Evolv Technologies Holdings, Inc. (EVLV) presents a deeply negative recovery posture under a liquidation lens as of March 31, 2026. MFFAIS CLV is reported at -$122.0M, LLV at -$79.2M, and OLV at -$71.0M, consistent with the balance sheet structure observed here. Total assets are $304.6M against total liabilities of $184.0M, yielding book equity of $120.7M. However, applying liquidation haircuts to the asset side erodes this quickly. Cash and equivalents of $56.1M recover at par; marketable securities of $5.0M (treasury bills) recover at par; AR of $42.7M (gross $43.3M, net $42.7M) recovers at approximately 90-95%, or ~$38-41M. Inventory of $8.3M recovers at 60%, or ~$5.0M. PP&E gross is $192.5M with accumulated depreciation of $64.6M, yielding net PP&E of $127.8M. Critically, the majority of this PP&E consists of Evolv Express systems on operating lease to customers — field-deployed security hardware with highly specialized, single-market utility. A liquidation haircut of 50-60% on this asset class yields recoverable PP&E of approximately $64-77M, but realizable market value for specialized AI-enabled security screening hardware outside the installed base is likely at the lower end or below. Intangible and software assets embedded in PP&E and capitalized software receive zero recovery. Prepaid and other current assets of $33.1M include $14.3M of estimated insurance recoveries related to a $15.0M class action settlement accrual — the recoverability of this offset is contingent on insurance claim resolution and should be discounted. Total estimated asset recovery approximates $160-175M before winding costs. Against this, face-value liabilities include: $125.9M current liabilities (including $75.3M current deferred revenue, $30.3M accrued liabilities, $17.1M AP, $3.1M current lease obligations), $58.1M non-current liabilities (including $28.7M long-term debt net of issuance costs, $17.0M non-current deferred revenue, $10.2M non-current lease obligations), totaling $184.0M. Deferred revenue of $92.4M in aggregate is a liability at face value but represents future service obligations — in liquidation, some portion may be negotiable, but under the lens it stays at face value. The MidCap $30.0M term loan (July 2025 vintage, secured by first lien on substantially all assets, Term SOFR + 5.25%, matures July 2030) does not begin principal repayment until August 2029. A $15.0M settlement accrual for class action litigation is on balance sheet; the $14.3M insurance recovery offset is in prepaid/other current assets and is uncertain. An additional $15.0M revolving facility and $30.0M delayed draw facility remain undrawn. Filing discloses ongoing SEC enforcement investigation and unremediated material weaknesses across control environment, IT general controls, and period-end reporting — these represent off-balance-sheet contingent liabilities that could increase the liability stack in a wind-down scenario. On balance, estimated liquidation recovery to equity is negative, likely in the range of -$10M to -$25M before wind-down costs, consistent with MFFAIS metrics. No material improvement versus the prior 10-K (December 31, 2025) — the new debt drawn in Q3 2025 and the pending litigation settlement are the primary structural changes since then.
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