unutilized commitments thereunder.
Borrowings under the Revolving Facility bear interest at a per annum rate equal to: (i) at DocGo’s option, (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin. DocGo is also required to pay a commitment fee to the lenders under the Revolving Facility in respect of any unutilized commitments thereunder.
DocGo’s future ability to make scheduled payments on its future debt obligations also depends on its then-current financial condition, results of operations and capital resources, which are subject to, among other things: the business, financial, economic, industry, competitive, regulatory and other factors discussed in these risk factors, and on other factors, some of which are beyond its control, including: the level of capital expenditures it makes, including those for acquisitions, if any; its debt service requirements; fluctuations in its working capital needs; its ability to borrow funds and access capital markets; and restrictions on debt service payments and its ability to make working capital borrowings for future debt service payments contained in the Credit Agreement.
DocGo’s ability to make scheduled payments on its future debt obligations also depends on its then-current financial condition, results of operations and capital resources, which are subject to, among other things: the business, financial, economic, industry, competitive, regulatory and other factors discussed in these risk factors, and on other factors, some of which are beyond its control, including: the level of capital expenditures it makes, including those for acquisitions, if any; its debt service requirements; fluctuations in its working capital needs; its ability to borrow funds and access capital markets; and restrictions on debt service payments and its ability to make working capital borrowings for future debt service payments contained in the Credit Agreement.
DocGo may incur significant additional indebtedness in the future, including off-balance sheet financings, trade credit, contractual obligations and general and commercial liabilities. Although the Credit Agreement contains certain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
DocGo may incur significant indebtedness in the future, including off-balance sheet financings, trade credit, contractual obligations and general and commercial liabilities. Although the Credit Agreement contains certain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the additional indebtedness incurred in compliance with these restrictions could be substantial.
Certain provisions of the Certificate of Incorporation (as the same may be amended and/or restated from time to time) and the Bylaws (as the same may be amended and/or restated from time to time) may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by DocGo’s stockholders.
Certain provisions of DocGo’s certificate of incorporation (as the same may be amended and/or restated from time to time) and bylaws (as the same may be amended and/or restated from time to time) may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by DocGo’s stockholders.
If DocGo is unable to prevent or mitigate such security breaches or privacy violations or implement satisfactory remedial measures, or if it is perceived that DocGo has been unable to do so, its operations or the functionality of its innovative technology could be disrupted; it may be unable to provide access to its systems; it could lose customers; it could see negative repercussions to its reputation, adverse impacts on customers, loss of customer and investor confidence, financial loss; and it could be subject to governmental investigations or other actions, regulatory or contractual penalties, and other claims and liabilities.
If DocGo is unable to prevent or mitigate such security breaches or privacy violations or implement satisfactory remedial measures, or if it is perceived that DocGo has been unable to do so, its operations or the functionality of its technology could be disrupted; it may be unable to provide access to its systems; it could lose customers; it could see negative repercussions to its reputation, adverse impacts on customers, loss of customer and investor confidence, and financial loss; and it could be subject to governmental investigations or other actions, regulatory or contractual penalties, and other claims and liabilities.
These provisions provide for, among other things: ● A classified board of directors; ● the ability of the Board to issue one or more series of preferred stock; ● advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at DocGo’s annual meetings; ● certain limitations on convening special stockholder meetings; ● limiting the ability of stockholders to act by written consent; ● supermajority provisions to amend the bylaws and certain sections of the certificate of incorporation; and ● the Board with express authority to make, alter or repeal the Bylaws.
These provisions provide for, among other things: • a classified board of directors; • the ability of the Board to issue one or more series of preferred stock; • advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at DocGo’s annual meetings; • certain limitations on convening special stockholder meetings; • limiting the ability of stockholders to act by written consent; • supermajority provisions to amend the bylaws and certain sections of the certificate of incorporation; and • providing the Board with express authority to make, alter or repeal the bylaws.
If any disruption results in the destruction of some or all of DocGo’s fleet, significant disruption to DocGo’s business, contributes to a general decrease in local, regional or global macroeconomic activity or otherwise impairs DocGo’s ability to meet customer demands, or if DocGo is not able to develop or execute on an adequate recovery plan in such circumstances, DocGo’s business, financial condition and results of operations could be materially adversely affected.
If any disruption results in the destruction of some or all of DocGo’s fleet, causes significant disruption to DocGo’s business, contributes to a general decrease in local, regional or global macroeconomic activity or otherwise impairs DocGo’s ability to meet customer demands, or if DocGo is not able to develop or execute on an adequate recovery plan in such circumstances, DocGo’s business, financial condition and results of operations could be materially adversely affected.
In addition, in some instances, DocGo may agree to indemnify our clients against certain third-party claims, which may include claims that DocGo’s solutions infringe the intellectual property rights of such third parties. DocGo’s business could be adversely affected by any significant disputes between DocGo and its clients as to the applicability or scope of DocGo’s indemnification obligations to them.
In addition, in some instances, DocGo may agree to indemnify its clients against certain third-party claims, which may include claims that DocGo’s solutions infringe the intellectual property rights of such third parties. DocGo’s business could be adversely affected by any significant disputes between DocGo and its clients as to the applicability or scope of DocGo’s indemnification obligations to them.
Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, which may or may not be covered by DocGo’s existing insurance or may require DocGo to modify its services or require it to stop serving certain customers or geographies, all of which could negatively impact its existing business and its ability to grow.
Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, which may or may not be covered by DocGo’s existing insurance or may require DocGo to modify its services or stop serving certain customers or geographies, all of which could negatively impact its existing business and ability to grow.
In some markets in which DocGo operates, the lack of availability of clinical personnel has become a significant operating issue that all healthcare providers face. This labor shortage has, and could continue in the future, require DocGo to increase wages and benefits to recruit and retain qualified personnel or to identify and contract with more expensive temporary personnel.
In some markets in which DocGo operates, the lack of availability of clinical personnel has become a significant operating issue that all healthcare providers face. This labor shortage has required, and could continue in the future to require, DocGo to increase wages and benefits to recruit and retain qualified personnel or to identify and contract with more expensive temporary personnel.
These and other risks and uncertainties that impact DocGo’s ability to timely bill and collect on its receivables or the amount DocGo can charge for its services could adversely affect DocGo’s business, financial condition or results of operations. 26 DocGo may not accurately assess the costs it will incur under new revenue opportunities.
These and other risks and uncertainties that impact DocGo’s ability to timely bill and collect on its receivables or the amount DocGo can charge for its services could adversely affect DocGo’s business, financial condition or results of operations. DocGo may not accurately assess the costs it will incur under new revenue opportunities.
In addition, under the Credit Agreement, in the event of a default, the Agent could seek foreclosure of the Agent’s lien on the assets of DocGo and its subsidiary guarantors and exercise other customary secured creditor rights. 41 DocGo might incur future debt, which could further increase the risks to its financial condition described above.
In addition, under the Credit Agreement, in the event of a default, the Agent could seek foreclosure of the Agent’s lien on the assets of DocGo and its subsidiary guarantors and exercise other customary secured creditor rights. DocGo might incur future debt, which could further increase the risks to its financial condition described above.
DocGo’s Common Stock is listed on Nasdaq under the symbol “DCGO.” DocGo is required to meet continued listing requirements for its securities to continue to be listed on Nasdaq, including having a minimum number of public securities holders and a minimum stock price. DocGo cannot assure you that it will continue to meet those listing requirements in the future.
The Common Stock is listed on Nasdaq under the symbol “DCGO.” DocGo is required to meet continued listing requirements for its securities to continue to be listed on Nasdaq, including having a minimum number of public securities holders and a minimum stock price. DocGo cannot assure you that it will continue to meet those listing requirements in the future.
However, U.S. federal net operating losses generated in 2019 and forward are not subject to expiration and, if not utilized by fiscal 2021, are only available to offset 80% of taxable income each year due to changes in tax law attributable to the passage of Tax Cuts and Jobs Act.
However, U.S. federal net operating losses generated in 2019 and forward are not subject to expiration and, if not utilized by fiscal 2021, are only available to offset 80% of taxable income each year due to changes in tax law attributable to the passage of Tax Cuts and Jobs Act of 2017.
The certificate of incorporation provides that the exclusive forum provision is applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
DocGo’s certificate of incorporation provides that the exclusive forum provision is applicable to the fullest extent permitted by applicable law, subject to certain exceptions. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
DocGo’s recent growth and its acquisition strategy have placed, and will continue to place, significant demands on management’s time, which may divert their attention from DocGo’s day-to-day business operations and may lead to significant due diligence and other expenses regardless of whether DocGo pursues or consummates any potential acquisition.
DocGo’s recent growth and its acquisition strategy have placed, and may continue to place, significant demands on management’s time, which may divert their attention from DocGo’s day-to-day business operations and may lead to significant due diligence and other expenses regardless of whether DocGo pursues or consummates any potential acquisition.
Changes to or any failure to comply with applicable laws and regulations could also have a material adverse effect on DocGo’s business, financial condition and results of operations. 32 DocGo’s ability to utilize its net operating loss carryforwards and certain other tax attributes may be limited.
Changes to or any failure to comply with applicable laws and regulations could also have a material adverse effect on DocGo’s business, financial condition and results of operations. DocGo’s ability to utilize its net operating loss carryforwards and certain other tax attributes may be limited.
DocGo cannot predict the timing of any contemplated transactions, and there can be no assurances that DocGo will be able to identify suitable acquisition opportunities in the geographies into which it expects to grow or, if it does, that any transaction can be consummated on terms acceptable to it, if at all.
DocGo cannot predict the timing of any contemplated transactions, and there can be no assurances that DocGo will identify suitable acquisition opportunities in the geographies into which it expects to grow or, if it does, that any transaction can be consummated on terms acceptable to it, if at all.
For example, execution under DocGo’s medical transportation services contracts requires that an ambulance or other necessary fleet vehicle be available and within a certain proximity and the time of need and, if one is not available, the customer can and will seek alternative options.
For example, execution under DocGo’s medical transportation services contracts requires that an ambulance or other necessary fleet vehicle be available and within a certain proximity at the time of need and, if one is not available, the customer can and will seek alternative options.
These defects and errors, and any failure by DocGo to identify and address them, could result in loss of revenue or market share, diversion of development resources, harm to DocGo’s reputation and increased service and maintenance costs. Defects or errors may discourage existing or potential clients from purchasing our solution from DocGo.
These defects and errors, and any failure by DocGo to identify and address them, could result in loss of revenue or market share, diversion of development resources, harm to DocGo’s reputation and increased service and maintenance costs. Defects or errors may discourage existing or potential clients from purchasing DocGo’s solution.
DocGo takes certain administrative, physical and technological safeguards to address these risks, such as by requiring contractors and other third-party service providers who handle this PHI, other PII and other sensitive information to enter into agreements that contractually obligate them to use reasonable efforts to safeguard such PHI, other PII, and other sensitive information.
DocGo takes certain administrative, physical and technological safeguards to address these risks, such as requiring contractors and other third-party service providers who handle this PHI, other PII and other sensitive information to enter into agreements that contractually obligate them to use reasonable efforts to safeguard such information.
DocGo cannot predict the likelihood, timing or substance of U.S. tax proposals and will continue to monitor the progress of such proposals, as well as other global tax reform initiatives. DocGo continues to monitor changes in tax laws in the U.S. and the impact of proposed and enacted legislation in the various foreign jurisdictions in which it operates.
DocGo cannot predict the likelihood, timing or substance of U.S. tax proposals and will continue to monitor the progress of such proposals, as well as other global tax reform initiatives. DocGo continues to monitor changes in tax laws in the U.S. and the impact of proposed and enacted legislation in the foreign jurisdictions in which it operates.
