Evolv Technologies Holdings, Inc.EVLV
Evolv Technologies Holdings, Inc. Fair Value Disclosure
Fair Value Measurements
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy used to determine such fair values (in thousands):
| Fair Value Measurements at December 31, 2024 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 28,946 | $ | — | $ | — | $ | 28,946 | |||||||||||||||
| Treasury bills | — | 27,417 | — | 27,417 | |||||||||||||||||||
| $ | 28,946 | $ | 27,417 | $ | — | $ | 56,363 | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent earn-out liability | $ | — | $ | — | $ | 12,809 | $ | 12,809 | |||||||||||||||
| Contingently issuable common stock liability | — | — | 4,001 | 4,001 | |||||||||||||||||||
| Public Warrant liability | 4,297 | — | — | 4,297 | |||||||||||||||||||
| $ | 4,297 | $ | — | $ | — | $ | 16,810 | $ | — | $ | 21,107 | ||||||||||||
| Fair Value Measurements at December 31, 2023 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Money market funds | $ | 57,829 | $ | — | $ | — | $ | 57,829 | |||||||||||||||
| Treasury bills | $ | — | $ | 51,289 | $ | — | $ | 51,289 | |||||||||||||||
| $ | 57,829 | $ | 51,289 | $ | — | $ | 109,118 | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Contingent earn-out liability | — | — | 29,119 | 29,119 | |||||||||||||||||||
| Contingently issuable common stock liability | — | — | 6,530 | 6,530 | |||||||||||||||||||
| Public Warrant liability | 10,889 | — | — | 10,889 | |||||||||||||||||||
| $ | 10,889 | $ | — | $ | 35,649 | $ | 46,538 | ||||||||||||||||
Money market funds are included in cash and cash equivalents on the consolidated balance sheets. As of December 31, 2024, U.S. treasury bills with maturities less than 3 months, which totaled $12.5 million, are included in cash and cash equivalents, while treasury bills with maturities greater than 3 months, which totaled $14.9 million, are reflected as marketable securities. As December 31, 2023, all outstanding treasury bills, which totaled $51.3 million, had original maturities greater than three months and are reflected as marketable securities. The fair value of the treasury bills, which are classified as Level 2 securities, is calculated by a third-party pricing service and is based on estimates obtained from various sources.
The Company may also value its non-financial assets and liabilities, including items such as inventories and property and equipment, at fair value on a non-recurring basis if it is determined that impairment has occurred. Such fair value measurements use significant unobservable inputs and are classified as Level 3.
The carrying amounts of cash and cash equivalents, accounts receivable, restricted cash, accounts payable, accrued liabilities, and other accrued expenses approximate fair value because of their short maturity.
During each of the years ended December 31, 2024 and 2023, there were no transfers between Level 1, Level 2, and Level 3.
Valuation of Contingent Earn-out
Pursuant 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. 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 December 31, 2024, 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 December 31, 2024 were as follows: 93% expected stock price volatility, a risk-free rate of return of 4.2%, a 25% likelihood of change in control, and a remaining term of 1.2 years.
The following table provides a rollforward of the contingent earn-out liability (in thousands):
| Balance at December 31, 2021 | $ | 21,206 | |||
| Change in fair value | (6,988) | ||||
| Balance at December 31, 2022 | $ | 14,218 | |||
| Change in fair value | 14,901 | ||||
| Balance at December 31, 2023 | $ | 29,119 | |||
| Change in fair value | (16,310) | ||||
| Balance at December 31, 2024 | $ | 12,809 | |||
The decrease in fair value of the contingent earn-out liability is primarily due to lowered probability to achieve the stock price milestones based on the Company's current stock price and a shorter remaining term.
Valuation of Contingently Issuable Common Stock
Prior to the Merger, certain NHIC stockholders owned 4,312,500 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. The Company’s contingently issuable common shares were recorded at fair value on the closing of the Merger and are remeasured each reporting period. As of December 31, 2024, no milestones have been achieved.
The fair value of the contingently issued common shares is determined using a Monte Carlo analysis in order to simulate the future path of the Company’s stock price over the vesting 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 December 31, 2024 were as follows: 93% expected stock price volatility, a risk-free rate of return of 4.2%, a 25% likelihood of change in control, and a remaining term of 1.5 years.
The following table provides a rollforward of the contingently issuable common shares (in thousands):
| Balance at December 31, 2021 | $ | 5,264 | |||
| Change in fair value | (1,872) | ||||
| Balance at December 31, 2022 | $ | 3,392 | |||
| Change in fair value | 3,138 | ||||
| Balance at December 31, 2023 | $ | 6,530 | |||
| Change in fair value | (2,529) | ||||
| Balance at December 31, 2024 | $ | 4,001 | |||
Valuation of Public Warrant Liability
In connection with the closing of the Merger, the Company assumed the Public Warrants to purchase shares of the Company’s common stock. The Public Warrants are immediately exercisable and expire in July 2026. The Public Warrants are classified as a liability and are subsequently remeasured to fair value at each reporting date based on the closing price as reported by Nasdaq on the last date of the reporting period. As of December 31, 2024, 14,324,893 Public Warrants are outstanding.
The following table provides a rollforward of the public warrant liability (in thousands):
| Balance at December 31, 2021 | $ | 11,030 | |||
| Change in fair value | (4,906) | ||||
| Balance at December 31, 2022 | $ | 6,124 | |||
| Change in fair value | 4,765 | ||||
| Balance at December 31, 2023 | $ | 10,889 | |||
| Change in fair value | (6,592) | ||||
| Balance at December 31, 2024 | $ | 4,297 | |||
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2024 | Apr 28, 2025 | Showing above |
| 2021 | Mar 28, 2022 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.