Evolv Technologies Holdings (EVLV) FY2025 10-K Risk Factors: 14 New, 15 Dropped

What the changes say

Evolv Technologies added specific risks covering material financial weaknesses, FTC settlement compliance, and international expansion hurdles.

What changed since the prior 10-K

New

NewRisks Related to Our Restatement and Internal Controls
Material weaknesses in our internal control over financial reporting, which contributed to the previously disclosed restatement of our prior period financial statements expose us to significant risks and uncertainties
Material weaknesses in internal controls led to restatements of our 2022 and 2023 annual financials and 2024 quarterly financials.
NewRisks Related to Our Business and Operations
Defects and poor quality which require rework, replacement parts or systems and associated costs of service could have an adverse effect on our business and results of operations
Manufacturing defects or poor quality from third-party suppliers could increase our warranty, repair, and service costs.
NewRisks Related to Our Industry and Products
We face the risk of losing recurring revenue and forecasting certainty if customers choose not to renew their typical four‑year subscriptions or if renewal terms result in lower revenue than expiring agreements, and significant losses if returned systems cannot be profitably redeployed
Customers might not renew their four-year subscriptions or might negotiate lower rates, reducing our recurring revenue and forecasting certainty.
NewRisks Related to Our Industry and Products
have limited historical experience managing renewals at the current and growing scale of our customer base. Increased churn or lower renewal rates could adversely affect our recurring revenue, forecasting certainty, and overall financial performance, with impacts that may become more pronounced in future periods
Customers upgrading to new products return older systems, which may cause asset impairment losses if we cannot successfully refurbish and redeploy them.
NewRisks Related to Our Industry and Products
Our expansion into international markets exposes us to additional operational, regulatory, and compliance risks that could adversely affect our business
Expanding outside the U.S. exposes us to local product certifications, import/export controls, and foreign data protection and AI laws.
NewRisks Related to Our Industry and Products
Our growth potential outside the U.S. may be limited or vary due to differences in security threats, customer perceptions, regulatory environments, and international market dynamics, as well as our own expansion and investment priorities
International growth may be limited if foreign customers do not perceive weapons-related security threats to be sufficiently prevalent.
NewRisks Related to Our Industry and Products
Our business depends on the reliability, availability, and performance of our information technology systems, including key internal enterprise software solutions, and any failure or disruption of these systems could materially and adversely affect our business
Disruptions in our enterprise software systems and cloud infrastructure could harm our internal operations and customer-facing portals.
NewRisks Related to Our Industry and Products
In fact, we and our third-party vendors have experienced, and expect to continue to experience, cyber-attacks, such as through phishing scams and ransomware attempts, and such incidents could have a material adverse impact on our operations or financial condition in the future
We and our third-party vendors have experienced cyber-attacks like phishing and ransomware, risking regulatory penalties and reputational harm.
NewLegal and Regulatory Risks
business, we are, and may increasingly become subject to various laws, regulations, and standards in the jurisdictions in which we operate, and may be subject to contractual obligations relating to data privacy and security in the jurisdictions in which we operate
Inaccurate or untrue online privacy statements could subject us to FTC and state attorney general claims of deceptive trade practices.
NewLegal and Regulatory Risks
We are subject to government investigations, regulatory enforcement proceedings and litigation relating to our business conduct, marketing practices, financial restatement and investigation, which could result in significant penalties, injunctive relief and harm to our business
An FTC Stipulated Order entered in December 2024 required us to let certain school customers cancel contracts and enjoined us from misleading marketing.
NewRisks Related to Our Financial Condition and Liquidity
depending on jurisdiction-specific rules. Additionally, as of December 31, 2025 and 2024, we had United Kingdom net operating loss carryforwards of approximately $1.4 million and $1.7 million, respectively, which do not expire under current UK tax law
Our U.S. federal and state tax credit carryforwards of $2.4 million and $1.4 million are subject to annual limitations under Sections 382 and 383.
NewRisks Related to Our Financial Condition and Liquidity
Our existing and future debt obligations may adversely affect our financial condition and future financial results
Our $30.0 million drawn term loan reduces cash flow available for operations and increases our vulnerability to interest rate increases.
NewRisks Related to Our Financial Condition and Liquidity
Our Senior Secured Credit Facilities contain affirmative and negative covenants, including financial covenants, that may limit our operating flexibility
NewRisks Related to Our Common Stock and Warrants
may in the future become subject to similar attacks, which may lead to increased volatility in the price of our common stock