A finding of non-compliance and any resulting payment delays, refund demands or other sanctions could have a material adverse effect on DocGo’s business, financial condition or results of operations. 38 Reductions in Medicare reimbursement rates or changes in the rules governing the Medicare program could have a material adverse effect on DocGo.
A finding of non-compliance and any resulting payment delays, refund demands or other sanctions could have a material adverse effect on DocGo’s business, financial condition or results of operations. Reductions in Medicare reimbursement rates or changes in the rules governing the Medicare program could have a material adverse effect on DocGo.
Government regulations in both DocGo’s domestic and international markets can also delay or prevent expansion or the introduction of new service offerings or require changes to some of DocGo’s current service offerings, which could negatively impact the success of DocGo’s strategies and financial results.
Government regulations in both DocGo’s domestic and international markets could also delay or prevent expansion or the introduction of new service offerings or require changes to some of DocGo’s current service offerings, which could negatively impact the success of DocGo’s strategies and financial results.
Even if DocGo has an existing contract with a healthcare provider, the contract does not create any exclusive relationship and even if DocGo is given preferred status, the customer often still does business with one or more of DocGo’s competitors.
Even if DocGo has an existing contract with a healthcare provider, the contract does not create any exclusive relationship, and even if DocGo is given preferred status, the customer often still conducts business with one or more of DocGo’s competitors.
Any changes in third-party service levels at DocGo’s data centers or any disruptions or other performance problems with DocGo’s solution could adversely affect DocGo’s reputation and may damage DocGo’s clients’ and consumers’ stored files or result in lengthy interruptions in DocGo’s services.
Any changes in third-party service levels at DocGo’s data centers or AWS or any disruptions or other performance problems with DocGo’s solution could adversely affect DocGo’s reputation and may damage DocGo’s clients’ and consumers’ stored files or result in lengthy interruptions in DocGo’s services.
If one or more of these analysts cease coverage of DocGo or fail to publish reports on it regularly, DocGo could lose visibility in the market, which in turn could cause its stock price or trading volume to decline.
Furthermore, if one or more of these analysts cease coverage of DocGo or fail to publish reports on it regularly, DocGo could lose visibility in the market, which in turn could cause its stock price or trading volume to decline.
Some open-source licenses contain express requirements, which may be triggered under certain circumstances, that licensees make available source code for modifications or derivative works created or prohibit such modifications or derivative works from being licensed for a fee.
Some open-source licenses contain express requirements, which may be triggered under certain circumstances, that licensees make available source code for modifications or derivative works or prohibit such modifications or derivative works from being licensed for a fee.
The pool of qualified healthcare professionals, including EMTs, paramedics, LPNs and nurses, available to staff DocGo’s broad spectrum of contracts and customer needs is limited and DocGo invests significant resources to attract, train and retain these professionals.
The pool of qualified healthcare professionals, including EMTs, paramedics, LPNs and other nurses, available to staff DocGo’s broad spectrum of contracts and customer needs is limited, and DocGo invests significant resources to attract, train and retain these professionals.
These limitations could adversely affect its operating performance, growth, profitability and financial condition, which would make it more difficult for it to generate cash flow sufficient to satisfy its obligations under its future indebtedness.
These limitations could adversely affect DocGo’s operating performance, growth, profitability and financial condition, which would make it more difficult for it to generate cash flow sufficient to satisfy its obligations under its future indebtedness.
In addition, if DocGo undergoes an “ownership change” — generally defined as a greater than 50% cumulative change in the equity ownership of certain shareholders over a rolling three-year period — under Section 382 of the Internal Revenue Code, DocGo’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset future taxable income or taxes may be limited.
In addition, if DocGo undergoes an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended (generally defined as a greater than 50% cumulative change in the equity ownership of certain shareholders over a rolling three-year period), DocGo’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset future taxable income or taxes may be limited.
Although the Merger did not constitute such an ownership change, DocGo may experience ownership changes in the future as a result of changes in its stock ownership, some of which may not be within DocGo’s control, which could materially reduce or eliminate DocGo’s ability to use these losses or tax attributes to offset future taxable income or tax and have an adverse effect on its business, financial condition and results of operations.
Although the Business Combination did not constitute such an ownership change, DocGo may experience ownership changes in the future as a result of changes in its stock ownership, some of which may not be within DocGo’s control, which could materially reduce or eliminate DocGo’s ability to use these losses or tax attributes to offset future taxable income or tax and have an adverse effect on its business, financial condition and results of operations.
DocGo’s ability to rely on these services of third-party vendors could be impaired as a result of the failure of such providers to comply with applicable laws, regulations and contractual covenants, or as a result of events affecting such providers, such as power loss, telecommunication failures, software or hardware errors, computer viruses, cyber incidents and similar disruptive problems, fire, flood and natural disasters.
DocGo’s ability to rely on these services of third-party vendors, including AWS, could be impaired as a result of the failure of such providers to comply with applicable laws, regulations and contractual covenants, or as a result of events affecting such providers, such as power loss, telecommunication failures, software or hardware errors, computer viruses, cyber incidents and similar disruptive problems, fire, flood and natural disasters.
If its future indebtedness were to be accelerated, there can be no assurance that DocGo would have, or be able to obtain, sufficient funds to repay such future indebtedness in full.
If its indebtedness were to be accelerated, there can be no assurance that DocGo would have, or be able to obtain, sufficient funds to repay such indebtedness in full.
The terms of DocGo’s Credit Agreement and potential future debt arrangements could restrict its current and future operations, particularly its ability to respond to changes or to take certain actions.
The terms of the Credit Agreement and potential future debt arrangements could restrict its current and future operations, particularly its ability to respond to changes or to take certain actions.
Such securities also may be governed by an indenture or other instrument containing covenants restricting its operating flexibility. Additionally, any convertible or exchangeable securities that DocGo issues in the future may have rights, preferences and privileges more favorable than those of Common Stock. Separately, additional financing may not be available on favorable terms, or at all.
Such securities also may be governed by an indenture or other instrument containing covenants restricting DocGo’s operating flexibility. Additionally, any convertible or exchangeable securities that DocGo issues in the future may have rights, preferences and privileges more favorable than those of Common Stock. Separately, additional financing may not be available on favorable terms, or at all.
Labor expenses (which includes both directly employed personnel as well as subcontracted labor) are DocGo’s largest cost, representing approximately 69% and 60% of its 2022 and 2021 revenues, respectively. DocGo competes, in a highly competitive labor market, with other healthcare providers to attract healthcare professionals, including EMTs, paramedics and nurses, to support its operations.
Labor expenses (which includes both directly employed personnel as well as subcontracted labor) are DocGo’s largest cost, representing approximately 73%, 69% and 60% of its 2023, 2022 and 2021 revenues, respectively. DocGo competes with other healthcare providers in a highly competitive labor market to attract healthcare professionals, including EMTs, paramedics and nurses, to support its operations.
Even if DocGo generates net income in a given year, there remains the likelihood that the Company could incur net losses in any given quarter, given the fluctuating nature of revenues and expenses, particularly given the significant costs that are incurred during the beginning stages of new projects, coupled with marketing and personnel costs incurred for developing potential new business lines.
Even if DocGo generates net income in a given year, there remains the likelihood that it could incur net losses in any given quarter, given the fluctuating nature of revenues and expenses, particularly given the significant costs that are incurred during the beginning stages of new projects, coupled with marketing and personnel costs incurred for developing potential new business lines.
DocGo may also be required to expend significant capital and other resources to address problems caused by security breaches. Despite DocGo’s implementation of security measures, cyberattacks are becoming more sophisticated and frequent. As a result, DocGo or its third-party service providers may be unable to anticipate these techniques or to implement adequate protective measures.
DocGo may also be required to expend significant capital and other resources to address problems caused by security breaches or other cybersecurity incidents. Despite DocGo’s implementation of security measures, cyberattacks are becoming more sophisticated and frequent. As a result, DocGo or its third-party service providers may be unable to anticipate these techniques or to implement adequate protective measures.
In addition, the shares of Common Stock reserved for future issuance under DocGo’s equity incentive plans will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144, as applicable.
In addition, the shares of Common Stock reserved for future issuance under DocGo’s equity incentive plans will become eligible for sale in the public market once those shares are issued, subject to provisions relating to various vesting agreements and, in some cases, limitations on volume and manner of sale applicable to affiliates under Rule 144 under the Securities Act, as applicable.
Since DocGo’s inception in 2015, it has experienced rapid growth in the United States and more recently, internationally in the United Kingdom, and it expects to continue to grow in the future.
Since DocGo’s inception, it has experienced rapid growth in the United States and more recently, internationally in the United Kingdom, and it expects to continue to grow in the future.
Various other factors may also cause system failures, including power outages, catastrophic events, inadequate or ineffective redundancy, issues with upgrading or creating new systems or platforms, flaws in third-party software or services, errors or intentional acts by DocGo’s employees or third-party service providers, or breaches in the security of these systems or platforms.
Various other factors may also cause system failures, including power outages, catastrophic events, inadequate or ineffective redundancy, issues with upgrading or creating new systems or platforms, flaws in third-party software or services, errors or intentional acts by DocGo’s employees or third-party service providers, breaches in the security of these systems or platforms or other cybersecurity incidents.
There can be no guarantee that upon expiration of the PHE such restrictions will not be reinstated or changed in a way that adversely affects DocGo’s current or future telehealth offerings. Accordingly, DocGo must monitor its compliance with law in every jurisdiction in which it operates, on a regular basis.
There can be no guarantee that upon expiration of the Extension such restrictions will not be reinstated or changed in a way that adversely affects DocGo’s current or future telehealth offerings. Accordingly, DocGo must monitor its compliance with law in every jurisdiction in which it operates, on a regular basis.
Accordingly, shares registered under such registration statements will be available for sale in the open market. In the future, DocGo may also issue its securities in connection with investments or acquisitions. The amount of shares of Common Stock issued in connection with an investment or acquisition could constitute a material portion of DocGo’s then-outstanding shares of Common Stock.
Accordingly, shares registered under such registration statements will be available for sale in the open market. In the future, DocGo may also issue its securities in connection with investments or acquisitions. The number of shares of Common Stock issued in connection with an investment or acquisition could constitute a material portion of DocGo’s then-outstanding shares of Common Stock.
Because DocGo’s decision to issue debt or equity in the future will depend on market conditions and other factors, it cannot predict or estimate the amount, timing, nature or success of DocGo’s future capital raising efforts. As a result, future capital raising efforts may reduce the market price of Common Stock and be dilutive to existing stockholders.
Because DocGo’s decision to issue debt or equity in the future will depend on market conditions and other factors, it cannot predict or estimate the amount, timing, nature or success of DocGo’s future capital raising efforts. As a result, future capital raising efforts may reduce the market price of Common Stock and be dilutive to existing stockholders. Item 1B.
DocGo also believes there are several smaller, private organizations providing in-home or in-site care utilizing different, higher cost healthcare providers.
DocGo also believes there are several smaller, private organizations providing in-home or on-site care utilizing different, higher cost healthcare providers.
In addition, our ability to deliver DocGo’s Internet-based services depends on the development and maintenance of the infrastructure of the Internet by third parties. This includes maintenance of a reliable network backbone with the necessary speed, data capacity, bandwidth capacity and security. Our services are designed to operate without interruption in accordance with DocGo’s service level commitments.
In addition, DocGo’s ability to deliver its Internet-based services depends on the development and maintenance of the infrastructure of the Internet by third parties. This includes maintenance of a reliable network backbone with the necessary speed, data capacity, bandwidth capacity and security. DocGo’s services are designed to operate without interruption in accordance with DocGo’s service level commitments.
Although DocGo maintains a security and privacy damages insurance policy, the coverage under DocGo’s policies may not be adequate to compensate DocGo for all losses that may occur related to the services provided by DocGo’s third-party vendors. In addition, DocGo may not be able to continue to obtain adequate insurance coverage at an acceptable cost, if at all.
