Stock Based Compensation

12 Months Ended

Dec. 31, 2022

Stock Based Compensation [Abstract]

Stock Based Compensation

14. Stock Based Compensation

Stock Options

In 2021, the Company established the DocGo Inc. Equity incentive Plan (the “Plan”) replacing Ambulnz, Inc’s 2017 Equity Incentive Plan. The Plan reserved 16,607,894 shares of Class A common stock for issuance under the Plan. The Company’s stock options generally vest on various terms based on continuous services up to five years. The stock options are subject to time vesting requirements through 2026 and are nontransferable. Stock options granted have a maximum contractual term of 10 years. On December 31, 2022, approximately 2.6 million employee options had vested.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. Management took the company specific volatility and 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 represents the period of time the instruments are expected to be outstanding. The Company bases 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 is zero based on the fact that the Company has not historically paid and does not intend to pay a dividend in the foreseeable future.

Prior to the merger, the Company utilized contemporaneous valuations in determining the fair value of its shares at the date of option grants. 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 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.

For certain stock options issued prior to the Merger, 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 include (a) the estimated time it would take for a Company stockholder to achieve marketability, and (b) the volatility of the Company’s business.

Subsequent to the Merger, the Company utilized publicly available pricing.

The following assumptions were used to compute the fair value of the sole stock option grant during the period ended December 31, 2022 and 2021:

	Years Ended December 31
	2022			2021
Risk-free interest rate		0.71% - 4.31	%		0.12% - 0.67	%
Expected term (in years)		6.25			1-5
Volatility		60% - 69	%		63% - 65	%
Dividend yield		0	%		0	%

The following table summarizes the Company’s stock option activity under the Plan for the period ended December 31, 2022:  

	Options Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life in Years		Aggregate Intrinsic Value
Balance as of December 31, 2020		4,635,898		$	1.84		7.28	$	8,129,671
Granted/ Vested during the year		5,495,095			2.88		9.80		-
Exercised during the year		(1,235,130	)		0.50		4.32		-
Cancelled during the year		(472,891	)		2.37		7.93		-
Balance as of December 31, 2021		8,422,972		$	6.21		8.77	$	24,706,020
Granted/ Vested during the year		5,443,368			7.04		-		-
Exercised during the year		(1,699,720	)		2.03		-		-
Cancelled during the year		(595,312	)		8.28		-		-
Balance as of December 31, 2022		11,571,308			7.11		9.05	$	39,389,063
Options vested and exercisable as of December 31, 2022		2,628,288		$	6.15		8.02	$	6,982,555

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 years ended December 31, 2022 and 2021 was $7.04 and $2.88, respectively. On December 31, 2022 and December 31, 2021, the total unrecognized compensation related to unvested stock option awards granted was $41,666,564 and $20,792,804, respectively, which the Company expects to recognize over a weighted-average period of approximately 2.16 years.

Restricted Stock Units

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

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		311,637			8.17
Vested during the year		(56,242	)		5.86
Balance as of December 31, 2022		305,587			8.35
Vested and unissued as of December 31, 2022		56,242			5.86
Non-vested as of December 31, 2022		305,587			8.35

The total grant-date fair value of RSUs granted during the period ended December 31, 2022 was $2,547,498.

In 2022, the company entered into agreements to issue $535,000 in aggregate RSUs in 2023. The number of shares to be issued in 2023 will be based on the stock prices at stated dates in these agreements.

For the year ended December 31, 2022, the Company recorded stock-based compensation expense related to RSUs of $870,579.

As of December 31, 2022, the Company had $2,177,713 in unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of approximately 1.7 years.