Dropped

DroppedRisks Related to Our Restatement and Internal Controls
We identified certain misstatements to our previously issued financial statements and have restated the financial statements described below, which has exposed us to a number of additional risks and uncertainties
Restated previously issued financial statements for fiscal years 2022 and 2023.
DroppedRisks Related to Our Restatement and Internal Controls
We have identified material weaknesses in our internal control over financial reporting, which have led to restatements and caused us to fail to meet our periodic reporting obligations, and this could occur again the future
Material weaknesses in internal controls led to restatements and delayed periodic reports.
DroppedRisks Related to Our Restatement and Internal Controls
Our failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debt or equity capital
Failure to timely file periodic reports with the SEC limited our access to public debt or equity markets.
DroppedRisks Related to Our Business and Operations
If we are not able to maintain and enhance our brand or reputation as an industry leader, our business and operating results may be adversely affected
DroppedRisks Related to Our Industry and Products
We may be unable to acquire new customers, sell additional products to our customers, or retain our existing customers
DroppedRisks Related to Our Industry and Products
Our products collect and store personal data about individuals, including our customers, their visitors, and our employees, as well as other proprietary business and confidential information
DroppedRisks Related to Our Intellectual Property
applications for additional marks in the United States and other countries. We cannot be certain that any pending or future applications will issue as registered trademarks or that any registered trademarks will be enforceable or provide adequate protection of our proprietary rights
DroppedLegal and Regulatory Risks
Our failure, or perceived failure, to comply fully with developing interpretations of AI laws and regulations or meet evolving and varied stakeholder expectations and industry standards, could harm our business, reputation, financial condition and results of operation
DroppedLegal and Regulatory Risks
Our operating results may be harmed if we are required to collect sales and use or other related taxes for our products in jurisdictions where it has not historically done so
DroppedLegal and Regulatory Risks
We are and may in the future be subject to legal proceedings, claims and investigations in or outside the ordinary course of business
DroppedLegal and Regulatory Risks
We are and may in the future be subject to litigation and regulatory examinations, investigations, proceedings or orders as a result of or relating to the Investigation and our failure to timely file our periodic reports with the SEC
DroppedRisks Related to Our Financial Condition and Liquidity
As of December 31, 2024, we had gross U.S. federal and state research and development and other tax credit carryforwards of $2.4 million and $1.5 million, respectively, which may be available to offset future tax liabilities and the majority of which begin to expire in 2033 and 2030, respectively
DroppedRisks Related to Our Common Stock and Warrants
Because we do not intend to pay any cash dividends for the foreseeable future, capital appreciation, if any, would be your sole source of gain
Failure to maintain and enhance our brand and reputation as an AI weapons detection leader.
DroppedRisks Related to Our Common Stock and Warrants
Future sales, or the perception of future sales, of common stock by our existing security holders in the public market may cause the market price of our securities to decline
DroppedRisks Related to Our Common Stock and Warrants
Our reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States

Reworded

68% rewrittenLegal and Regulatory Risks
We are subject to government regulation and other legal obligations, particularly related to privacy, data protection, information security, and product marketing and our actual or perceived failure to comply with such obligations could harm our business
Updated jurisdictional wording from the United States to the U.S. regarding regulatory frameworks.
59% rewrittenRisks Related to Our Intellectual Property
Our intellectual property rights are valuable and any inability to protect our proprietary technology and intellectual property rights could substantially harm our business and operating results
Updated jurisdictional references from the United States to the U.S. regarding intellectual property protections.
42% rewrittenLegal and Regulatory Risks
Failure to comply with applicable anti-corruption legislation, export controls, economic sanctions and tax laws could result in fines and criminal penalties and materially and adversely affect our business, financial condition, and results of operations
Removed 'the' before FCPA when referencing anti-corruption legislation compliance.
Was: Failure to comply with applicable anti-corruption legislation, export controls, economic sanctions and other governmental laws and regulations could result in fines and criminal penalties and materially adversely affect our business, financial condition, and results of operations
41% rewrittenRisks Related to Our Financial Condition and Liquidity
There are risks related to our ability to utilize net operating loss carryforwards as well as research and development tax credit carryforwards to offset future taxable income or tax liabilities
Updated federal and state net operating loss figures to $248.0 million as of December 31, 2025.
40% rewrittenRisks Related to Our Industry and Products
We use AI and machine learning in our development process and in our AI-based weapon detection products, which could present risks and challenges to our business
Expanded our AI risk factor to specifically include generative AI technologies in our weapons detection products.
Was: We use AI and machine learning in our development process and in our AI-based weapon detection products
38% rewrittenRisks Related to Our Business and Operations
Delays in production, increases in prices charged or the loss of a limited or sole source supplier could have an adverse effect on our business, financial condition and operating results
Added disclosure regarding our November 2025 non-exclusive contract manufacturing agreement with Plexus Corp to diversify from Columbia Tech.
36% rewrittenLegal and Regulatory Risks
Internationally, virtually every jurisdiction in which we operate, have customers or have prospective customers has established its own data security and privacy legal frameworks with which we, our reseller partners or our customers must comply
Added formal capitalization and abbreviation for the General Data Protection Regulation.
32% rewrittenRisks Related to Our Business and Operations
Increases in component costs, long lead times, supply shortages, supply changes, and tariffs could disrupt our supply chain and have an adverse effect on our business, financial condition, and operating results
Minor stylistic edit changing formatting references without altering core supply chain risk terms.
Was: Increases in component costs, long lead times, supply shortages, and supply changes could disrupt our supply chain and have an adverse effect on our business, financial condition, and operating results
31% rewrittenRisks Related to Our Human Capital
If we do not effectively expand, train, and retain qualified sales and marketing personnel, we may be unable to acquire new customers or sell additional products to successfully pursue our growth strategy
28% rewrittenRisks Related to Our Industry and Products
Our use of “open source” software could subject our proprietary software to certain disclosure obligations, expose us to security risks, and negatively affect our ability to offer our products and subject us to possible litigation
Was: Our use of “open source” software could subject our proprietary software to certain disclosure obligations, negatively affect our ability to offer our products and subject us to possible litigation
28% rewrittenRisks Related to Our Common Stock and Warrants
Our business operations are vulnerable to disruption due to natural or other disasters, including climate-related events, strikes and other events beyond our control

