Financial Performance - The company reported net losses of $108.0 million and $54.0 million for the years ended December 31, 2023 and 2024, respectively, with an accumulated deficit of $354.7 million as of December 31, 2024[98]. - The company has not been profitable historically and may not achieve or maintain profitability in the future, with significant uncertainties affecting future operating results[98]. - The company intends to retain future earnings for business development and does not plan to pay cash dividends for the foreseeable future[224]. - The market price of the company's common stock has been highly volatile, influenced by various factors including financial performance and regulatory inquiries[219]. - Future sales of common stock by existing security holders could lead to a decline in the market price of the company's securities[225]. Internal Controls and Compliance - The company identified material weaknesses in internal control over financial reporting, leading to restatements of financial statements for the fiscal years ended December 31, 2022 and 2023[94]. - The company has restated its previously issued financial statements due to misstatements, which has exposed it to additional risks and uncertainties[92]. - The company is subject to ongoing legal proceedings and investigations related to its financial reporting and internal controls[93]. - The company is currently under investigation by the SEC regarding its sales practices, which may impact revenue recognition and other metrics[209]. - The company has received requests for documents from the SEC and the U.S. Attorney's Office related to the ongoing investigation and is cooperating with these inquiries[210]. Market and Competition - Increased competition may lead to pricing pressures, affecting sales prices and profitability[120]. - The competitive landscape in the physical security solutions market poses challenges for customer acquisition and retention, with competitors having greater resources[148]. - The evolving market for AI-based weapons detection may not grow as expected, with traditional security solutions still dominating enterprise budgets[139]. - Customer adoption and retention rates for AI-based products are difficult to predict, and any reduction in demand could adversely affect revenue and financial results[141]. Research and Development - The company expects to continue substantial investments in research and development and sales and marketing, including expanding its sales organization[99]. - Strategic investments in research and development, sales, and marketing are expected, but costs will be recognized earlier than the anticipated benefits[119]. - Significant investment in research and development is necessary to address evolving security risks, but this may also risk rendering existing products obsolete[154]. Legal and Regulatory Risks - The company faces potential legal liabilities from acquisitions, which could adversely impact its business and financial condition if acquired businesses do not meet expectations[127]. - Legal frameworks for AI governance are unsettled, and potential regulations could disrupt operations and impose additional costs on the company[144]. - Non-compliance with data privacy laws could lead to governmental enforcement actions, litigation, and reputational damage, adversely affecting business operations[196]. - The company faces potential liabilities from third-party actions related to data privacy, which could necessitate changes in business practices[197]. Operational Challenges - The company may face increased costs and operational challenges due to reliance on third-party technology and components[91]. - Supply chain disruptions and reliance on third-party manufacturers pose risks to production and operational efficiency[108][112]. - Business operations are vulnerable to disruptions from natural disasters, including climate-related events, which could significantly delay product shipments and installations[231]. - Concerns about terrorism, political turmoil, and epidemic diseases could negatively impact the operations of the company's facilities and those of its contract manufacturers, suppliers, and customers[232]. Customer Relations and Sales - A significant portion of revenue is generated from product sales to new customers and additional sales to existing customers, with sales cycles lasting several months[101]. - The company faces challenges in attracting and retaining new customers and selling additional products to existing customers[103]. - The company must effectively manage relationships with reseller partners to ensure successful marketing and distribution of products[105][107]. Cybersecurity - Cybersecurity threats are constantly evolving, requiring the company to allocate additional resources to strengthen defenses against potential breaches[162]. - Cybersecurity incidents can lead to the misappropriation or destruction of critical data, impacting business operations and customer trust[165]. - The company has experienced cyber-attacks but has not yet faced material adverse impacts on its operations or financial condition[166]. Intellectual Property - The company’s ability to protect its intellectual property rights is crucial for maintaining its competitive position, with potential challenges in enforcing these rights[175]. - Legal actions to enforce intellectual property rights could result in substantial costs and divert resources from core business operations[177]. - The company may face significant damages and legal costs if found to infringe third-party intellectual property rights, which could harm its financial condition[180]. Tax and Financial Obligations - Changes in tax laws, such as the recent U.S. Inflation Reduction Act, could adversely affect the company's tax obligations and effective tax rates[201]. - The company may face additional costs and liabilities due to compliance with anti-corruption laws and export controls, which could impact financial condition[202]. - As of December 31, 2024, the company had federal net operating loss carryforwards of $20.1 million, which begin to expire in 2033, and an additional $203.3 million that do not expire but are limited to offsetting up to 80% of taxable income in any given year[213].

