Evolv Technologies Holdings, Inc 10-Q for FY2022 Q1

Evolv Technologies Holdings, Inc. (EVLV)

10-Q 2022-05-13 For: 2022-03-31

Added on April 04, 2026

About this 10-Q

Evolv Technologies Holdings, Inc filed this 10-Q on May 13, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $8.72M; up 117.9% from $4M a year earlier
Net loss: $14.55M; compared with a net loss of $13.76M a year earlier
Diluted EPS: -$0.10; compared with -$1.32 a year earlier

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Delaware	84-4473840
(State of Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
500 Totten Pond Road, 4^th Floor, Waltham, MA	02451
(Address of Principal Executive Offices)	(Zip Code)


		Name of each exchange
Title of each class	Trading Symbol(s)	on which registered
Common Stock, $0.0001 Par Value per Share Warrants to purchase one share of Common Stock	EVLV EVLVW	The Nasdaq Stock Market The Nasdaq Stock Market


Large accelerated filer ☐	Accelerated filer ☐	Non-accelerated filer ☒	Smaller reporting company ☒	Emerging growth company ☒

		Page
PART I	Financial Information

Item 1.	Financial Statements

	Condensed Consolidated Balance Sheets (Unaudited)	F-1

	Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)	F-2

	Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit) (Unaudited)	F-3

	Condensed Consolidated Statements of Cash Flows (Unaudited)	F-4

	Notes to Condensed Consolidated Financial Statements	F-5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	17

Item 4.	Controls and Procedures	18

PART II	Other Information	21

Item 1.	Legal Proceedings	21

Item 1A.	Risk Factors	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21

Item 3.	Defaults Upon Senior Securities	21

Item 4.	Mine Safety Disclosures	21

Item 5.	Other Information	21

Item 6.	Exhibits	22

Signatures		23


	March 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	270,872	$	307,492
Restricted cash		400		400
Accounts receivable, net		8,589		6,477
Inventory		7,181		5,140
Current portion of contract assets		1,448		1,459
Current portion of commission asset		1,477		1,645
Prepaid expenses and other current assets		17,252		11,047
Total current assets		307,219		333,660
Restricted cash, noncurrent		275		275
Contract assets, noncurrent		3,321		3,418
Commission asset, noncurrent		4,239		3,719
Property and equipment, net		25,282		21,592
Operating lease right-of-use assets		2,287		—
Other assets		1,275		401
Total assets	$	343,898	$	363,065

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	4,645	$	6,363
Accrued expenses and other current liabilities		7,118		9,183
Current portion of deferred revenue		7,433		6,690
Current portion of deferred rent		—		135
Current portion of long-term debt		3,000		2,000
Current portion of operating lease liabilities		1,089		—
Total current liabilities		23,285		24,371
Deferred revenue, noncurrent		4,517		2,475
Deferred rent, noncurrent		—		333
Long-term debt, noncurrent		6,950		7,945
Operating lease liabilities, noncurrent		1,634		—
Contingent earn-out liability		18,128		20,809
Contingently issuable common stock liability		3,792		5,264
Public warrant liability		5,444		11,030
Total liabilities		63,750		72,227
Commitments and contingencies (Note 20)

Stockholders’ equity:
Preferred stock, $0.0001 par value; 100,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued and outstanding at March 31, 2022 and December 31, 2021		—		—
Common stock, $0.0001 par value; 1,100,000,000 shares authorized at March 31, 2022 and December 31, 2021; 143,322,036 and 142,745,021 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively		14		14
Additional paid-in capital		399,424		395,563
Accumulated deficit		(119,290)		(104,739)
Stockholders’ equity		280,148		290,838
Total liabilities and stockholders’ equity	$	343,898	$	363,065



	Three Months Ended March 31,
	2022		2021
Revenue:
Product revenue	$	5,194	$	2,502
Subscription revenue		3,020		1,300
Service revenue		501		197
Total revenue		8,715		3,999
Cost of revenue:
Cost of product revenue		5,576		2,229
Cost of subscription revenue		1,065		595
Cost of service revenue		448		127
Total cost of revenue		7,089		2,951
Gross profit		1,626		1,048
Operating expenses:
Research and development		4,286		3,612
Sales and marketing		12,053		3,684
General and administrative		11,093		2,899
Loss from impairment of property and equipment		96		—
Total operating expenses		27,528		10,195
Loss from operations		(25,902)		(9,147)
Other income (expense), net:
Interest expense		(142)		(2,447)
Interest income		209		—
Change in fair value of derivative liability		—		(1,425)
Change in fair value of contingent earn-out liability		4,226		—
Change in fair value of contingently issuable common stock liability		1,472		—
Change in fair value of public warrant liability		5,586		—
Change in fair value of common stock warrant liability		—		(736)
Total other income (expense), net		11,351		(4,608)
Net loss and comprehensive loss – basic and diluted	$	(14,551)	$	(13,755)
Net loss per share – basic and diluted	$	(0.10)	$	(1.32)
Weighted average common shares outstanding – basic and diluted		142,878,406		10,443,323


	Convertible						Additional				Total
	Preferred Stock			Common Stock			Paid-in		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity (Deficit)
Balance at December 31, 2021	—	$	—	142,745,021	$	14	$	395,563	$	(104,739)	$	290,838
Issuance of common stock upon net exercise of stock options	—		—	496,971		—		216		—		216
Issuance of common stock upon vesting of restricted stock units	—		—	80,044		—		—		—		—
Stock-based compensation expense	—		—	—		—		3,645		—		3,645
Net loss	—		—	—		—		—		(14,551)		(14,551)
Balance at March 31, 2022	—	$	—	143,322,036	$	14	$	399,424	$	(119,290)	$	280,148

