Company: EVLVW
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001805385-25-000009
Chunk: 196

Company: Evolv Technologies Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 196
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 THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

Valuation of Contingent Earn-outPursuant to the Merger Agreement, the Legacy Evolv stockholders, immediately prior to the Merger, were entitled to receive additional shares of the Company’s common stock upon the Company achieving certain milestones as described in Note 3 of our consolidated financial statements of our 2024 Form 10-K. The Company’s contingent earn-out shares were recorded at fair value as contingent earn-out liability upon the closing of the Merger and are remeasured each reporting period. As of June 30, 2025, no milestones have been achieved.The fair value of the contingent earn-out is calculated using a Monte Carlo analysis in order to simulate the future path of the Company’s stock price over the earn-out period. The carrying amount of the liability may fluctuate significantly and actual amounts paid may be materially different from the liability’s estimated value. The significant assumptions used in the Monte Carlo model as of June 30, 2025 were as follows: 85% expected stock price volatility, a risk-free rate of return of 4.2%, a 15% likelihood of change in control and a remaining term of 0.7 years. The assumed likelihood of change in control was reduced to 15% as of June 30, 2025 from 25% as of March 31, 2025, reflecting the shortened remaining term of less than one year.The following table provides a rollforward of the contingent earn-out liability (in thousands):Balance at December 31, 2024$12,809 Change in fair value5,224 Balance at June 30, 2025$18,033 The increase in fair value of the contingent earn-out liability is primarily due to the increase in the Company's current stock price.Valuation of Contingently Issuable Common StockPrior to the Merger, certain NHIC stockholders owned 4,312,500 shares of NHIC Class B common stock which were converted into shares of the Company's stock in connection with the Merger (the “Founder Shares”). Of these shares, 1,897,500 shares vested at the closing of the Merger, 517,500 shares were transferred back to NHIC and then contributed to Give Evolv LLC, and the remaining 1,897,500 outstanding shares will vest upon the Company achieving certain milestones as described in Note 3 of our consolidated financial statements of our 2024