As filed with the U.S. Securities and Exchange Commission on April 2, 2021

Registration No. 333-_____

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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Form S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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NEWHOLD INVESTMENT CORP.

(Exact name of registrant as specified in its charter)

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12141 Wickchester Ln., Suite 325
Houston, Texas 77079
(212) 653-0153
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

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Mr. Kevin Charlton
Chief Executive Officer
12141 Wickchester Ln., Suite 325
Houston, Texas 77079
(212) 653-0153
(Name, address, including zip code, and telephone number, including area code, of agent for service)

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Copies to:

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Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement and the satisfaction or waiver of all other conditions under the Merger Agreement described herein.

If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box: £

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: £

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b–2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. £

If applicable, place an X in the box to designate the appropriate rule provision relied upon in conducting this transaction:

CALCULATION OF REGISTRATION FEE

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(1)      Based on the maximum number of shares of common stock, $0.0001 par value per share (“Common Stock”), of the registrant issuable upon a business combination (the “Business Combination”) involving NewHold Investment Corp. (“NHIC”) and Evolv Technologies, Inc. (“Evolv”). This number is based on the 125,000,000 shares of Common Stock issuable as consideration in connection with the Business Combination to holders of common stock of Evolv and securities convertible into common stock plus the maximum additional earn-out shares of 15,000,000 that may be paid in certain circumstances in accordance with the terms of the Agreement and Plan of Merger, dated March 5, 2021. Pursuant to Rule 416(a) of the Securities Act of 1933, as amended (the “Securities Act”), there are also being registered an indeterminable number of additional securities as may be issued to prevent dilution resulting from share sub-divisions, share dividends or similar transactions.

(2)      Estimated solely for purposes of calculating the registration fee in accordance with Rule 457(f)(2) of the Securities Act of 1933, as amended (the “Securities Act”). Evolv is a private company, no market exists for its securities, and Evolv has an accumulated deficit. Therefore, the proposed maximum aggregate offering price is one-third of the aggregate par value of the Evolv securities expected to be exchanged in the Business Combination, including Evolv securities issuable upon the exercise of options.

(3)      Calculated pursuant to Rule 457 of the Securities Act by calculating the product of (i) the proposed maximum aggregate offering price and (ii) 0.0001091.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

SUBJECT TO COMPLETION, DATED APRIL 2, 2021

PROPOSED MERGER

YOUR VOTE IS VERY IMPORTANT

Dear Stockholders:

You are cordially invited to attend the special meeting of the stockholders (the “Meeting”) of NewHold Investment Corp. (“NHIC”), which will be held at [•] a.m., Eastern time, on [•], 2021. Due to the continuing public health concerns relating to the coronavirus pandemic, related governmental actions closing non-essential businesses and encouraging individuals to stay home, and our concerns about protecting the health and well-being of our stockholders and employees, the Board of Directors has determined to convene and conduct the Meeting in a virtual meeting format at [•]. Stockholders will NOT be able to attend the Meeting in-person. This proxy statement/prospectus includes instruction on how to access the virtual Meeting and how to listen, vote, and submit questions from home or any remote location with Internet connectivity.

NHIC is a Delaware blank check company established for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business transaction with one or more businesses or entities, which we refer to as a “target business.” Holders of NHIC’s common stock, which refers to NHIC’s Class A common stock and our Class B common stock, collectively, will be asked to approve, among other things, the agreement and plan of merger, dated as of March 5, 2021 (the “Merger Agreement”), by and among NHIC, NHIC Sub Inc., a Delaware corporation and wholly-owned subsidiary of NHIC (“Merger Sub”) and Evolv Technologies, Inc., dba Evolv Technology, Inc., a Delaware corporation (“Evolv”), and the other related proposals.

Upon the closing of the transactions contemplated in the Merger Agreement, Merger Sub will merge with and into Evolv (the “Merger”) with Evolv surviving the Merger as a wholly owned subsidiary of NHIC. In addition, in connection with the consummation of the Merger, NHIC will be renamed “Evolv Technologies Holdings, Inc.” The transactions contemplated under the Merger Agreement relating to the Merger are referred to in this proxy statement/prospectus as the “Business Combination” and the combined company after the Business Combination is referred to in this proxy statement/prospectus as the “Combined Company.”

As of [•], 2021, there was approximately $[•] in NHIC’s trust account (the “Trust Account”). On [•], 2021, the record date for the Meeting of stockholders, the last sale price of the common stock was $[•].

Each stockholder’s vote is very important. Whether or not you plan to participate in the virtual Meeting, please submit your proxy card without delay. Stockholders may revoke proxies at any time before they are voted at the meeting. Voting by proxy will not prevent a stockholder from voting virtually at the Meeting if such stockholder subsequently chooses to participate in the Meeting.

We encourage you to read this proxy statement/prospectus carefully. In particular, you should review the matters discussed under the caption “Risk Factors” beginning on page 23.

NHIC’s board of directors unanimously recommends that NHIC stockholders vote “FOR” approval of each of the proposals.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in the Business Combination or otherwise, or passed upon the adequacy or accuracy of this proxy statement. Any representation to the contrary is a criminal offense.