Although DocGo maintains a security and privacy damages insurance policy, the coverage under DocGo’s policies may not be adequate to compensate DocGo for all losses that may occur related to the services provided by DocGo’s third-party vendors. In addition, DocGo may not be able to continue to maintain adequate insurance coverage at an acceptable cost, if at all.
Many states have laws that prohibit business corporations such as DocGo from practicing medicine, employing physicians, exercising control over medical judgments or decisions of physicians or other health care professionals (such as EMTs and nurses), or engaging in certain business arrangements such as fee-splitting, with each of the foregoing activities collectively referred to as the “corporate practice of medicine.” In some states these prohibitions are expressly stated in a statute or regulation, while in other states the prohibition is a matter of judicial or regulatory interpretation.
Many states have laws that prohibit business corporations such as DocGo from practicing medicine, employing physicians, exercising control over medical judgments or decisions of physicians or other healthcare professionals (such as EMTs and nurses), or engaging in certain business arrangements such as fee-splitting, with each of the foregoing activities collectively referred to as the “corporate practice of medicine.” In some states these prohibitions are expressly stated in a statute or regulation, while in other states the prohibition is a matter of judicial or regulatory interpretation.
In addition, if accessibility of various apps is limited by government actions, the full functionality of devices may not be available to its members. Moreover, third-party platforms, services, and offerings are constantly evolving, and DocGo may not be able to modify its platform to assures its compatibility with those third parties.
In addition, if accessibility of various apps is limited by government actions, the full functionality of devices may not be available to its members. Moreover, third-party platforms, services and offerings are constantly evolving, and DocGo may not be able to modify its platform to ensure its compatibility with those third parties.
DocGo also enters into confidentiality and invention assignment agreements with its employees and consultants and enters into confidentiality agreements with certain of its third-party providers and strategic partners. These laws, procedures and restrictions provide only limited protection and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed, or misappropriated.
DocGo also enters into confidentiality and invention assignment agreements with certain of its employees and consultants and enters into confidentiality agreements with certain of its third-party providers and strategic partners. These laws, procedures and restrictions provide only limited protection, and any of DocGo’s intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated.
Material performance problems, defects or errors in DocGo’s existing or new software-based products and services may arise in the future and may result from interface of our solution with systems and data that DocGo did not develop and the function of which is outside of DocGo’s control or undetected in our testing.
Material performance problems, defects or errors in DocGo’s existing or new software-based products and services may arise in the future and may result from interface of DocGo’s solution with systems and data that DocGo did not develop and the function of which is outside of DocGo’s control or undetected in its testing.
Correction of defects or errors could prove to be impossible or impracticable. The costs incurred in correcting any defects or errors may be substantial and could have a material adverse effect on DocGo’s financial condition and results of operations. DocGo invested in and implemented upgraded information systems and processes in 2022.
Correction of defects or errors could prove to be impossible or impracticable. The costs incurred in correcting any defects or errors may be substantial and could have a material adverse effect on DocGo’s financial condition and results of operations. DocGo invested in and implemented upgraded information systems and processes in 2023.
As the first comprehensive consumer privacy legislation in the U.S., the CCPA created where applicable (some information may be exempt from most of CCPA’s/CPRA’s requirements if subject to HIPAA, for example), which were further expanded by the CPRA.
As the first comprehensive consumer privacy legislation in the U.S., the CCPA created new consumer rights where applicable (some information may be exempt from most of CCPA’s/CPRA’s requirements if subject to HIPAA, for example), which were further expanded by the CPRA.
Certain of DocGo’s customers who are individuals are dual-eligible, meaning their coverage comes from both Medicare and Medicaid. As a result, a small portion of DocGo’s revenue comes from Medicaid, accounting for approximately 1.1% and 1.8% of revenue for the years ended December 31, 2021 and 2022, respectively.
Certain of DocGo’s customers who are individuals are dual-eligible, meaning their coverage comes from both Medicare and Medicaid. As a result, a small portion of DocGo’s revenue comes from Medicaid, accounting for approximately 1.4%, 1.8% and 1.1% of revenue for the years ended December 31, 2023, 2022 and 2021, respectively.
If DocGo’s enterprise software does not currently support a client’s required data format or appropriate integrate with a client’s applications and information systems, then DocGo must configure its enterprise software to do so, which increases DocGo’s expenses. Additionally, DocGo does not control its clients’ implementation schedules.
If DocGo’s enterprise software does not currently support a client’s required data format or appropriately integrate with a client’s applications and information systems, then DocGo must configure its enterprise software to do so, which increases DocGo’s expenses. Additionally, DocGo does not control its clients’ implementation schedules.
Companies in the internet and technology industries are increasingly bringing and becoming subject to suits alleging infringement of proprietary rights, particularly patent rights, and our competitors and other third parties may hold or have pending patent applications, which could be related to our business.
Companies in the internet and technology industries are increasingly bringing and becoming subject to suits alleging infringement of proprietary rights, particularly patent rights, and DocGo’s competitors and other third parties may hold or have pending patent applications, which could be related to DocGo’s business.
While DocGo has implemented data privacy and security measures in an effort to comply with applicable laws and regulations relating to privacy and data protection, some PHI and other PII or confidential information is transmitted to or from DocGo by third parties, who may not implement adequate security and privacy measures, and it is possible that laws, rules and regulations relating to privacy, data protection or information security may be interpreted and applied in a manner that is inconsistent with DocGo’s practices or those of third parties who transmit PHI and other PII or confidential information to DocGo.
While DocGo has implemented data privacy and security measures in an effort to comply with applicable laws and regulations relating to privacy and data protection, some PHI and other PII or confidential information is transmitted to or from DocGo by third parties, who may not implement adequate security and privacy measures, and it is possible that laws, rules and regulations relating to privacy, data protection or information security may be interpreted and applied in a manner that is inconsistent with DocGo’s practices or those of third parties who transmit PHI and other PII or confidential 35 Table of Contents information to DocGo.
Additionally, DocGo’s strategy of providing healthcare transportation services with significant reliance on a mobile platform is novel, the telehealth industry is nascent and still evolving and there are no well-established companies offering the “last-mile” telehealth solutions that DocGo offers, all of which carry its own unique risks, including market and consumer acceptance and adoption.
Additionally, DocGo’s strategy of providing healthcare transportation services with significant reliance on a mobile platform is novel, the mobile health and telehealth industry is nascent and still evolving, and there are no well-established companies offering the “last-mile” mobile health solutions that DocGo offers, all of which carry their own unique risks, including market and consumer acceptance and adoption.
DocGo’s proprietary software may not operate properly, which could damage DocGo’s reputation, give rise to claims against DocGo or divert application of DocGo’s resources from other purpose, any of which could harm DocGo’s business, financial condition and results of operations.
DocGo’s proprietary software may not operate properly, which could damage DocGo’s reputation, give rise to claims against DocGo or divert application of DocGo’s resources from other purposes, any of which could harm DocGo’s business, financial condition and results of operations.
In recent years, DocGo has entered into strategic business relationships with, among others, healthcare providers and hospital systems, to take advantage of commercial opportunities across its operations, but particularly in its medical transportation services segment.
In recent years, DocGo has entered into strategic business relationships with, among others, healthcare providers and hospital systems to take advantage of commercial opportunities across its operations, particularly in its Transportation Services segment.
As a public company, DocGo has significant requirements for enhanced financial reporting and internal controls, including the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in its quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting.
As a public company, DocGo has significant requirements for enhanced financial reporting and internal controls, including the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act’), which require management to certify financial and other information in its quarterly and annual reports and provide an annual management report on the effectiveness of internal control over financial reporting.
The Board may take into account general and economic conditions, DocGo’s financial condition and results of operations, DocGo’s available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by DocGo to its stockholders or by its subsidiaries to it and such other factors as the Board may deem relevant.
The Board may take into account general and economic conditions, DocGo’s financial condition and results of operations, DocGo’s available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax, and regulatory restrictions, implications on the payment of dividends by DocGo to its stockholders or by its subsidiaries to it and such other factors as the Board may deem 42 Table of Contents relevant.
Alternatively, if a court were to find these provisions of the certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, DocGo may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect DocGo’s business and financial condition.
Alternatively, if a court were to find these provisions of DocGo’s certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, 44 Table of Contents DocGo may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect DocGo’s business and financial condition.
Among other things, proposed changes would raise the rate on both domestic and foreign income. If any of these proposals are ultimately enacted into legislation, they could materially impact DocGo’s tax provision, cash tax liability and effective tax rate. Changes in accounting rules, assumptions or judgments could materially and adversely affect DocGo.
Among other things, proposed changes would raise the rate on both domestic and foreign income. If any of these proposals are ultimately enacted into legislation, they could materially impact DocGo’s tax provision, cash tax liability and effective tax rate. 31 Table of Contents Changes in accounting rules, assumptions or judgments could materially and adversely affect DocGo.
Security breaches, loss of data and other disruptions could compromise sensitive business, customer or patient information or prevent DocGo from accessing critical information and expose it to liability, which could adversely affect DocGo’s business.
Security breaches, loss of data and other disruptions or cybersecurity incidents could compromise sensitive business, customer or patient information or prevent DocGo from accessing critical information and expose it to liability, which could adversely affect DocGo’s business.
Moreover, a failure to maintain effective control processes could lead to violations, unintentional or otherwise, of laws and regulations and may put our employees and others in close proximity to potentially harmful environments or situations.
Moreover, a failure to maintain effective control processes could lead to violations, unintentional or otherwise, of laws and regulations and may put DocGo’s employees and others in close proximity to potentially harmful environments or situations.
DocGo is subject to a variety of federal, state and local laws and regulatory regimes, including a variety of labor laws and regulations, and changes to or the failure to comply with these laws and regulations could adversely affect DocGo’s business.
DocGo is subject to a variety of federal, state and local laws and regulatory regimes, including a variety of labor laws and regulations and SEC rules and regulations, and changes to or the failure to comply with these laws and regulations could adversely affect DocGo’s business.
Risks Relating to Ownership of Common Stock Nasdaq may delist DocGo’s securities from trading on its exchange, which could limit investors’ ability to make transactions in its securities and subject DocGo to additional trading restrictions.
Risks Related to Ownership of Common Stock Nasdaq may delist DocGo’s securities from trading on its exchange, which could limit investors’ ability to make transactions in its securities and subject DocGo to additional trading restrictions.
In addition, in the event of a default, the Agent could seek foreclosure of the Agent’s lien on the assets of DocGo and its subsidiary guarantors and exercise other customary secured creditor rights, and DocGo could be forced into bankruptcy or liquidation. Any future debt arrangements that DocGo may enter into could also impose similar restrictions.
In addition, in the event of a default, the Agent could seek foreclosure of the Agent’s lien on the assets of DocGo and its subsidiary 41 Table of Contents guarantors and exercise other customary secured creditor rights, and DocGo could be forced into bankruptcy or liquidation. Any future debt arrangements that DocGo may enter into could also impose similar restrictions.
Certain proposed acquisitions or dispositions may also trigger regulatory review by governmental agencies, including the U.S. Department of Justice (the “DOJ”) and the U.S. Federal Trade Commission (the “FTC”), under their respective regulatory authority.
Certain proposed acquisitions or dispositions may also trigger regulatory review by governmental agencies, including the U.S. Department of Justice and the U.S. Federal Trade Commission, under their respective regulatory authority.
There can be no assurances that DocGo will successfully retain its existing contracts and any loss of contracts or reduction in services provided thereunder or under any renewal could have a material adverse effect on DocGo’s business, financial condition and results of operations. DocGo’s reliance on government contracts could adversely affect its business.