Financial Performance - Evolv generated revenue of $74.8 million for the nine months ended September 30, 2024, compared to $59.0 million for the same period in 2023, representing a year-over-year increase of approximately 26.4%[173]. - The company reported a net loss of $38.3 million for the nine months ended September 30, 2024, significantly improved from a net loss of $90.9 million for the same period in 2023[173]. - Total revenue for the three months ended September 30, 2024, was $27.36 million, a 37% increase from $19.96 million in the same period of 2023[202]. - Total revenue for the nine months ended September 30, 2024, was $74.77 million, an increase of $15.78 million (27%) from $58.99 million in 2023[218]. - The company reported a net loss of $30.44 million for Q3 2024, a significant decline from a net income of $5.05 million in Q3 2023, representing a 703% decrease[202]. - The net loss for the nine months ended September 30, 2024, was $38.30 million, a decrease of $52.55 million (58%) from a net loss of $90.85 million in 2023[218]. Revenue Sources - Evolv's solutions are offered primarily under a multi-year subscription model, providing predictable revenue streams and enhancing customer value[163]. - Evolv's revenue is derived from multiple sources, including subscription arrangements, product sales, and professional services, with subscription revenue recognized ratably over the lease term[175][177]. - Subscription revenue increased by 82% to $17.91 million in Q3 2024, compared to $9.86 million in Q3 2023[205]. - Subscription revenue surged by $24.05 million (101%) to $47.78 million for the nine months ended September 30, 2024, compared to $23.73 million in 2023[221]. - Service revenue increased by $6.15 million (57%) to $16.90 million for the nine months ended September 30, 2024, compared to $10.75 million in 2023[222]. - License fee and other revenue increased by 48% to $5.29 million for the nine months ended September 30, 2024, compared to $3.58 million in 2023[223]. Customer Growth - The company added 52 new customers during the three months ended September 30, 2024, contributing to growth in sales[203]. - The company added 189 new customers during the nine months ended September 30, 2024, contributing to revenue growth[219]. Operating Expenses - Total operating expenses rose by 9% to $34.96 million in Q3 2024, compared to $32.08 million in Q3 2023[202]. - Research and development expenses were $5.81 million in Q3 2024, a 9% decrease from $6.39 million in Q3 2023[202]. - Sales and marketing expenses increased by $558,000 (4%) to $14.97 million for the three months ended September 30, 2024, compared to $14.41 million in 2023[210]. - General and administrative expenses rose by $2.72 million (24%) to $13.98 million for the three months ended September 30, 2024, compared to $11.26 million in 2023[211]. - Research and development expenses decreased by 1% to $18.06 million for the nine months ended September 30, 2024, primarily due to higher capitalized payroll costs[224]. - Sales and marketing expenses increased by 18% to $47.84 million for the nine months ended September 30, 2024, driven by new hires and increased stock-based compensation[225]. - General and administrative expenses rose by 28% to $39.88 million for the nine months ended September 30, 2024, largely due to increased personnel costs and one-time regulatory expenses[226]. Profitability Metrics - Gross profit for subscription revenue was $10.56 million, representing an 85% increase from $5.70 million in the prior year[205]. - The gross profit margin for subscription revenue was 59% in Q3 2024, slightly up from 58% in the prior year[205]. - The gross profit margin for subscription revenue was 60% for the nine months ended September 30, 2024, compared to 59% in 2023[221]. - Gross profit from license fee and other revenue rose by 71% to $4.81 million, with a gross profit margin of 91% for the nine months ended September 30, 2024, up from 78% in 2023[223]. Cash Flow and Financial Position - Cash, cash equivalents, and marketable securities totaled $56.0 million as of September 30, 2024, expected to fund operating expenses for at least twelve months[235]. - The company incurred cash outflows from operating activities of $34.1 million for the nine months ended September 30, 2024, compared to $6.7 million in 2023[233]. - Interest income decreased to $2.4 million for the nine months ended September 30, 2024, down from $4.6 million in 2023[229]. - Cash provided by investing activities for the nine months ended September 30, 2024, was $11.9 million, while cash used in investing activities for the same period in 2023 was $92.8 million[244][246]. - Cash provided by financing activities for the nine months ended September 30, 2024, was $1.2 million, a significant decrease from the $29.7 million used in financing activities during the same period in 2023[247][248]. - The company invested $24.4 million in property and equipment during the nine months ended September 30, 2024, primarily for Evolv Express units[244]. Market and Operational Risks - The company expects fluctuations in revenue and operating results due to factors such as rising inflation, supply chain issues, and shifts towards touchless security screening[167][168]. - The company has restated certain previously reported financial information for the fiscal year ended December 31, 2023, impacting its consolidated financial statements[158]. - There were no new accounting pronouncements that materially impacted the company's financial position or operations since the issuance of the 2023 Form 10-K[249]. - The company reported no material changes in critical accounting estimates during the nine months ended September 30, 2024[250]. - Market risks remained unchanged from the disclosures in the 2023 Form 10-K[251].

