v3.25.4
Fair Value Measurements
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Measurements 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, 2025
Level 1Level 2Level 3Total
Assets:
Money market funds$39,406 $— $— $39,406 
Treasury bills— 19,885 — 19,885 
Contingently returnable common stock asset$— $— $4,094 $4,094 
$39,406 $19,885 $4,094 $63,385 
Liabilities:
Contingent earn-out liability$— $— $374 $374 
Contingently issuable common stock liability— — 1,809 1,809 
Public Warrant liability3,862 — — 3,862 
$3,862 $— $— $2,183 $— $6,045 
Fair Value Measurements at December 31, 2024
Level 1Level 2Level 3Total
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 liability4,297 — — 4,297 
$4,297 $— $16,810 $21,107 
Money market funds are included in cash and cash equivalents on the consolidated balance sheets. As of December 31, 2025, U.S. treasury bills with maturities greater than 3 months, which totaled $19.9 million, are reflected as marketable securities. At 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. 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, accounts payable, accrued liabilities, and other accrued expenses approximate fair value because of their short maturity.
The carrying value of the Company’s long-term debt approximates its fair value (a Level 2 measurement) at each balance sheet date due to its variable interest rate, which approximates a market interest rate.
During each of the years ended December 31, 2025 and 2024, 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 2. 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, 2025, no milestones have been achieved, and as of March 8, 2026, all contingent earn-out shares expired.
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, 2025 were as follows: 70% expected stock price volatility, a risk-free rate of return of 3.7%, a 5% likelihood of change in control, and a remaining term of 0.2 years. The assumed likelihood of change in control was reduced to 5% as of December 31, 2025 from 25% as of December 31, 2024, 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, 2023$29,119 
Change in fair value(16,310)
Balance at December 31, 2024$12,809 
Change in fair value(12,435)
Balance at December 31, 2025$374 
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 and Contingently Returnable Common Stock Asset
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 2 (“Vesting Conditions”). 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, 2025, no milestones have been achieved.
Under the Founder Shares arrangement, Founder Shares may be transferred to third parties, subject to certain conditions. The unvested shares must be returned to the Company if the specified Vesting Conditions are not met. As of December 31, 2025, a total of 729,570 unvested shares had been transferred to individual stockholders' brokerage accounts. As of December 31, 2025, the fair value of the unvested shares recorded as additional paid in capital was $3.7 million. The contractual obligation of the holders to return unvested shares upon failure to meet Vesting Conditions is accounted for as a freestanding financial asset in accordance with ASC 815. This asset is initially recognized at fair value and remeasured at each reporting period. As of December 31, 2025, the Company recognized a $4.1 million contingently returnable common stock asset, which is included in other assets in our consolidated balance sheets. Management evaluated the accounting impacts on prior periods based on the historical dates of transfers between July 2022 and June 2025, concluding that such impacts were not material to the historical financial statements, as further described in Note 1, Nature of the Business.
The fair value of the contingently issuable 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, 2025 were as follows: 65% expected stock price volatility, a risk-free rate of return of 3.6%, a 10% likelihood of change in control, and a remaining term of 0.5 years. The assumed likelihood of change in control was reduced to 10% as of December 31, 2025 from 25% as of December 31, 2024, reflecting the shortened remaining term of less than one year.
The following table provides a rollforward of the contingently issuable common shares (in thousands):
Balance at December 31, 2023$6,530 
Change in fair value(2,529)
Balance at December 31, 2024$4,001 
Change in fair value32 
Fair value adjustment for contingently returnable shares(2,224)
Balance at December 31, 2025$1,809 
The following table provides a rollforward of the contingently returnable common stock asset (in thousands):

Balance at December 31, 2024$— 
Change in fair value2,646 
Fair value adjustment for contingently returnable shares1,448 
Balance at December 31, 2025$4,094 
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, 2025, 14,324,893 Public Warrants are outstanding.
The following table provides a rollforward of the public warrant liability (in thousands):
Balance at December 31, 2023$10,889 
Change in fair value(6,592)
Balance at December 31, 2024$4,297 
Change in fair value(435)
Balance at December 31, 2025$3,862