There can be no assurances that DocGo will successfully retain its existing contracts and any loss of contracts or reduction in services provided thereunder or under any renewal could have a material adverse effect on DocGo’s business, financial condition and results of operations. 15 Table of Contents DocGo’s reliance on government contracts could adversely affect its business.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties. Facilities Our principal executive offices are located in New York City, where we occupy approximately 6,000 square feet under a lease that expires in 2026. We use this facility for administration, sales and marketing, and general corporate activities.
Item 2. Properties. Facilities Our principal executive offices are located in New York City, where we occupy approximately 27,000 square feet under a lease that expires in 2026. We use this facility for administration, sales and marketing and general corporate activities for our Corporate segment.
The average age of our existing active ambulance fleet is approximately four years. We generally prefer to lease vehicles, but we have purchased vehicles in the past when deemed appropriate. Most of our owned vehicles were acquired in connection with business acquisitions.
The average age of our 47 Table of Contents existing active ambulance fleet is approximately four years. We generally prefer to lease vehicles, but we have purchased vehicles in the past when deemed appropriate. Most of our owned vehicles were acquired in connection with business acquisitions.
In addition to our headquarters, to support our local operations, as of December 31, 2022, we owned or leased 30 office locations elsewhere in the United States (seven in New York, six in Wisconsin, four in New Jersey, three in Texas, two each in California, Colorado and Delaware, one each in Alabama, New Mexico, Pennsylvania and Tennessee.
In addition to our headquarters, to support our local operations, as of December 31, 2023, we owned or leased 45 office locations elsewhere in the United States (twelve in New York; seven in Wisconsin; six in New Jersey; three in each of Delaware, Michigan and Pennsylvania; two in each of Colorado and Texas; and one in each of Alabama, Arizona, California, Connecticut, New Mexico, South Carolina and Tennessee).
We believe our existing facilities are adequate to meet our current requirements, and we anticipate that suitable space will be readily available if needed. We intend to procure additional, similar facilities as we expand geographically.
Our leases for our U.S. facilities expire at various dates through 2029, and our leases for our U.K. facilities expire at various dates through 2032. We believe our existing facilities are adequate to meet our current requirements, and we anticipate that suitable space will be readily available if needed. We intend to procure additional, similar facilities as we expand geographically.
Vehicle Fleet As of December 31, 2022, we operated 643 vehicles in the United States, including 384 ambulances, 88 wheelchair vans and 171 basic transportation or support vehicles. Approximately 47% of our fleet is leased and 53% is owned. We replace ambulances based upon age and usage, generally every eight to ten years.
Vehicle Fleet As of December 31, 2023, we operated 580 vehicles in the United States, including 350 ambulances, 54 wheelchair vans and 176 basic transportation or support vehicles. Approximately 44% of our fleet is leased and 56% is owned. We replace ambulances based upon age and usage, generally every five to eight years.
These local facilities are used principally for ambulance basing, garaging and maintenance, as well as for administrative activities and general oversight. Outside of the United States, we currently lease seven facilities in England. These facilities are used for administrative functions and ambulance basing. Our leases for our local facilities expire at various dates through 2029.
These local facilities are used principally for ambulance basing, garaging and maintenance, as well as for administrative activities and general oversight for our Mobile Health Services and Transportation Services segments. Outside of the United States, we currently lease fourteen facilities in England. These facilities are used for administrative functions and ambulance basing for our Transportation Services segment.
As of December 31, 2022, we operated another 395 vehicles in the United Kingdom, including 18 First Response Ambulances, 11 Mental Health Transport vehicles, 52 High Dependency Units, 288 Patient Transport vehicles and 26 support vehicles. Approximately 67% of our fleet is owned and 33% is leased.
As of December 31, 2023, we operated another 294 vehicles in the United Kingdom, including 22 first response ambulances, 11 mental health transport vehicles, 27 high dependency units, 200 patient transport vehicles and 34 support vehicles. Approximately 75% of our U.K. fleet is owned and 25% is leased.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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From time to time, in the ordinary course of our business, we, like others in our industry, receive requests for information from government agencies in connection with their regulatory or investigational authority. These requests can include subpoenas or demand letters for documents to assist the government in audits or investigations.
In addition, from time to time, in the ordinary course of our business and like others in our industry, we receive requests for information from government agencies in connection with their regulatory or investigational authority. These requests can include subpoenas or demand letters for documents to assist the government in audits or investigations.
We review such requests and notices and take what we believe to be appropriate action. We have been subject to certain requests for information and investigations in the past and could be subject to such requests for information and investigations in the future. Item 4. Mine Safety Disclosures. Not applicable. 48 PART II
We review such requests and notices and take what we believe to be appropriate action. We have been subject to certain requests for information and investigations in the past and could be subject to such requests for information and investigations in the future. Item 4. Mine Safety Disclosures. Not applicable. 48 Table of Contents PART II
Item 3. Legal Proceedings. We are subject to legal proceedings, claims and litigation arising in the ordinary course of our business. The information set forth in Note 20 of the Notes to the Consolidated Financial Statements is incorporated herein by reference.
Item 3. Legal Proceedings. We are subject to legal proceedings, claims and litigation arising in the ordinary course of our business. Descriptions of certain legal proceedings to which we are a party are set forth in Note 20 to the Consolidated Financial Statements and are incorporated herein by reference.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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We have not declared or paid any cash dividends on our Common Stock to date, and we do not currently intend to pay cash dividends in the foreseeable future. The payment of cash dividends in the future will depend on a number of factors, including our future revenues and earnings, if any, capital requirements and general financial condition.
Dividend Policy We have not declared or paid any cash dividends on our Common Stock to date, and we do not currently intend to pay cash dividends in the foreseeable future. The payment of cash dividends in the future will depend on a number of factors, including our future revenues and earnings, if any, capital requirements and general financial condition.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our Common Stock is currently traded on The Nasdaq Capital Market under the trading symbol “DCGO.” As of March 14, 2023, there were 103 holders of record of our Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information Our Common Stock is currently traded on Nasdaq under the trading symbol “DCGO.” Holders of Record As of February 26, 2024, there were 64 holders of record of our Common Stock.
Repurchases of Equity Securities On May 24, 2022, our Board approved a share repurchase program to purchase up to $40 million of our Common Stock (the “Program”). The Program does not obligate us to acquire any specific number of shares and will expire on November 24, 2023, and the Program may be suspended, extended, modified or discontinued at any time.
The Repurchase Program does not obligate DocGo to acquire any specific number of shares and will expire on July 30, 2024, and the Repurchase Program may be suspended, extended, modified or discontinued at any time.
The timing, manner, price and amount of any common stock repurchases under the Program are determined by us in our discretion and depend on a variety of factors, including legal requirements, price and economic and market conditions. During the twelve months ended December 31, 2022, the Company repurchased 536,839 shares.
The timing, manner, price and amount of any common stock repurchases under the Repurchase Program are determined by DocGo in its discretion and depend on a variety of factors, including stock price, trading volume, market conditions, corporate and regulatory requirements and other general business considerations.
Removed
Under the Program, repurchases can be made using a variety of methods, which may include open market purchases, block trades, privately negotiated transactions and/or a non-discretionary trading plan, all in compliance with the rules of the SEC and other applicable legal requirements.
Added
Because many of our shares of Common Stock are held by brokers and other institutions on behalf of stockholders, we are unable to estimate the total number of stockholders represented by these record holders.
Removed
As of December 31, 2022, approximately $36.2 million remained available for share repurchases pursuant to the Program.
Added
Performance Graph This performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference to such filing.
Removed
Month Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs October 1 through 31, 2022 - $ - - $ 39,502,000 November 1 through 30, 2022 193,927 6.88 193,927 $ 38,168,568 December 1 through 31, 2022 272,912 7.10 272,912 $ 36,231,296 466,839 $ 6.98 466,839 $ 36,231,296 Item 6.
Added
The following performance graph shows the cumulative total return on our Common Stock as compared to the Russell 2000 Index, S&P 500 Index and S&P 500 Health Care Sector Index from November 8, 2021 (the day our Common Stock began trading as DocGo Inc. following the Business Combination) through December 29, 2023 (the last trading day at year end).
Added
The graph assumes an investment of $100 on November 8, 2021 and reinvestment of dividends, as applicable.
Added
The graph is based on historical data and is not intended to be a forecast or indication of future performance of our Common Stock. 49 Table of Contents Repurchases of Equity Securities There were no repurchases made during the year ended December 31, 2023.
Added
Subsequent to the end of fiscal 2023, on January 30, 2024, the Board approved a share repurchase program to purchase up to $36 million of the Common Stock (the “Repurchase Program”).
Added
Under the terms of the Repurchase Program, DocGo 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 DocGo does not possess material non-public information.
Added
Repurchases under the Repurchase Program may be funded from the Company’s existing cash and cash equivalents, future cash flow or proceeds of borrowings or debt offerings. Item 6. Reserved

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

104 edited+64 added−33 removed38 unchanged
Compared to the prior year, 2022 featured significantly lower COVID-19 testing revenue, which was outweighed by the substantial increase in other Mobile Health services, as the Mobile Health segment transitioned away from its dependence on COVID-19 related revenue.
Compared to the prior year, 2022 featured significantly lower COVID-19 testing revenue, which was outweighed by the substantial increase in other Mobile Health Services, as the Mobile Health Services segment transitioned away from its dependence on COVID-19 related revenue.
Increased volumes and higher average trip prices, as described above, combined with lower average hourly wages, as recent market wage pressures began to subside, and as the Company more effectively managed its staff to reduce overtime hours for field employees, to offset the effects of increased fuel costs.
Increased volumes and higher average trip prices, as described above, combined with lower average hourly wages, as recent market wage pressures began to subside and the Company more effectively managed its staff to reduce overtime hours for field employees, to offset the effects of increased fuel costs.
Operating expenses as a percentage of revenues decreased to 17.8% from 19.8% in 2021, due to the increase in Mobile Health revenues, which outweighed the effect of the significant expenditures that were made in 2022 in the expansion of services and geographic areas of operation, as well as the continued buildout of the Mobile Health management infrastructure and the costs of developing the Company’s “on-demand” direct-to-consumer offering.
Operating expenses as a percentage of revenues decreased to 17.8% from 19.8% in 2021, due to the increase in Mobile Health Services revenues, which outweighed the effect of the significant expenditures that were made in 2022 in the expansion of services and geographic areas of operation, as well as the continued buildout of the Mobile Health Services management infrastructure and the costs of developing the Company’s “on-demand” direct-to-consumer offering.
Borrowings under the revolving facility bear interest at a per annum rate equal to (i) at the Company’s option, the (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin. The applicable margins are based on the Company’s consolidated net leverage ratio, adjusted on a quarterly basis.
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.
Investing activities During the year ended December 31, 2022, cash used in investing activities was $38.4 million and consisted of the acquisition of property and equipment totaling approximately $3.2 million, the acquisition of intangibles in the amount of $2.3 million and $33.0 million in the acquisition of businesses, primarily relating to acquisitions the Company completed in the third and fourth quarters of 2022.
During the year ended December 31, 2022, cash used in investing activities was $38.4 million and consisted of the acquisition of property and equipment totaling approximately $3.2 million, the acquisition of intangibles in the amount of $2.3 million and the acquisition of businesses in the amount of $33.0 million, primarily relating to acquisitions the Company completed in the third and fourth quarters of 2022.
During the year ended December 31, 2021, cash used in investing activities was $8.6 million, primarily consisting of the acquisition of property and equipment totaling $4.8 million and the acquisition of businesses and intangibles of $3.1 million to support the ongoing growth of the business. In addition, the Company made an equity investment amounting to approximately $0.7 million.
During the year ended December 31, 2021, cash used in investing activities was $8.6 million, primarily consisting of the acquisition of property and equipment totaling $4.8 million and the acquisition of businesses and intangibles totaling $3.1 million to support the ongoing growth of the business. In addition, the Company made an equity investment amounting to approximately $0.7 million.
