Evolv Technologies (EVLV) Shares Crash After Admitting To Improper Revenue Recognition – Hagens Berman

Core Viewpoint - Evolv Technologies Holdings, Inc. experienced a significant decline in share price, dropping over 40% after announcing misconduct related to sales practices and the need to restate financials for a two-year period [1][2]. Group 1: Company Financials and Misconduct - Evolv stated that it would not file its quarterly report on Form 10-Q for the quarter ended September 30, 2024, raising concerns about its financial reporting [2]. - The company made a preliminary determination that certain sales, including those to a major channel partner, were subject to extra-contractual terms and conditions, and that misconduct occurred among certain personnel [2]. - Revenue was found to have been prematurely or incorrectly recognized in financial statements for periods between Q2 2022 and Q2 2024, leading to warnings against relying on financial statements for multiple reporting periods [2]. Group 2: Market Reaction and Investigation - Following the announcement, Evolv's share price plummeted approximately 46% during intraday trading on October 25, 2024 [3]. - Hagens Berman has initiated an investigation into Evolv, focusing on whether the company intentionally misrepresented its financials and the implications of the pending restatements [3].