All 48 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Restatement and Internal Controls

01Material weaknesses in our internal control over financial reporting, which contributed to the previously disclosed restatement of our prior period financial statements expose us to significant risks and uncertaintiesNew

Risks Related to Our Business and Operations

02We have a history of losses. We have not been profitable historically and may not achieve or maintain profitability in the future
03Our operating results may fluctuate for a variety of reasons, including our failure to close large volume opportunity customer sales
04In addition to our direct sales force, we rely on our reseller partners to sell our products. We expect to continue to focus on generating sales to new and existing customers through our reseller partners as a part of our growth strategy, who may not be successful in marketing, selling, and supporting our products
05Increases in component costs, long lead times, supply shortages, supply changes, and tariffs could disrupt our supply chain and have an adverse effect on our business, financial condition, and operating results32% rewritten
06Delays in production, increases in prices charged or the loss of a limited or sole source supplier could have an adverse effect on our business, financial condition and operating results38% rewritten
07Defects and poor quality which require rework, replacement parts or systems and associated costs of service could have an adverse effect on our business and results of operationsNew
08We recognize a substantial portion of our revenue ratably over the term of our agreements with customers and, as a result, downturns or upturns in sales may not be immediately reflected in our operating results
09If we are unable to compete effectively with new entrants and other potential competitors, our sales and profitability could be adversely affected
10A portion of our revenue is generated by sales to government entities and such sales are subject to a number of challenges and risks
11We could lose customers and revenue if there are changes in the spending policies or budget priorities for government funding of colleges, universities, K-12 schools and other education providers
12We may acquire or invest in other companies or technologies in the future, which could divert management’s attention, fail to meet our expectations, result in additional dilution to our stockholders, increase expenses, disrupt our operations or otherwise harm our operating results

Risks Related to Our Industry and Products

13If our products fail or are perceived to fail to detect threats such as a firearm or other potential weapon or explosive device, or if our products contain undetected errors or defects, this could have an adverse effect on our business and results of operations
14If our customers are unable to implement our products successfully, or if we fail to effectively assist our customers in installing our products and provide effective ongoing support and training, customer perceptions of our products may be impaired, or our reputation and brand may suffer
15We face the risk of losing recurring revenue and forecasting certainty if customers choose not to renew their typical four‑year subscriptions or if renewal terms result in lower revenue than expiring agreements, and significant losses if returned systems cannot be profitably redeployedNew
16have limited historical experience managing renewals at the current and growing scale of our customer base. Increased churn or lower renewal rates could adversely affect our recurring revenue, forecasting certainty, and overall financial performance, with impacts that may become more pronounced in future periodsNew
17The loss of designation of our Evolv Express system as a Qualified Anti-Terrorism Technology under the Homeland Security SAFETY Act could result in adverse reputational and financial consequences
18The AI-based weapons detection for security screening market is new and evolving and may not grow as expected or may develop more slowly or differently than we expect
19We use AI and machine learning in our development process and in our AI-based weapon detection products, which could present risks and challenges to our business40% rewritten
20Our expansion into international markets exposes us to additional operational, regulatory, and compliance risks that could adversely affect our businessNew
21Our growth potential outside the U.S. may be limited or vary due to differences in security threats, customer perceptions, regulatory environments, and international market dynamics, as well as our own expansion and investment prioritiesNew
22If we do not successfully anticipate market needs and enhance our existing products or develop new products that meet those needs on a timely basis, we may not be able to compete effectively and our ability to generate revenues will suffer
23We incorporate technology and components from third parties into our products, and our inability to obtain or maintain rights to the technology could harm our business
24Our use of “open source” software could subject our proprietary software to certain disclosure obligations, expose us to security risks, and negatively affect our ability to offer our products and subject us to possible litigation28% rewritten
25Our business depends on the reliability, availability, and performance of our information technology systems, including key internal enterprise software solutions, and any failure or disruption of these systems could materially and adversely affect our businessNew
26In fact, we and our third-party vendors have experienced, and expect to continue to experience, cyber-attacks, such as through phishing scams and ransomware attempts, and such incidents could have a material adverse impact on our operations or financial condition in the futureNew