Financing activities During the year ended December 31, 2022, cash used in financing activities was $6.2 million, including $3.7 million in the repurchase of Common Stock, $3.0 million in payments under the terms of a finance lease, $2.5 million decrease in amounts due to seller and $0.9 million in repayments of notes payable, which were partially offset by $2.1 million in non-controlling interest contributions and $2.0 million in proceeds from the exercise of stock options.
During the year ended December 31, 2022, cash used in financing activities was $6.2 million, including $3.7 million in the repurchase of Common Stock, $3.0 million in payments under the terms of a finance lease, a $2.5 million decrease in amounts due to seller and $0.9 million in repayments of notes payable, which were partially offset by $2.1 million in non-controlling interest contributions and $2.0 million in proceeds from the exercise of stock options.
Changes in assets and liabilities resulted in an approximately $28.8 million decrease in operating cash flow and were primarily driven by a $57.1 million increase in accounts receivable arising from the growth of the business, particularly in the fourth quarter of the year and the inclusion of larger Mobile Health customers with extended credit terms; and a $3.5 million increase in prepaid expenses and other current assets, partially offset by a $32.6 million increase in accounts payable and accrued expenses due primarily to the extension of credit and timing of payments, as DocGo attempted to align the timing of payments to vendors with the timing of payments received from customers, where possible, in an attempt to manage cash balances.
Changes in assets and liabilities resulted in an approximately $28.8 million decrease in operating cash flow and were primarily driven by a $57.1 million increase in accounts receivable arising from the growth of the business, particularly in the fourth quarter of the year, and the inclusion of larger Mobile Health Services customers with extended credit terms, and a $3.5 million increase in prepaid expenses and other current assets, partially offset by a $32.6 million increase in accounts payable and accrued expenses due primarily to the extension of credit and timing of payments, as DocGo attempted to align the timing of payments to vendors with the timing of payments received from customers, where possible, in an attempt to manage cash balances.
This was primarily attributable to a $64.9 million increase in total compensation, due to higher headcount for both the Transportation Services and Mobile Health segments; a $16.0 million increase in subcontracted labor, driven mostly by the Mobile Health segment, where the Company did not have sufficient personnel to staff the initial phases of large new projects; $13.6 million increase in vehicle costs, driven by a continued increase in the Company’s vehicle fleet and higher fuel and maintenance costs, as well as costs incurred to rent vehicles to provide Mobile Health services; a $2.1 million increase in travel costs, due to field personnel and other clinicians who traveled out of their home regions to provide Mobile Health services; a $0.4 million increase in facilities and related costs; and approximately $2.6 million in increases across a variety of other cost of revenue categories relating to the Company’s increased scale and geographic presence.
This was primarily attributable to a $64.9 million increase in total compensation, due to higher headcount for both the Transportation Services and Mobile Health Services segments; a $16.0 million increase in subcontracted labor, driven mostly by the Mobile Health Services segment, where the Company did not have sufficient personnel to staff the initial phases of large new projects; $13.6 million increase in vehicle costs, driven by a continued increase in the Company’s vehicle fleet and higher fuel and maintenance costs, as well as costs incurred to rent vehicles to provide Mobile Health Services; a $2.1 million increase in travel costs, due to field personnel and other clinicians who traveled out of their home regions to provide Mobile Health Services; a $0.4 million increase in facilities and related costs; and approximately $2.6 million in increases across a variety of other cost of revenues categories relating to the Company’s increased scale and geographic presence.
The increased inflation rate has had an impact on the Company’s expenses in several areas, including wages, fuel and medical and other supplies. This has had the impact of compressing gross profit margins, as the Company is generally unable to pass these higher costs on to its customers, particularly in the short term.
The increased inflation rate has had an impact on the Company’s expenses in several areas, including wages, fuel and medical and other supplies. This has had the effect of compressing gross profit margins, as the Company is generally unable to pass these higher costs on to its customers, particularly in the short term.
As a percentage of revenue, operating expenses increased slightly, from 29.6% in 2021 to 30.2% in 2022, despite the significant increase in overall revenues described above, as the Company continued to add to its management infrastructure and incurred a full year’s worth of expenses relating to its status as a public company.
As a percentage of revenues, operating expenses increased slightly, from 29.6% in 2021 to 30.2% in 2022, despite the significant increase in overall revenues described above, as the Company continued to add to its management infrastructure and incurred a full year’s worth of expenses relating to its status as a public company.
No such gain or loss was recorded during the same period in 2021. Gain/(Loss) from Remeasurement of Finance Leases During the year ended December 31, 2022, the Company recorded a gain from remeasurement of finance leases of approximately $1.4 million, resulting from a change in estimated remaining liabilities under the terms of its leases.
No such gain or loss was recorded during the same period in 2021. Gain on Remeasurement of Finance Leases During the year ended December 31, 2022, the Company recorded a gain on remeasurement of finance leases of approximately $1.4 million, resulting from a change in estimated remaining liabilities under the terms of its leases.
No such gain or loss was recorded in the same period in 2021. Gain from PPP Loan Forgiveness In 2021, the Company recorded a $0.1 million gain due to the forgiveness of a loan that one of its subsidiaries had obtained via the government’s Paycheck Protection Program (PPP) in 2020.
No such gain or loss was recorded in the same period in 2021. Gain from PPP Loan Forgiveness In 2021, the Company recorded a $0.1 million gain due to the forgiveness of a loan that one of its subsidiaries had obtained via the government’s Paycheck Protection Program (“PPP”) in 2020.
On August 15, 2022, the Company announced the redemption of all of its outstanding warrants under the Warrant Agreement, dated as of October 14, 2020, by and between Motion and Continental Stock Transfer & Trust Company, as warrant agent, on the redemption date of September 16, 2022 (the “Redemption Date”).
On August 15, 2022, the Company announced the redemption of all of its outstanding warrants under the Warrant Agreement, dated as of October 14, 2020, by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, on the redemption date of September 16, 2022 (the “Redemption Date”).
For the Mobile Health segment, cost of revenues (exclusive of depreciation and amortization) in the year ended December 31, 2022 amounted to $199.2 million, compared to $145.2 million in the year ended December 31, 2021.
For the Mobile Health Services segment, cost of revenues (exclusive of depreciation and amortization) in the year ended December 31, 2022 amounted to $199.2 million, compared to $145.2 million in the year ended December 31, 2021.
This increase was due to a 20% increase in transportation trip volumes, from 180,753 trips for the year ended December 31, 2021 to 216,009 trips for the year ended December 31, 2022.
This increase was due to a 20% increase in trip volumes, from 180,753 trips for the year ended December 31, 2021 to 216,009 trips for the year ended December 31, 2022.
Trip Volumes and Average Trip Price A “trip” is defined as an instance where the Company completes the transport of a patient to a specific destination, for which we are able to charge a fee. This metric does not include instances where a trip is ordered and subsequently either canceled (by the customer) or declined (by the Company).
Trip Volumes and Average Trip Price A “trip” is defined as an instance where the Company completes the transportation of a patient to a specific destination, for which we are able to charge a fee. This metric does not include instances where a trip is ordered and subsequently either canceled (by the customer) or declined (by the Company).
Mobile Health For the year ended December 31, 2022, Mobile Health revenue was $325.9 million, an increase of $91.4 million, or 39%, as compared with the year ended December 31, 2021. This increase was primarily due to the expansion of the services offered by this segment, particularly with respect to testing, vaccination and other healthcare services revenues.
Mobile Health Services For the year ended December 31, 2022, Mobile Health Services revenues were $325.9 million, an increase of $91.4 million, or 39%, as compared with the year ended December 31, 2021. This increase was primarily due to the expansion of the services offered by this segment, particularly with respect to testing, vaccination and other healthcare services revenues.
The increase of $38.3 million related primarily to a $20.1 million increase in total compensation, which includes salaries, benefits, bonuses and commissions for both direct and subcontracted labor, reflecting higher headcount driven by the Company’s overall growth and expansion; a $7.1 million increase in legal, accounting and other professional fees related to increased revenue and related contract generation and SEC filing-related costs; a $2.8 million increase in insurance costs reflecting the growth and expansion of the Company, as well as the addition of directors and officers (D&O) insurance in 2022; a $3.2 million increase in depreciation and amortization charges due to an increase in assets to support revenue growth and capitalized software amortization, including from recently acquired companies; a $2.3 million increase in rent utility expenses, due to the Company’s ongoing growth and geographic expansion; a $2.9 million increase in IT infrastructure, driven by the Company’s business and headcount expansion; and a $0.6 million increase in marketing expenses, driven in part by expenditures made to develop and expand the Company’s direct-to-consumer (DTC) and other Mobile Health programs.
The increase of $38.3 million related primarily to a $20.1 million increase in total compensation, which includes salaries, benefits, bonuses and commissions for both direct and subcontracted labor, reflecting higher headcount driven by the Company’s overall growth and expansion; a $7.1 million increase in legal, accounting and other professional fees related to increased revenues and related contract generation and SEC filing-related costs; a $2.8 million increase in insurance costs reflecting the growth and expansion of the Company, as well as the addition of directors and officers (D&O) insurance in 2022; a $3.2 million increase in depreciation and amortization charges due to an increase in assets to support revenue growth and capitalized software amortization, including from recently acquired companies; a $2.3 million increase in rent utility expenses due to the Company’s ongoing growth and geographic expansion; a $2.9 million increase in IT infrastructure, driven by the Company’s business and headcount expansion; and a $0.6 million increase in marketing expenses, driven in part by expenditures made to develop and expand the Company’s direct-to-consumer offering and other Mobile Health Services.
Cost of Revenue For the year ended December 31, 2022, total cost of revenue (exclusive of depreciation and amortization) increased by 37%, as compared to the year ended December 31, 2021, while revenue increased by approximately 38%. Cost of revenue as a percentage of revenue decreased to 64.9% in 2022 from 65.5% in 2021.
Cost of Revenues For the year ended December 31, 2022, total cost of revenues (exclusive of depreciation and amortization) increased by 37%, as compared to the year ended December 31, 2021, while revenues increased by approximately 38%. Cost of revenues as a percentage of revenues decreased to 64.9% in 2022 from 65.5% in 2021.
Further, Ambulnz was determined to be the accounting acquirer in the transaction, as such, the acquisition is considered to be a business combination under Accounting Standards Codification (“ASC”), Topic 805, Business Combinations, (“ASC 805”) and was accounted for using the acquisition method of accounting.
Further, Ambulnz was determined to be the accounting acquirer in the transaction; as such, the acquisition is considered to be a business combination under Accounting Standards Codification (“ASC”) Topic 805, Business Combinations and was accounted for using the acquisition method of accounting.
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. 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.
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. 67 Table of Contents 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.
Warrants surrendered for exercise on a cashless basis resulted in the issuance of 1,406,371 shares. A total of 68,514 warrants were not surrendered on the Redemption Date and were redeemed for $0.10 per warrant.
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.
Cost of revenues as a percentage of revenues decreased slightly to 61.1% from 61.9%, due to the increase in revenues and the continued shift away from higher-cost subcontracted labor toward Company personnel during 2022, which was partially offset by higher compensation costs associated with some of the Company’s newer projects.
Cost of revenues as a percentage of revenues decreased slightly to 61.1% from 61.9%, due to the increase in revenues and 60 Table of Contents the continued shift away from higher-cost subcontracted labor toward Company personnel during 2022, which was partially offset by higher compensation costs associated with some of the Company’s newer projects.
Assets acquired and liabilities assumed, including NCI, 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.
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.
Net Loss Attributable to Noncontrolling Interest For the year ended December 31, 2022, the Company had a net loss attributable to noncontrolling interest of approximately $3.8 million compared to a net loss attributable to noncontrolling interest of $4.6 million for the year ended December 31, 2021.