Balance at December 31, 2020	77,340,057		75,877	9,846,830		1		9,194	$	(93,881)	$	(84,686)
Issuance of warrants to purchase common stock	—		—	—		—		1		—		1
Issuance of common stock upon exercise of stock options	—		—	1,563,281		—		455		—		455
Stock-based compensation expense	—		—	—		—		1,082		—		1,082
Net loss	—		—	—		—		—		(13,755)		(13,755)
Balance at March 31, 2021	77,340,057	$	75,877	11,410,111	$	1	$	10,732	$	(107,636)	$	(96,903)


	Fair Value Measurements at March 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	257,555	$	—	$	—	$	257,555
	$	257,555	$	—	$	—	$	257,555
Liabilities:
Contingent earn-out liability	$	—	$	—	$	18,128	$	18,128
Contingently issuable common stock liability		—		—		3,792		3,792
Public Warrant liability		—		—		5,444		5,444
	$	—	$	—	$	27,364	$	27,364


	Fair Value Measurements as of December 31, 2021
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	297,536	$	—	$	—	$	297,536
	$	297,536	$	—	$	—	$	297,536
Liabilities:
Contingent earn-out liability	$	—	$	—	$	20,809	$	20,809
Contingently issuable common stock liability		—		—		5,264		5,264
Public Warrant liability		—		—		11,030		11,030
	$	—	$	—	$	37,103	$	37,103


Balance at December 31, 2021	$	20,809
Change in fair value		(4,226)
Out-of-period adjustment		1,545
Balance at March 31, 2022	$	18,128


	Less than 1 year		Greater than 1 year		Total
Product revenue	$	166	$	39	$	205
Subscription revenue		12,784		29,041		41,825
Service revenue		6		—		6
Maintenance revenue		2,415		6,086		8,501
Total revenue	$	15,371	$	35,166	$	50,537


Future operating lease component:
Year Ending December 31:
2022 (nine months remaining)	$	9,677
2023		12,330
2024		11,137
2025		7,438
2026		1,131
Thereafter		112
	$	41,825


Balance at December 31, 2021	$	9,165
Revenue recognized		(6,409)
Revenue deferred		9,194
Balance at March 31, 2022	$	11,950


Cash paid for amounts included in the measurement of lease liabilities		$	278


Weighted average remaining lease term (in years)	2.6
Weighted average discount rate	6.95	%


Year Ended December 31:
2022 (remaining nine months)	$	838
2023		1,149
2024		982
Total future lease payments	$	2,969
Less: imputed interest		(246)
Present value of operating lease liability	$	2,723


	March 31,		December 31,
	2022		2021
Computers and telecom equipment	$	329	$	40
Lab equipment		568		568
Purchased software		59		—
Furniture and fixtures		37		37
Leasehold improvements		538		491
Leased equipment		24,217		21,100
Internal-use software		1,820		1,029
Sales demo equipment		2,149		1,938
		29,717		25,203
Less: Accumulated depreciation and amortization		(4,435)		(3,611)
	$	25,282	$	21,592


March 31, 2022
	Contractual			Shares Issuable	Weighted
	Term	Underlying Equity	Balance Sheet	Upon Exercise	Average
Issuance Date	(in years)	Instrument	Classification	of Warrant	Exercise Price
January 13, 2021	10	Common stock	Equity	2,552,913	$	0.42
July 16, 2021	5	Common stock	Liability	14,324,993	$	11.50
				16,877,906


December 31, 2021
	Contractual			Shares Issuable	Weighted
	Term	Underlying Equity	Balance Sheet	Upon Exercise of	Average
Issuance Date	(in years)	Instrument	Classification	Warrant	Exercise Price
January 13, 2021	10	Common stock	Equity	2,552,913	$	0.42
July 16, 2021	5	Common stock	Liability	14,324,994	$	11.50
				16,877,907


Year Ended December 31:
2022	$	1,116
2023		1,150
2024		981
Total	$	3,247


	Allowance for Doubtful Accounts
Balance at December 31, 2021	$	(50)
Provisions		—
Write-offs, net of recoveries		—
Balance at March 31, 2022	$	(50)


Year Ending December 31,
2022 (remaining nine months)	$	2,000
2023		4,000
2024		4,000
	$	10,000


	Number of	Grant Date Fair
	Shares	Value

Outstanding as of December 31, 2021	1,951,924	$	6.76
Granted	4,425,142		3.50
Vested	(80,044)		7.95
Canceled	(46,020)		5.92
Outstanding as of March 31, 2022	6,251,002	$	4.44


Warrants - Black Scholes
Risk-free interest rate	0.4	%
Expected term (in years)	3.00
Expected volatility	23.9	%
Expected dividend yield	0.0	%


	Three Months Ended
	March 31,
	2022		2021
Net cash used in operating activities	$	(35,867)	$	(12,038)
Net cash used in investing activities		(969)		(2,522)
Net cash provided by financing activities		216		31,978
Net increase (decrease) in cash, cash equivalents and restricted cash	$	(36,620)	$	17,418


	EVOLV TECHNOLOGIES HOLDINGS, INC.
Date: May 13, 2022	By:	/s/ Mario Ramos
		Mario Ramos
		Chief Financial Officer and Chief Risk Officer (principal financial officer)



	By:	/s/ Peter George
	Name:	Peter George
	Title:	Chief Executive Officer (principal executive officer)