Evolv Technologies Holdings, Inc. Investors: December 31, 2024 Filing Deadline in Securities Class Action - Contact Lieff Cabraser

Rhea-AI Summary

Evolv Technologies Holdings (NASDAQ:EVLV), an AI-based security screening company, is facing a securities class action lawsuit for alleged material misstatements in financial statements between August 19, 2022, and October 30, 2024. On October 25, 2024, the company announced that financial statements from Q2 2022 to Q2 2024 should not be relied upon due to revenue recognition issues and misconduct involving extra-contractual terms with channel partners.

The stock price plummeted 40% from $4.10 to $2.47 following this announcement. A week later, CEO Peter George was terminated, causing another 8% stock drop to $2.15. The company has self-reported these issues to the SEC's Division of Enforcement. The deadline for investors to join the class action as lead plaintiff is December 31, 2024.

Positive

• None.

Negative

• Financial statements from Q2 2022 to Q2 2024 deemed unreliable due to material misstatements
• Discovery of undisclosed extra-contractual terms with major channel partners
• Internal misconduct by company personnel revealed
• Multiple material weaknesses in internal control over financial reporting
• CEO Peter George terminated
• Stock price dropped 40% following initial announcement
• Additional 8% stock decline after CEO termination
• SEC Enforcement Division investigation

Insights

Legal Expert

The securities class action lawsuit against Evolv Technologies reveals serious allegations of financial misconduct and material misstatements in revenue recognition. The company's admission of extra-contractual terms with major channel partners and employee misconduct, coupled with plans to report additional material weaknesses in internal controls, suggests significant governance failures. The self-reporting to the SEC's Division of Enforcement indicates the gravity of these issues. The subsequent termination of CEO Peter George further compounds the severity of the situation. The stock's dramatic 40% drop following these revelations demonstrates substantial market impact. Investors within the class period face potential financial recovery through this legal action, with a critical deadline of December 31, 2024.

Financial Analyst

The financial implications of Evolv's accounting irregularities are severe. The need to restate financial statements from Q2 2022 through Q2 2024 indicates widespread revenue recognition issues that could significantly alter the company's historical financial position. The involvement of a major channel partner suggests these misstatements could be material to overall revenue figures. The delay in Q3 2024 filing and multiple material weaknesses in financial controls raise serious concerns about the reliability of Evolv's financial reporting. The cumulative stock decline of nearly 48% from these revelations has erased approximately $280 million in market value, significantly impacting investor portfolios.

SAN FRANCISCO, CA / ACCESSWIRE / December 16, 2024 / National plaintiffs law firm Lieff Cabraser Heimann & Bernstein, LLP encourages investors in Evolv Technologies Holdings, Inc. ("Evolv" or the "Company") (NASDAQ:EVLV) who suffered losses from purchasing or otherwise acquiring Evolv securities between August 19, 2022 and October 30, 2024, inclusive(the "Class Period"), to contact us immediately regarding a pending securities class action against Evolv. The deadline to apply to be lead plaintiff is December 31, 2024.

Class Period: August 19, 2022 - October 30, 2024

Lead Plaintiff Motion Deadline: December 31, 2024

Case information:lieffcabraser.com/securities/evolv

Contact us: Email or textinvestorinfo@lchb.com or call 1-800-541-7358

Evolv is a security technology company that utilizes AI-based screening designed to help create safer experiences. The Company's key market categories include education, healthcare, sports, and live entertainment.

The action alleges that during the Class Period, Evolv made material misstatements in its financial statements relating revenue recognition and other revenue-related metrics. The truth began to emerge on October 25, 2024, when Evolv announced that its financial statements issued between the second quarter of 2022 and the second quarter of 2024 should not be relied upon due to material misstatements impacting revenue recognition and other reported metrics that are a function of revenue. The Company revealed that "certain sales, including sales to one of its largest channel partners, were subject to extra-contractual terms and conditions" that were not shared with Evolv's accounting personnel and that "certain Company personnel engaged in misconduct in connection with those transactions." In addition, Evolv announced plans to "report one or more additional material weaknesses in internal control over financial

reporting," and that the filing of its quarterly report for the third quarter of 2024 will be delayed. According to the Company, it has "self-reported these issues" to the SEC's Division of Enforcement. On this news, Evolv's common stock price fell $1.63 per share, or approximately 40%, from its closing price of $4.10 per share on October 24, 2024, to close at $2.47 per share on October, 25, 2024, on unusually high trading volume.

A week later, Evolv announced that the Company's long-time CEO Peter George had been terminated and temporarily replaced by the Company's Chief Innovation Officer. Following this news, Evolv's common stock price fell $0.19 per share, or approximately 8%, from its closing price of $2.34 per share on October 30, 2024 to close at $2.15 per share on October 31, 2024, on unusually high trading volume.

About Lieff Cabraser

Lieff Cabraser Heimann & Bernstein, LLP, with over 125 attorneys in offices in San Francisco, New York, Nashville, and Munich, Germany, is an internationally-recognized law firm committed to advancing the rights of investors and promoting corporate responsibility. Repeatedly recognized as a "Plaintiffs' Powerhouse" by Law360, Lieff Cabraser has litigated some of the most important civil cases in the United States, and has assisted clients in recovering over $129 billion in verdicts and settlements. For over 50 years, Lieff Cabraser has remained committed to ensuring access to justice for all.

Source/Contact

Sharon Lee
Lieff Cabraser Heimann & Bernstein, LLP
415 956-1000
slee@lchb.com

SOURCE: Lieff Cabraser Heimann & Bernstein, LLP

View the original press release on accesswire.com

FAQ

What caused EVLV stock to drop 40% on October 25, 2024?

EVLV stock dropped 40% after the company announced material misstatements in its financial statements from Q2 2022 to Q2 2024, revealing issues with revenue recognition and undisclosed extra-contractual terms with channel partners.

Why was Evolv Technologies (EVLV) CEO Peter George terminated?

Peter George was terminated following the disclosure of material misstatements in financial statements and internal misconduct related to undisclosed extra-contractual terms with channel partners.

What is the deadline for joining the EVLV securities class action lawsuit?

The deadline to apply as lead plaintiff in the securities class action lawsuit against Evolv Technologies is December 31, 2024.

What period does the EVLV class action lawsuit cover?

The class action lawsuit covers investors who purchased Evolv Technologies (EVLV) securities between August 19, 2022, and October 30, 2024.

What financial issues did Evolv Technologies (EVLV) self-report to the SEC?

Evolv self-reported material misstatements in financial statements, revenue recognition issues, and misconduct related to undisclosed extra-contractual terms with channel partners to the SEC's Division of Enforcement.