Company: EVLVW
Filing Date: 2025-03-31
Form Type: NT 10-K
Source: 0001104659-25-029637
Chunk: 2

Company: Evolv Technologies Holdings, Inc.
Filing Date: 2025-03-31
Form: NT 10-K
Chunk 2
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recognition and other metrics, and if so, when senior Company personnel became aware of these issues (the “Investigation”).

As a result of the Investigation, the Committee
determined that certain sales, including sales to one of its largest channel partners, were subject to extra-contractual terms and conditions,
some of which were not shared with the Company’s accounting personnel, and that certain Company personnel engaged in misconduct
in connection with those transactions. Furthermore, these extra-contractual terms and conditions were withheld from the Company’s
Audit Committee of the Board (the “Audit Committee”) and the Company’s independent registered public accounting firm,
PricewaterhouseCoopers LLP (“PwC”). The Committee also determined that certain accounting personnel were aware of indications
of these extra-contractual terms and conditions during affected periods, and that related allegations were raised internally in July 2024
and known to senior finance and accounting personnel, but that those allegations were not escalated to the Audit Committee or communicated
to PwC prior to the filing of the Company’s second quarter 2024 financial statements.

Accordingly, the Committee determined that the
accounting for certain sales transactions was inaccurate and that, among other things, revenue was prematurely or incorrectly recognized
in connection with financial statements prepared for the Non-Reliance Periods. The Committee determined that these misstatements are material
for certain financial statements prepared for these periods and that the recognition of revenue in the proper periods impacted each of
those financial statements. The Committee determined that the vast majority of this revenue was prematurely rather than incorrectly recognized.
Other previously reported metrics that are a function of revenue were also misstated as a result of these revenue misstatements.

Management has also evaluated the
Company’s internal control over financial reporting and determined that material weaknesses in the control environment, risk
assessment and information and communication components of internal control, as well as a material weakness related to revenue
control activities, resulted in the restatement of the consolidated financial statements for the Non-Reliance Periods, which are in
addition to previously disclosed material weaknesses.

The Company is unable to file the Annual Report
without unreasonable effort or expense because it needs additional time for the Company to prepare amendments to its financial statements
addressing the misstatements described above and to complete its financial statements for the annual period ended December 31, 2024. The
Company continues to work expeditiously to prepare amendments to its financial statements. As previously disclosed, the Company received
a letter from the Nas