Net Loss Attributable to Noncontrolling Interests For the year ended December 31, 2022, the Company had a net loss attributable to noncontrolling interests of approximately $3.8 million compared to a net loss attributable to noncontrolling interests of $4.6 million for the year ended December 31, 2021.
Changes in assets and liabilities resulted in an approximately $13.2 million decrease to operating cash flow, as an $8.4 million increase in accounts receivable, a $4.2 million increase in prepaid expenses and a $6.0 million decrease in accrued liabilities outweighed the effect of a $1.8 million decrease in other assets and a $3.6 million increase in accounts payable.
Changes in assets and liabilities resulted in an approximately $13.2 million decrease to operating cash flow, as an $8.4 million increase in accounts receivable, a $4.2 million increase in prepaid 64 Table of Contents expenses and a $6.0 million decrease in accrued liabilities outweighed the effect of a $1.8 million decrease in other assets and a $3.6 million increase in accounts payable.
Gain/(Loss) on Equity Method Investment During the year ended December 31, 2022, the Company recorded a gain on equity method investment of $8,919, representing its share of the losses incurred by an entity in which the Company has a minority interest, which is accounted for under the equity method.
Gain on Equity Method Investments During the year ended December 31, 2022, the Company recorded a gain on equity method investments of $8,919, representing its share of the losses incurred by an entity in which the Company has a minority interest, which is accounted for under the equity method.
The Company’s current business plan assumes an increased demand for Mobile Health services, a demand that was accelerated by the pandemic, but which we believe 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.
The Company’s current business plan assumes increased demand for Mobile Health Services, a demand that was accelerated by the pandemic, but which is also being driven by longer-term factors, such as the increasing desire on the part of patients to receive treatments outside of traditional settings, such as doctor’s offices and hospitals.
Sales, Advertising and Marketing Our sales and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include sales commissions, marketing programs, trade shows, and promotional materials.
Sales, Advertising and Marketing Expenses Our sales, advertising and marketing expenses consist of costs directly associated with our sales and marketing activities, which primarily include sales commissions, marketing programs, trade shows, promotional materials and general branding.
An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits—that is, it has (1) the power to direct the activities of a VIE that most significantly impacts the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits).
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 absolute dollar terms, cost of revenue in the year ended December 31, 2022 increased by $76.8 million from the levels of the year ended December 31, 2021.
In absolute dollar terms, cost of revenues in the year ended December 31, 2022 increased by $76.8 million from the levels of the year ended December 31, 2021.
The discussion and analysis below contain certain forward-looking statements about our business and operations that are subject to the risks, uncertainties, and other factors described in the section entitled “Risk Factors,” included in Part I, Item 1A, and other factors included elsewhere in this Annual Report on Form 10-K.
The discussion and analysis below contain certain forward-looking statements about our business and operations that are subject to the risks, uncertainties and other factors described in the section entitled “Risk Factors,” included in Part I, Item 1A, and other factors included elsewhere in this Annual Report.
For example, as the business has grown, the Company’s expenditures for human capital and supplies has expanded accordingly, and the timing of the payments for payroll and to associated vendors, compared to the timing of receipts of cash from customers, frequently results in the need to use existing cash balances to fund these working capital needs.
For example, as the business has grown, the Company’s expenditures for human capital and supplies has expanded accordingly, and the timing of the payments for payroll and to associated vendors, compared to the timing of receipts of cash from customers, frequently results in the need to use existing 62 Table of Contents cash balances to fund working capital needs.
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) ambulance and medical transportation services (“Transportation Services”) and (2) Mobile Health services.
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.
During the year ended December 31, 2021, cash provided by financing activities was $155.2 million, due primarily to $158.1 million in proceeds from the issuance of common stock in connection with the Motion merger, which is net of $20.0 million in issuance costs.
During the year ended December 31, 2021, cash provided by financing activities was $155.2 million, due primarily to $158.1 million in proceeds from the issuance of Common Stock in connection with the Business Combination, which is net of $20.0 million in issuance costs.
The tax benefit in 2022 was due to the release of the valuation allowance recorded in previous years for net operating losses (NOLs), as the Company determined that it was now more likely than not that it would be able to realize its NOL carryforwards in the future.
The tax benefit in 2022 was due to the release of the valuation allowance recorded in previous years for net operating losses, as the Company determined that it was more likely than not that it would be able to realize its net operating loss carryforwards in the future.
Depreciation and Amortization DocGo depreciates its assets using the straight-line method over the estimated useful lives of the respective assets. Amortization of intangibles consists of amortization of definite-lived intangible assets over their respective useful lives. Legal and Regulatory Expenses Legal and regulatory expenses include legal fees, consulting fees related to healthcare compliance, claims processing fees and legal settlements.
Depreciation and Amortization The Company depreciates its assets using the straight-line method over the estimated useful lives of the respective assets. Amortization of intangibles consists of amortization of definite-lived intangible assets over their respective useful lives. Legal and Regulatory Expenses Legal and regulatory expenses include legal fees, consulting fees related to healthcare compliance and legal settlements.
As trip volume represents the most basic unit of transportation service provided by the Company, it is the best measure of the level of demand for the Company’s Transportation services, and is used by management to monitor and manage the scale of the business.
As trip volume represents the most basic unit of transportation service provided by the Company, the Company believes it is a good measure of the level of demand for the Company’s Transportation Services and is used by management to monitor and manage the scale of the business.
The average trip price is calculated by dividing the aggregate revenue from completed transports (“trips”) by the total number of transports, and is an important indicator of the effective rate at which the Company is being compensated for its provision of Transportation services.
The average trip price is calculated by dividing the aggregate revenue from the total number of trips by the total number of trips and is an important indicator of the effective rate at which the Company is being compensated for its provision of Transportation Services.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated financial statements and the accompanying notes included elsewhere in this Annual Report on Form 10-K.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and the accompanying notes included elsewhere in this Annual Report.
We expect that our sales and marketing expenses will continue to increase over time as we increase our marketing activities, grow our domestic and international operations, and continue to build brand awareness.
We expect our sales, advertising and marketing expenses to continue to increase over time as we increase our marketing activities, grow our domestic and international operations and continue to build brand awareness.
Operating expenses as a percentage of revenues increased to 64.6% from 56.3% in the prior year period, despite the increase in revenues, primarily due to increases in the Company’s corporate overhead expenditures, as described above, as these expenses were allocated to the Transportation segment for purposes of segment reporting.
Operating expenses as a percentage of revenues increased to 64.6% from 56.3% in 2021, despite the increase in revenues, primarily due to increases in the Company’s corporate overhead expenditures, as described above, as these expenses were allocated to the Transportation Services segment for purposes of segment reporting.
The Assignee is responsible for liquidating the assets. Similar to a bankruptcy case, there is a claims process. Creditors of Health will receive notice of the ABC and a proof of claim form and are required to submit a proof of claim in order to participate in distribution of net liquidation proceeds by the Assignee.
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.
We anticipate that fuel prices will remain at elevated levels for 2023, but we expect that the full-year average for 2023 will be lower than it was in 2022. Operating expenses For the year ended December 31, 2022, operating expenses were $132.9 million compared to $94.4 million for the year ended December 31, 2021, an increase of 41%.
We anticipated that fuel prices would remain at elevated levels for 2023, but we expected that the full-year average for 2023 would be lower than it was in 2022. Operating Expenses For the year ended December 31, 2022, operating expenses were $132.9 million compared to $94.4 million for the year ended December 31, 2021, an increase of 41%.
Gain/(loss) on Remeasurement of Warrant Liabilities During the year ended December 31, 2022, the Company recorded a net gain of approximately $1.1 million from the remeasurement of warrant liabilities. The warrants are marked-to-market in each reporting period, and this gain reflected the decrease in DocGo’s stock price relative to the beginning of the period.
Gain on Remeasurement of Warrant Liabilities During the year ended December 31, 2022, the Company recorded a net gain of approximately $1.1 million from the remeasurement of warrant liabilities. The warrants were marked-to-market in each reporting period, and this gain 61 Table of Contents reflected the decrease in DocGo’s stock price relative to the beginning of the period.
Based on such filing for Health, the Company impaired the goodwill assigned to that reporting unit as of December 31, 2022 by approximately $5.1 million. 61 Revenue Recognition On January 1, 2019, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (“ASC 606”), as amended.
Based on such filing for Health, the Company impaired the goodwill assigned to that reporting unit as of December 31, 2022 by approximately $5.1 million. Revenue Recognition On January 1, 2019, the Company adopted ASC 606, Revenue from Contracts with Customers (“ASC 606”).
The revolving facility includes the ability for the Company to request an increase to the commitment by an additional amount of up to $50,000,000, though no Lender (nor the Lenders collectively) are obligated to increase their respective commitments.
The Revolving Facility includes the ability for the Company to request an increase to the commitment by an additional amount of up to $50 million, though no lender (nor the lenders collectively) is obligated to increase its respective commitments.
No gain from loan forgiveness was recorded during the year ended December 31, 2022. Income Tax Benefit (Expense) During the year ended December 31, 2022, the Company recorded an income tax benefit of $7.9 million compared to an income tax expense of $0.6 million in the year ended December 31, 2021.
No gain from loan forgiveness was recorded during the year ended December 31, 2022. Benefit From (Provision For) Income Taxes During the year ended December 31, 2022, the Company recorded a benefit from income taxes of $7.9 million compared to a provision for income taxes of $0.6 million in the year ended December 31, 2021.
We expect our general and administrative expense to increase as we scale up headcount with the growth of our business, and as a result of operating as a public company, including compliance with SEC rules and regulations, audit, additional insurance expenses, investor relations activities, and other administrative and professional services.
We expect our general and administrative expenses to increase as we continue to scale our business and grow headcount and as a result of operating as a public company, including our 53 Table of Contents compliance with SEC rules and regulations, audit activities, additional insurance expenses, investor relations activities and other administrative and professional services.
Cost of Revenues Cost of revenues consists primarily of revenue generating wages paid to employees, vehicle insurance costs (including insurance premiums and costs incurred under the insurance deductibles), maintenance, fuel, laboratory fees, facility rent, medical supplies and subcontractors. We expect cost of revenue to continue to rise in proportion to the expected increase in revenue.
Cost of Revenues Cost of revenues consists primarily of revenue generating wages paid to employees, fees to paid to subcontractors, medical supplies, vehicle insurance costs (including insurance premiums and costs incurred under the insurance deductibles), maintenance, fuel and facility rent. We expect cost of revenues to continue to rise as we grow our business.
Technology and development Expenses Technology and development expense, net of capitalization, consists primarily of costs incurred in the design and development of DocGo’s proprietary technology, third-party software and technologies.
Technology and Development Expenses Technology and development expenses consists primarily of costs incurred in the design and development of the Company’s proprietary technology, third-party software and technologies.
For both periods, the loss reflected ongoing investments in new markets that were entered into during 2021 and 2022, partially offset by income generated by those markets. 56 Liquidity and Capital Resources Since inception, DocGo has completed three equity financing transactions as its principal source of liquidity.
For both periods, the loss reflected ongoing investments in new markets that were entered into during 2021 and 2022, partially offset by income generated by those markets. Liquidity and Capital Resources Between the inception of DocGo’s wholly owned subsidiary Ambulnz and the Business Combination, Ambulnz completed three equity financing transactions as its principal source of liquidity.
As of December 31, 2022, working capital amounted to $170.9 million, which represented a decrease of $27.2 million compared to December 31, 2021, which reflected the decreased cash balance in 2022.
As of December 31, 2023, working capital amounted to $168.8 million, which represented a decrease of $2.2 million compared to December 31, 2022, which reflected the decreased cash balance in 2023.
