Stock Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Stock Based Compensation

12. Stock Based Compensation

Stock Options

In 2021, the Company established the DocGo Inc. Equity Incentive Plan (the “Plan”), which replaced Ambulnz, Inc’s 2017 Equity Incentive Plan. The Company reserved 16,607,894 shares of common stock for issuance under the Plan. The Company’s stock options generally vest on various terms based on continuous services over periods ranging from three to five years. The stock options are subject to time vesting requirements through 2032 and are nontransferable. Stock options granted have a maximum contractual term of 10 years. On September 30, 2022, approximately 2.5 million employee stock options on a converted basis had vested.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Before the Company’s shares of stock were publicly traded, management took the average of several publicly traded companies that were representative of the Company’s size and industry in order to estimate its expected stock volatility. The expected term of the options represented the period of time the instruments are expected to be outstanding. The Company based the risk-free interest rate on the rate payable on the U.S. Treasury securities corresponding to the expected term of the awards at the date of grant. Expected dividend yield was zero based on the fact that the Company had not historically paid and does not intend to pay a dividend in the foreseeable future.

The Company utilized contemporaneous valuations in determining the fair value of its shares at the date of option grants. Prior to the Merger, each valuation utilized both the discounted cash flow and guideline public company methodologies to estimate the fair value of its shares on a non-controlling and marketable basis. The December 31, 2020 valuations also included an approach that took into consideration a pending non-binding letter of intent from Motion Acquisition Corp. The March 11, 2021 valuation report relied solely on the fair value of the Company’s shares implied by the March 8, 2021 Merger Agreement with Motion Acquisition Corp.

A discount for lack of marketability was applied to the non-controlling and marketable fair value estimates determined above. The determination of an appropriate discount for lack of marketability was based on a review of discounts on the sale of restricted shares of publicly traded companies and put-based quantitative methods. Factors that influenced the size of the discount for lack of marketability included (a) the estimated time it would take for a Company stockholder to achieve marketability, and (b) the volatility of the Company’s business.

The following assumptions were used to compute the fair value of the stock option grants during the period ended September 30, 2022 and 2021:

	Period Ended September 30, 2022
	2022			2021
Risk-free interest rate		.07% - 2.8	%		.15% - .62	%
Expected term (in years)		4			.5 - 2
Volatility		60% - 64	%		65	%
Dividend yield		0	%		0	%

The following table summarizes the Company’s stock option activity under the Plan for the period ended September 30, 2022:

	Options Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Balance as of, December 31, 2021		8,422,972		$	6.21		8.77	$	24,706,020
Granted/ Vested during the year		2,183,026			5.92		9.07		-
Exercised during the year		(1,637,159	)		2.04		5.47		-
Cancelled during the year		(706,642	)		7.71		8.82		-
Balance as of September 30, 2022		8,262,197			7.04		8.72	$	22,950,815
Options vested and exercisable at September 30, 2022		2,502,717		$	6.11		8.30	$	10,010,617

The aggregate intrinsic value in the above table is calculated as the difference between fair value of the Company’s common stock price and the exercise price of the stock options. The weighted average grant date fair value per share for stock option grants during the periods ended September 30, 2022 and December 31, 2021 was $5.92 and $2.80, respectively. On September 30, 2022 and December 31, 2021, the total unrecognized compensation related to unvested stock option awards granted was $27,812,078 and $20,792,804, respectively, which the Company expects to recognize over a weighted-average period of approximately 3.73 years.

Restricted Stock Units

The fair value of restricted stock units (“RSUs”) is determined on the date of grant. The Company records compensation expense in the Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income on a straight-line basis over the vesting period for RSUs. The vesting period for employees and members of the Board of Directors ranges from one to four years.

Activity under RSUs was as follows:

	RSUs			Weighted- Average Grant Date Fair Value Per RSU
Balance as of, December 31, 2021		50,192		$	9.97
Granted		146,853			7.15
Vested during the year		(16,645	)		9.97
Forfeited		-			-
Balance as of, September 30, 2022		180,400			7.67
Vested and unissued at September 30, 2022		-
Non-vested at September 30, 2022		180,400			7.67

The total grant-date fair value of RSUs granted during the period ended September 30, 2022 was $1,049,999.

For the period ended September 30, 2022, the Company recorded stock-based compensation expense related to RSUs of $177,840.

As of September 30, 2022, the Company had $1,241,163 in unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of approximately 3.1 years.