Company Overview - Evolv Technologies Holdings, Inc (NASDAQ: EVLV) specializes in using sensors and cameras to detect unwanted objects, focusing primarily on weapons and explosives, which are challenging for traditional security methods [1] Investment Strategy - The investment strategy targets companies with a market capitalization of less than $10 billion, aiming for those with a proven ability to reinvest capital for impressive returns [1] - The ideal companies should demonstrate long-term capital compounding capabilities with a high compound annual growth rate, potentially delivering tenfold returns or greater [1] - A long-term perspective is maintained to generate higher returns compared to market indices, especially in a rapidly evolving investment landscape [1] - A conservative investment strategy is primarily adopted, with occasional pursuits of opportunities that present a favorable risk-reward ratio [1]

Workforce Reduction - The company reported a reduction in force involving 40 employees, representing approximately 14% of its workforce, aimed at increasing annualized run rate cash savings[7] - The expected pre-tax charges for the reduction in force are approximately $2.3 million, primarily consisting of $2.0 million in severance obligations[8] - The reduction in force is anticipated to result in approximately $9.0 million of annualized run rate cash savings, excluding potential new hiring costs[8] - The company plans to complete the reduction in force by March 31, 2025[8] Regulatory Matters - The company is undergoing a pending restatement effort and addressing other regulatory matters[6] - Forward-looking statements indicate potential risks and uncertainties that may affect actual results compared to projections[11] - The company does not plan to publicly update or revise any forward-looking statements unless required by law[12] - The press release detailing these updates was issued on January 23, 2025[6] Investment Strategy - The company is focused on pursuing its investment strategy with certain growth opportunities following the workforce reduction[7] - The Chief Executive Officer's prepared remarks were included in the current report as an exhibit[9]

Core Viewpoint - A class action securities lawsuit has been filed against Evolv Technologies Holdings, Inc. for alleged securities fraud affecting investors between August 19, 2022, and October 30, 2024 [2]. Group 1: Lawsuit Details - The lawsuit aims to recover losses for investors who were adversely affected by alleged securities fraud during the specified period [2]. - The complaint alleges that the company's financial statements from Q2 2022 to Q2 2024 contained material misstatements related to improper revenue recognition and other revenue-related metrics [2]. - It is claimed that Evolv's sales, particularly to a major channel partner, were influenced by undisclosed extra-contractual terms, leading to distorted revenue reporting [2]. Group 2: Company Conduct - The lawsuit suggests that contrary to the company's claims of "growing momentum" and "continued traction" with channel partners, there was misconduct involving sales to one of its largest partners [2]. Group 3: Participation Information - Investors who suffered losses during the relevant timeframe have until December 31, 2024, to request appointment as lead plaintiff, although participation in any recovery does not require serving as lead plaintiff [4]. Group 4: Legal Firm Background - Levi & Korsinsky, LLP has a history of securing significant settlements for shareholders and is recognized as one of the top securities litigation firms in the United States [5].