If we fail to innovate and enhance our brand and our products, our market position and revenue will likely be adversely affected. Regulatory Environment DocGo is subject to federal, state and local regulations including healthcare and emergency medical services laws and regulations and tax laws and regulations.
If we fail to innovate and enhance our brand and our products, our market position and revenue may be adversely affected. 52 Table of Contents Regulatory Environment The Company is subject to federal, state and local regulations, including healthcare and emergency medical services laws and regulations and tax laws and regulations.
The Company evaluates the performance of both segments based primarily on results of its operations. Accordingly, other income and expenses not included in results from operations are only included in the discussion of consolidated results of operations. Revenue The Company’s revenue consists of services provided by its Transportation segment and its Mobile Health segment.
Accordingly, other income and expenses not included in results of operations are only included in the discussion of consolidated results of operations. Revenue The Company’s revenue consists of services provided by its Mobile Health Services segment and its Transportation Services segment.
Despite the fact that the Company generated positive net income in the year ended December 31, 2022, operating cash flows are not always sufficient to meet immediate obligations arising from current operations.
The Company has also funded these activities through operating cash flows. Despite the fact that the Company generated positive net income for the year ended December 31, 2023, operating cash flows are not always sufficient to meet immediate obligations arising from current operations.
In addition, in response to the need for widespread COVID-19 testing and available EMTs and paramedics, the Company expanded its operations to include Rapid Reliable Testing (“RRT”), with the goal of performing COVID-19 tests at nursing homes, municipal sites, businesses, schools and other venues. RRT is part of the Mobile Health business line.
In addition, in response to the need for widespread COVID-19 testing, EMTs and paramedics, the Company formed a new subsidiary, Rapid Reliable Testing, LLC (“RRT”), with the goal of performing COVID-19 tests at nursing homes, municipal sites, businesses, schools and other venues. RRT is part of the Mobile Health Services segment.
Some of these important factors are briefly discussed below. Future revenue growth and improvement in operating results will be largely contingent on DocGo’s ability to penetrate new markets and further penetrate existing markets, which is subject to a number of uncertainties, many of which are beyond DocGo’s control. The COVID-19 pandemic also significantly impacted DocGo’s business, as discussed above.
Some of these key factors are briefly discussed below. Future revenue growth and improvement in operating results will be largely contingent on our ability to penetrate new markets and further penetrate existing markets, which is subject to a number of uncertainties, many of which are beyond our control.
Cash Flows Year ended December 31, 2022 and 2021 As of December 31, Change Change $ in Millions 2022 2021 $ % Cash flow summary Net cash provided by/(used in) operating activities $ 28.9 $ (1.9 ) $ 30.8 1,621 % Net cash provided by/(used in) investing activities (38.4 ) $ (8.6 ) (29.8 ) (347 %) Net cash provided by/(used in) financing activities (6.2 ) $ 155.2 (161.4 ) (104 %) Effect of exchange rate changes 0.7 $ - 0.7 100 % Net (decrease) increase in cash $ (15.0 ) $ 144.7 $ (159.7 ) (110 %) 58 Operating activities During the year ended December 31, 2022, cash provided by operating activities was $28.9 million, aided by net income of $30.73 million.
Cash Flows Cash flows as of the years ended December 31, 2023 and 2022 were as follows: Year Ended December 31, Change $ Change % $ in Millions 2023 2022 Cash flow summary Net cash (used in) provided by operating activities $ (64.2) $ 28.9 $ (93.1) (322.1 %) Net cash used in investing activities (29.9) (38.4) 8.5 (22.1 %) Net cash provided by (used in) financing activities 1.1 (6.2) 7.3 (117.7 %) Effect of exchange rate changes 1.1 0.7 0.4 57.1 % Net decrease in cash $ (91.9) $ (15.0) $ (76.9) 512.7 % Cash flows as of the years ended December 31, 2022 and 2021 were as follows: Year Ended December 31, Change $ Change % $ in Millions 2022 2021 Cash flow summary Net cash provided by (used in) operating activities $ 28.9 $ (1.9) $ 30.8 1621.1 % Net cash used in investing activities (38.4) (8.6) (29.9) (347.7 %) Net cash (used in) provided by financing activities (6.2) 155.2 (161.4) (104.0 %) Effect of exchange rate changes 0.7 — 0.7 100.0 % Net (decrease) increase in cash $ (15.0) $ 144.7 $ (159.7) (110.4 %) Operating Activities During the year ended December 31, 2023, cash used by operating activities was $64.2 million, despite net income of $10.0 million.
In addition, in the Mobile Health segment, the Company experienced lost revenue associated with sporting, concerts and other events, as those events were cancelled or had a significantly restricted (or entirely eliminated) number of permitted attendees. Ambulance transports and event-related revenues have both since recovered to pre-COVID levels or higher.
In addition, the Company experienced lost revenues associated with sporting, concerts and other events, as those events were cancelled or significantly restricted (or entirely eliminated) the number of permitted attendees. Ambulance transports and event-related revenues have both since recovered to pre-COVID levels or higher. There were two areas in which the Company initially experienced positive business impacts from COVID-19.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. The Company recognizes any interest and penalties accrued related to unrecognized tax benefits as income tax expense.
The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances.
We expect technology and development expense to increase in future periods to support our growth, including as we invest in the optimization, accuracy and reliability of our platform to help drive efficiency in our operations.
We expect technology and development expenses to increase in future periods to support our growth, including our intent to continue investing in the optimization, accuracy and reliability of our dispatch and communication platform and drive efficiency in our operations.
Unfavorable changes in demographics, health care coverage of transportation and mobile health services, interest rates, ambulance manufacturing, a weakening of the national economy or of any regional or local economy in which we operate and other factors beyond our control could adversely affect our business.
Unfavorable changes in demographics, healthcare coverage of Mobile Health Services and Transportation Services, interest rates, inflation rates, ambulance manufacturing, a weakening of the national economy or of any regional or local economy in which we operate and other factors beyond our control could adversely affect our business. 51 Table of Contents Our Ability to Control Expenses We pay close attention to the management of our working capital and operating expenses.
This was slightly offset by $2.2 million in payments on obligations under the terms of a finance lease, and $0.5 million in expenditures to acquire the remaining 20% of the Company’s U.K. subsidiary. During 2021, the Company received $8.0 million in proceeds from a revolving bank loan, which was repaid during the fourth quarter of 2021.
This was slightly offset by $2.2 million in payments on obligations under the terms of a finance lease and $0.5 million in expenditures to acquire the remaining 20% of the Company’s U.K. subsidiary.
Increased accounts receivable, which reflected the growth of the business and a shift towards higher credit quality customers, who have longer payment terms, in 2022, were outweighed by the increase in current liabilities, which reflected the growth of the business and amounts due to seller resulting from acquisitions.
Increased accounts receivable, which reflected the growth of the business and a shift towards higher credit quality customers who have longer payment cycles in 2023, were outweighed by the increase in current liabilities, which reflected the growth of 63 Table of Contents the business and amounts due to seller and contingent consideration resulting from acquisitions, as well as the draw down of $25 million under the terms of the Revolving Credit Facility.
Future minimum annual maturities of notes payable as of December 31, 2022 are as follows: Amounts in millions Notes Payable 2023 0.6 2024 0.5 2025 0.4 2026 0.3 Thereafter 0.1 Total maturities $ 1.9 Current portion of notes payable (0.7 ) Long-term portion of notes payable $ 1.2 59 Future minimum lease payments under finance leases as of the year ended December 31, 2022: Amounts in millions Finance Leases 2023 $ 3.2 2024 2.4 2025 2.2 2026 1.4 2027 and thereafter 0.4 Total future minimum lease payments 9.6 Less effects of discounting (1.0 ) Present value of future minimum lease payments $ 8.6 Future minimum lease payments under operating leases as of the year ended December 31, 2022: Amounts in millions Operating Leases 2023 $ 2.8 2024 2.3 2025 2.3 2026 1.7 2027 and thereafter 1.6 Total future minimum lease payments 10.7 Less effects of discounting (1.3 ) Present value of future minimum lease payments $ 9.4 Critical Accounting Policies Basis of Presentation The Company’s Consolidated Financial Statements are presented in conformity with accounting principles generally accepted in the U.S.
During 2021, the Company received $8.0 million in proceeds from a revolving bank loan, which was repaid during the fourth quarter of 2021. 65 Table of Contents Future minimum annual maturities of notes payable as of December 31, 2023 are as follows (in thousands): Notes Payable 2024 $ 28.8 2025 25.8 2026 15.1 Total maturities 69.7 Current portion of notes payable (28.1) Long-term portion of notes payable $ 41.6 Future minimum lease payments under finance leases as of the year ended December 31, 2023 are as follows (in millions): Finance Leases 2024 $ 4.1 2025 3.7 2026 2.9 2027 1.5 2028 0.3 Thereafter — Total future minimum lease payments 12.5 Less effects of discounting (1.1) Present value of future minimum lease payments $ 11.4 Future minimum lease payments under operating leases as of the year ended December 31, 2023 are as follows (in millions): Operating Leases 2024 $ 3.3 2025 3.3 2026 2.4 2027 1.2 2028 0.6 Thereafter 0.3 Total future minimum lease payments 11.1 Less effects of discounting (1.1) Present value of future minimum lease payments $ 10.0 Critical Accounting Policies Basis of Presentation The Company’s Consolidated Financial Statements are presented in conformity with accounting principles generally accepted in the U.S.
Our Ability to Control Expenses We pay close attention to managing our working capital and operating expenses. Some of our most significant operating expenses are labor costs, medical supplies and vehicle-related costs, such as fuel, maintenance, repair and insurance. Insurance costs include premiums paid for coverage as well as reserves for estimated losses within the Company’s insurance policy deductibles.
Some of our most significant operating expenses are labor costs, medical supplies and vehicle-related costs, such as fuel, maintenance, repair and insurance. Insurance costs include premiums paid for coverage as well as reserves for estimated losses within the Company’s insurance policy deductibles. We employ our proprietary technology to help drive improvements in productivity per transport and per shift.
Interest Expense Interest expense consists primarily of interest on our outstanding borrowings under our outstanding notes payable, credit line and financing obligations. 53 Results of Operations Comparison of Fiscal 2022 with Fiscal 2021 Years Ended December 31, Change Change $ in Millions 2022 2021 $ % Revenue, net $ 440.5 $ 318.7 $ 121.8 38 % Cost of revenues 285.8 209.0 76.8 37 % Operating expenses: General and administrative 103.4 74.9 28.5 38 % Depreciation and amortization 10.6 7.5 3.1 41 % Legal and regulatory 8.8 3.9 4.9 126 % Technology and development 5.4 3.3 2.1 64 % Sales, advertising and marketing 4.7 4.8 (0.1 ) (2 )% Total expenses 418.7 303.4 115.3 38 % Income (loss) from operations 21.8 15.4 6.5 Other income (expenses): Interest income (expense), net 0.8 (0.8 ) 1.6 200 % Gain (loss) from Payroll Protection Program (“PPP”) loan forgiveness - 0.1 (0.1 ) Gain on remeasurement of warrant liabilities 1.1 5.2 (4.1 ) Gain (loss) on equity method investment - (0.1 ) 0.1 Gain on remeasurement of finance leases 1.4 - 1.4 Loss on disposal of fixed assets - - - Gain on bargain purchase 1.6 - 1.6 Other income (loss) (3.9 ) - (3.9 ) Total other income (expense) 1.0 4.4 (3.4 ) (77 )% Net income (loss) before income tax benefit (expense) 22.8 19.8 3.3 Benefit (provision) for income tax 7.9 (0.6 ) 8.5 Net income (loss) 30.7 19.2 11.5 60 % Net loss attributable to noncontrolling interests (3.9 ) (4.5 ) 0.6 13 % and Subsidiaries $ 34.6 $ 23.7 10.9 Consolidated For the year ended December 31, 2022, total revenues were $440.5 million, an increase of $121.8 million, or 38%, from the total revenues recorded in the year ended December 31, 2021.