Risks Related to Our Human Capital

27If we do not effectively expand, train, and retain qualified sales and marketing personnel, we may be unable to acquire new customers or sell additional products to successfully pursue our growth strategy31% rewritten
28We are dependent on the continued services and performance of our senior management and other key employees, as well as on our ability to successfully hire, train, manage, and retain qualified personnel, especially those in sales and marketing and research and development

Risks Related to Our Intellectual Property

29Our intellectual property rights are valuable and any inability to protect our proprietary technology and intellectual property rights could substantially harm our business and operating results59% rewritten
30Third parties may in the future assert claims of infringement, misappropriation, or other violations of intellectual property rights against us. There can be no assurance that we will not be found to infringe or otherwise violate any third-party intellectual property rights or to have done so in the past
31The measures we take to protect our trade secrets may not adequately prevent disclosure of trade secrets and other proprietary information

Legal and Regulatory Risks

32We are subject to government regulation and other legal obligations, particularly related to privacy, data protection, information security, and product marketing and our actual or perceived failure to comply with such obligations could harm our business68% rewritten
33business, we are, and may increasingly become subject to various laws, regulations, and standards in the jurisdictions in which we operate, and may be subject to contractual obligations relating to data privacy and security in the jurisdictions in which we operateNew
34Internationally, virtually every jurisdiction in which we operate, have customers or have prospective customers has established its own data security and privacy legal frameworks with which we, our reseller partners or our customers must comply36% rewritten
35Failure to comply with applicable anti-corruption legislation, export controls, economic sanctions and tax laws could result in fines and criminal penalties and materially and adversely affect our business, financial condition, and results of operations42% rewritten
36We are subject to government investigations, regulatory enforcement proceedings and litigation relating to our business conduct, marketing practices, financial restatement and investigation, which could result in significant penalties, injunctive relief and harm to our businessNew

Risks Related to Our Financial Condition and Liquidity

37There are risks related to our ability to utilize net operating loss carryforwards as well as research and development tax credit carryforwards to offset future taxable income or tax liabilities41% rewritten
38depending on jurisdiction-specific rules. Additionally, as of December 31, 2025 and 2024, we had United Kingdom net operating loss carryforwards of approximately $1.4 million and $1.7 million, respectively, which do not expire under current UK tax lawNew
39We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all
40Our existing and future debt obligations may adversely affect our financial condition and future financial resultsNew
41Our Senior Secured Credit Facilities contain affirmative and negative covenants, including financial covenants, that may limit our operating flexibilityNew

Risks Related to Our Common Stock and Warrants

42The market price of our common stock and warrants has been and may continue to be highly volatile, and you may lose some or all of your investment
43may in the future become subject to similar attacks, which may lead to increased volatility in the price of our common stockNew
44Certain of our warrants are accounted for as liabilities and the changes in value of such warrants could have a material effect on our financial results
45Certain of our earn-out shares and contingently issuable founder shares are accounted for as liabilities while the contingently returnable founder shares are accounted for as assets. Changes in the fair value of such shares could have a material effect on our financial results
46Increasing attention to, and evolving expectations for, sustainability initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business
47If securities or industry analysts do not publish research or reports about us, or publish negative reports, our stock price and trading volume could decline
48Our business operations are vulnerable to disruption due to natural or other disasters, including climate-related events, strikes and other events beyond our control28% rewritten

Other Evolv Technologies Holdings 10-Ks

FY2024 10-K risk factors
49 risks
Evolv Technologies faces material weaknesses in internal controls leading to financial statement restatements and delayed SEC filings. The company has a history of net losses, totaling $54.0 million in 2024. Operations depend heavily on third-party manufacturing through Columbia Tech and reseller partner networks.
Filed Apr 28, 2025

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The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.