Core Viewpoint - The article discusses a class action lawsuit against Evolv Technologies Holdings, Inc. (NASDAQ: EVLV) due to allegations of false and misleading statements regarding the company's financial performance and revenue recognition practices [2][4]. Group 1: Allegations - The complaint alleges that Evolv's financial statements from Q2 2022 to Q2 2024 contained material misstatements related to improper revenue recognition and other metrics tied to revenue [2]. - It is claimed that sales to one of Evolv's largest channel partners were subject to undisclosed extra-contractual terms, which distorted the reported revenue and metrics during the class period [2]. - Contrary to the company's claims of "growing momentum" and "continued traction," there were allegations of misconduct by company personnel regarding sales to a major channel partner [2]. Group 2: Next Steps for Shareholders - Shareholders who purchased EVLV shares during the specified class period are encouraged to register for updates and monitoring of the case [3]. - The deadline for seeking lead plaintiff status is December 31, 2024, and participation in the case incurs no cost or obligation [3][5]. - The Gross Law Firm, which is handling the case, emphasizes its commitment to protecting investors' rights and ensuring responsible business practices [5].

Core Viewpoint - The article discusses a class action lawsuit against Evolv Technologies Holdings, Inc. (NASDAQ: EVLV) due to allegations of false and misleading statements regarding the company's financial performance and revenue recognition practices during the specified class period [2][4]. Group 1: Allegations - The complaint alleges that Evolv's financial statements from Q2 2022 to Q2 2024 contained material misstatements related to improper revenue recognition and other metrics tied to revenue [2]. - It is claimed that sales to one of Evolv's largest channel partners were subject to undisclosed extra-contractual terms, which distorted the reported revenue and other related metrics during the class period [2]. - Contrary to the company's claims of "growing momentum" and "continued traction," there were allegations of misconduct by company personnel regarding sales to a major channel partner [2]. Group 2: Next Steps for Shareholders - Shareholders who purchased EVLV shares during the class period are encouraged to register for updates and monitoring of the case [3]. - The deadline for shareholders to seek lead plaintiff status is December 31, 2024, with no cost or obligation to participate in the case [3][5]. - The Gross Law Firm, which is handling the case, emphasizes its commitment to protecting investors' rights and ensuring responsible business practices [5].

NEW YORK, Dec. 23, 2024 /PRNewswire/ -- The Gross Law Firm issues the following notice to shareholders of Evolv Technologies Holdings, Inc. (NASDAQ: EVLV).Shareholders who purchased shares of EVLV during the class period listed are encouraged to contact the firm regarding possible lead plaintiff appointment. Appointment as lead plaintiff is not required to partake in any recovery.CONTACT US HERE:https://securitiesclasslaw.com/securities/evolv-technologies-holdings-inc-loss-submission-form-2/?id=117765&from= ...

Core Insights - Evolv Technologies Holdings Inc. is under investigation for potential claims related to material misstatements in its financial statements [1][3] - The company announced that its financial statements from Q2 2022 to Q2 2024 should not be relied upon due to issues affecting revenue recognition [3] - Evolv has self-reported these issues to the SEC and is delaying its Q3 2024 quarterly report [3] Company Overview - Evolv Technologies Holdings, Inc. specializes in security technology, utilizing AI-based screening to enhance safety [2] - The company has faced allegations of misconduct involving certain sales and extracontractual terms not disclosed to accounting personnel [3] Legal Context - Moore Law, PLLC is investigating claims against Evolv for shareholders who purchased shares before August 19, 2022 [1][4] - Potential remedies for affected shareholders include seeking damages, corporate reforms, and reimbursement at no cost [4][5]

NEW YORK, Dec. 20, 2024 /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Evolv Technologies Holdings, Inc. ("Evolv" or the "Company") (NASDAQ: EVLV). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.The class action concerns whether Evolv and certain of it ...