The income compared to the prior year period loss reflected improved performance in the Company’s joint venture markets in the year ended December 31, 2023. 58 Table of Contents Comparison of Fiscal 2022 with Fiscal 2021 Year Ended December 31, Change $ Change % $ in Millions 2022 2021 Actual Results % of Total Revenue Actual Results % of Total Revenue Revenues, net $ 440.5 100.0 % $ 318.7 100.0 % $ 121.8 38.2 % Cost of revenues 285.8 64.9 % 209.0 65.6 % $ 76.8 36.8 % Operating expenses: General and administrative 103.4 23.5 % 74.9 23.5 % $ 28.5 38.1 % Depreciation and amortization 10.6 2.4 % 7.5 2.4 % $ 3.1 40.7 % Legal and regulatory 8.8 2.0 % 3.9 1.2 % $ 4.9 125.6 % Technology and development 5.4 1.2 % 3.3 1.0 % $ 2.1 63.6 % Sales, advertising and marketing 4.7 1.1 % 4.8 1.5 % $ (0.1) (2.4 %) Total expenses 418.7 95.1 % 303.4 95.2 % $ 115.3 38.0 % Income from operations 21.8 4.9 % 15.4 4.8 % $ 6.5 Other income: Interest income (expense), net 0.8 0.2 % (0.8) (0.2) % $ 1.6 200.0 % Gain on remeasurement of warrant liabilities 1.1 0.3 % 5.2 1.6 % $ (4.1) Change in fair value of contingent liability — — % — — % $ — (Loss) on equity method investments — — % (0.1) — % $ 0.1 Gain on remeasurement of finance leases 1.4 0.3 % — — % $ 1.4 Gain on bargain purchase 1.6 0.4 % — — % $ 1.6 Gain from PPP loan forgiveness — — % 0.1 — % $ (0.1) (Loss) on disposal of fixed assets — — % — — % $ — Goodwill impairment (2.9) (0.7) % — — % $ (2.9) Other expense (1.0) (0.2) % — — % $ (1.0) Total other income 1.0 0.2 % 4.4 1.4 % $ (3.4) (77.3 %) Net income before benefit from (provision for) income tax 22.8 5.2 % 19.8 6.2 % $ 3.0 Benefit from (provision for) income tax 7.9 1.8 % (0.6) (0.2) % $ 8.5 Net income 30.7 7.0 % 19.2 6.0 % $ 11.5 Net (loss) attributable to noncontrolling interests (3.9) (0.9) % (4.5) (1.4) % $ 0.6 13.3 % Net income attributable to stockholders of DocGo Inc. and Subsidiaries $ 34.6 7.9 % $ 23.7 7.4 % $ 10.9 59 Table of Contents Revenues Consolidated For the year ended December 31, 2022, total revenues were $440.5 million, an increase of $121.8 million, or 38%, from the total revenues recorded in the year ended December 31, 2021.
Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of Ambulnz stock for the net assets of Motion, accompanied by a recapitalization. The net assets of Motion are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Ambulnz.
The net assets of the Company are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities and results of operations prior to the Reverse Recapitalization are those of Ambulnz.
The Company’s working capital needs depend on many factors, including the overall growth of the Company and the various payment terms that are negotiated with customers and vendors. Future capital requirements depend on many factors, including potential acquisitions, DocGo’s level of investment in technology and ongoing technology development, and rate of growth in existing markets and into new markets.
The Company’s future capital requirements depend on many factors, including potential acquisitions, the Company’s level of investment in technology and ongoing technology development, and rate of growth in existing markets and into new markets.
The initial applicable margins are 1.25% for an adjusted term SOFR loan and 0.25% for a base rate loan and will be updated based on the Company’s consolidated net leverage ratio. The revolving facility matures on November 1, 2027.
The 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 November 1, 2027 and is secured by a first-priority lien on substantially all of the Company’s present and future personal assets and intangible assets.
Future acquisitions may also include larger companies that may help drive revenue, profitability, cash flow and stockholder value, in both the Mobile Health and the Transportation segments. During the twelve months ended December 31, 2022, DocGo completed five acquisitions, for a purchase price of $69.1 million.
Future acquisitions may also include companies that may help drive revenue, profitability, cash flow and stockholder value. During the year ended December 31, 2023, we completed three acquisitions for an aggregate purchase price of $34.2 million. During the year ended December 31, 2022, we completed five acquisitions for a purchase price of $69.1 million.
These expenses may vary from period to period as a percentage of revenue, depending primarily upon when we choose to make more significant investments, which is in turn, dependent on numerous factors, including when we plan to enter into new business lines or customer sales channels.
These expenses may vary from period to period as a percentage of revenues, depending primarily upon when we choose to make more significant investments, particularly when entering new business lines or customer sales channels.
Revenues generated from programs under which DocGo is paid a fixed rate for the use of a fully staffed and equipped ambulance do not factor in the trip counts or average trip prices mentioned above. We anticipate that these fixed rate, “leased hour” programs will account for an increasing proportion of the Transportation segment’s revenues in the future.
Revenues generated from programs under which the Company is paid a fixed hourly or daily rate for the use of a fully staffed and equipped ambulance do not factor in the trip counts or average trip prices mentioned above.
COVID-19 testing continued to be a significant driver of Mobile Health revenues in the first half of 2022, but dropped sharply in the third quarter of the year, and represented an insignificant proportion of total revenues in the fourth quarter. 54 Transportation Services For the year ended December 31, 2022, Transportation Services revenue was $114.6 million an increase of $30.3 million, or 36%, as compared with the year ended December 31, 2021.
COVID-19 testing continued to be a significant driver of Mobile Health Services revenues in the first half of 2022, but dropped sharply in the third quarter of the year, and represented an insignificant proportion of total revenues in the fourth quarter.
In the Transportation segment, volumes are expected to continue to rise, reflecting an aging population in the U.S. and U.K., which tends to drive demand for the non-emergent medical transportation services provided by the Company. 50 Factors Affecting Our Results of Operations Our operating results and financial performance are influenced by a variety of factors, including, among others, our ability to obtain or maintain operating licenses; the success of our acquisition strategy; conditions in the healthcare transportation and mobile health services markets; our competitive environment; overall macroeconomic and geopolitical conditions, including rising interest rates, the inflationary environment, the potential recessionary environment, regional conflict and tensions; availability of healthcare professionals; changes in the cost of labor; and production schedules of our suppliers.
Factors Affecting Our Results of Operations Our operating results and financial performance are influenced by a variety of factors, including, among others, our ability to establish, maintain and grow customer relationships; our ability to execute projects to the satisfaction of our customers; conditions in the healthcare transportation and mobile health services markets; changes in government spending on healthcare and other social services; availability of healthcare professionals and other personnel; changes in the cost of labor; our competitive environment; overall macroeconomic and geopolitical conditions, including rising interest rates, the inflationary environment, the potential recessionary environment, regional conflict and tensions, financial institution instability and the prospect of a shutdown of the U.S. federal government; production schedules of our suppliers; our ability to obtain or maintain operating licenses; and the success of our acquisition strategy.
Operating expenses for the Transportation segment were also driven higher by the inclusion of the acquisitions the Company made in the second half of 2022. Interest Income (Expense), Net For the year ended December 31, 2022, the Company recorded $0.8 million of net interest income compared to $0.8 million of interest expense in the year ended December 31, 2021.
Interest Income (Expense), Net For the year ended December 31, 2022, the Company recorded $0.8 million of interest income, net compared to $0.8 million of interest expense, net in the year ended December 31, 2021.
Additionally, as the impact of the COVID-19 on the economy and on the Company’s market environment and operations evolves, the Company routinely assesses its liquidity needs. If the Company’s growth rate is higher than is currently anticipated, resulting in greater-than-anticipated capital requirements, the Company might need to, or choose to, raise additional capital through debt or equity financings.
If the Company’s growth rate is higher than is currently anticipated, resulting in greater-than-anticipated capital requirements, the Company might need to, or choose to, raise additional capital through debt or equity financings.
“Business” in this Annual Report on Form 10-K for additional information regarding DocGo’s business. For the year ended December 31, 2022 the Company recorded net income of $30.7 million, compared to net income of $19.2 million in the year ended December 31, 2021.
For the year ended December 31, 2023 the Company recorded net income of $10.0 million, compared to net income of $30.7 million and $19.2 million in the years ended December 31, 2022 and 2021, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. We are a smaller reporting company, as defined by Rule 12b-2 under the Securities and Exchange Act of 1934 and in Item 10(f)(1) of Regulation S-K, and are not required to provide the information under this item.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Market Risks We are exposed to certain market risks, including those relating to changes in interest rates and foreign currency exchange rates. We do not enter into instruments for trading or speculative purposes.
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Interest Rate Risk We are subject to interest rate risk relating to our cash equivalents and borrowings under our Revolving Facility, which bear interest at a per annum rate equal to (i) at our option, (x) the base rate or (y) the adjusted term SOFR rate, plus (ii) the applicable margin.
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The applicable margins are based on the Company’s consolidated net leverage ratio, adjusted on a quarterly basis. As of December 31, 2023, the Company had $25 million outstanding under the Revolving Facility. In February 2024, the Company repaid all amounts outstanding under the Revolving Facility, and no amounts are outstanding as of the date of this Annual Report.
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While the applicable interest rate is set for a specific term when amounts are drawn down under the terms of the Revolving Facility, any subsequent draws on the Revolving Facility may be subject to a higher or lower interest rate, depending upon, among other things, the then-prevailing SOFR rate.
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We have not utilized interest rate hedging or other strategies in an attempt to mitigate our interest rate risk.
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A hypothetical 10% change in interest rates during the year ended December 31, 2023 would have had a neutral net impact on our Consolidated Financial Statements, as changes in amounts paid for interest expense would have offset changes in interest income earned on cash balances.
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Foreign Exchange Risk We operate our business primarily within the United States and currently execute a majority of our transactions in U.S. dollars. However, we are exposed to limited foreign exchange risk as a result of our U.K. operations.
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The foreign exchange gain (loss) amounted to $4,022 to the Company for the year ended December 31, 2023, compared to $(20,423) and $(45,826) in the years ended December 31, 2022 and 2021, respectively. We have not utilized hedging or other strategies with respect to such foreign exchange exposure.
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This limited foreign currency translation risk is not expected to have a material impact on our Consolidated Financial Statements. A hypothetical 10% change in the applicable foreign exchange rate during the year ended December 31, 2023 would have resulted in a change in total revenues of approximately 0.7% and a change in total assets of approximately 0.9%.
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Concentrations of Risk Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash, cash equivalents, restricted cash and accounts receivable. Although we deposit our cash, cash equivalents and restricted cash with multiple financial institutions in the United States and in foreign countries, our deposits, at times, may exceed federally insured limits.
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We do not believe we are exposed to significant credit risk due to the financial strength of the depository institutions in which the funds are held.
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With respect to accounts receivable, for the year ended December 31, 2023, the Company had one customer that accounted for approximately 40% of revenues and 42% of net accounts receivable and another customer accounted for approximately 21% of revenues and 40% of net accounts receivable.
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For the year ended December 31, 2022, the Company had one customer that accounted for 35% of revenues and 45% of net accounts receivable.
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For the year ended December 31, 2021, the Company had one customer that accounted for approximately 23% of revenues and 26% of net accounts receivable and another customer that accounted for 26% of revenues and 24% of net accounts receivable. We perform ongoing evaluations of customers’ financial condition, creditworthiness and payment performance.
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Based on these evaluations, we consider whether or not the accounts receivable exposure to any specific customer is within an acceptable range for that customer.

Other DCGO 10-K year-over-year comparisons