HOW TO OBTAIN ADDITIONAL INFORMATION

This proxy statement/prospectus incorporates important business and financial information about NHIC that is not included or delivered herewith. If you would like to receive additional information or if you want additional copies of this document, agreements contained in the appendices or any other documents filed by NHIC with the Securities and Exchange Commission, such information is available without charge upon written or oral request. Please contact our proxy solicitor:

[NAME OF PROXY SOLICITOR]
[ADDRESS AND CONTACT INFORMATION]

If you would like to request documents, please do so no later than [•], to receive them before the Meeting. Please be sure to include your complete name and address in your request. Please see “Where You Can Find Additional Information” to find out where you can find more information about NHIC and Evolv. You should rely only on the information contained in this proxy statement/prospectus in deciding how to vote on the Business Combination. Neither NHIC nor Evolv has authorized anyone to give any information or to make any representations other than those contained in this proxy statement. Do not rely upon any information or representations made outside of this proxy statement. The information contained in this proxy statement/prospectus may change after the date of this proxy statement. Do not assume after the date of this proxy statement/prospectus that the information contained in this proxy statement/prospectus is still correct.

NEWHOLD INVESTMENT CORP.
12141 Wickchester Ln., Suite 325
Houston, Texas 77079
Telephone: (212) 653-0153

NOTICE OF SPECIAL MEETING OF
NEWHOLD INVESTMENT CORP. STOCKHOLDERS
To Be Held on [•]

To NewHold Investment Corp. Stockholders:

NOTICE IS HEREBY GIVEN, that you are cordially invited to attend a meeting of the stockholders of NewHold Investment Corp. (“NHIC,” “we”, “our”, or “us”), which will be held at [•] a.m., Eastern time, on [•], 2021, at [•] (the “Meeting”). In light of COVID-19 we will hold the Meeting virtually. You can participate in the virtual Meeting as described in “The Meeting.”

During the Meeting, NHIC’s stockholders will be asked to consider and vote upon the following proposals, which we refer to herein as the “Proposals”:

•        To consider and vote upon a proposal to approve the transactions contemplated under the Merger Agreement, dated as of March 5, 2021 (the “Merger Agreement”), by and among NHIC, NHIC Sub Inc., a Delaware corporation and wholly-owned subsidiary of NHIC (“Merger Sub”) and Evolv Technologies, Inc., a Delaware corporation (“Evolv”), (the “Business Combination”), a copy of which is attached to this proxy statement/prospectus as Annex A. This proposal is referred to as the “Business Combination Proposal” or “Proposal 1.”

•        To consider and vote upon a proposal to approve the Amended and Restated Certificate of Incorporation of NHIC, a copy of which is attached to this proxy statement/prospectus as Annex B (the “Amended Charter”) to, among other things, change NHIC’s name to “Evolv Technologies Holdings, Inc.,” and amend certain provisions related to authorized capital stock, the required vote to amend the charter and bylaws, and director removal, to be effective upon the consummation of the Business Combination. This proposal is referred to as the “Charter Approval Proposal” or “Proposal 2.”

•        To consider and vote upon a proposal to approve the Evolv Technologies, Inc. 2021 Incentive Award Plan (the “Incentive Award Plan”, a copy of which is to be attached to this proxy statement/prospectus as Annex C, to be effective upon the consummation of the Business Combination. This proposal is referred to as the “Stock Plan Proposal” or “Proposal 3.”

•        To consider and vote upon a proposal to approve: (i) for purposes of complying with Nasdaq Listing Rule 5635 (a) and (b), the issuance of more than 20% of the issued and outstanding shares of NHIC common stock and the resulting change in control in connection with the Merger, and (ii) for purposes of complying with Nasdaq Listing Rule 5635(d), the issuance of more than 20% of the common stock in connection with the PIPE Investment upon the consummation of the Business Combination. This proposal is referred to as the “Nasdaq Proposal” or “Proposal 4.”

•        To consider and vote upon a proposal to approve the adjournment of the Meeting by the chairman thereof to a later date, if necessary, under certain circumstances, including for the purpose of soliciting additional proxies in favor of the foregoing Proposals, in the event NHIC does not receive the requisite stockholder vote to approve the Proposals. This proposal is called the “Adjournment Proposal” or “Proposal 5.”

The Business Combination Proposal is conditioned upon the approval of Proposal 2 and Proposal 4. Proposals 2, 3, 4 and 5 are dependent upon approval of the Business Combination Proposal. It is important for you to note that in the event that the Business Combination Proposal is not approved, NHIC will not consummate the Business Combination. If NHIC does not consummate the Business Combination and fails to complete an initial business combination by August 4, 2022, NHIC will be required to dissolve and liquidate, unless we seek stockholder approval to amend our Certificate of Incorporation to extend the date by which the Business Combination may be consummated.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement/prospectus contains forward-looking statements, including statements about the parties’ ability to close the Business Combination, the anticipated benefits of the Business Combination, and the financial condition, results of operations, earnings outlook and prospects of NHIC and/or Evolv and may include statements for the period following the consummation of the Business Combination. Forward-looking statements appear in a number of places in this proxy statement/prospectus including, without limitation, in the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Evolv” and “Business of Evolv.” In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of NHIC and Evolv as applicable and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in “Risk Factors,” those discussed and identified in public filings made with the SEC by NHIC and the following:

•        expectations regarding Evolv’s strategies and future financial performance, including its future business plans or objectives, prospective performance and opportunities and competitors, revenues, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and Evolv’s ability to invest in growth initiatives and pursue acquisition opportunities;

•        the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement;

•        the outcome of any legal proceedings that may be instituted against NHIC or Evolv following announcement of the Merger Agreement and the transactions contemplated therein;

•        the inability to complete the Business Combination due to, among other things, the failure to obtain NHIC stockholder approval;

•        the risk that the announcement and consummation of the proposed Business Combination disrupts Evolv’s current plans;

•        the ability to recognize the anticipated benefits of the Business Combination;

•        unexpected costs related to the proposed Business Combination;

•        the amount of any redemptions by existing holders of common stock being greater than expected;

•        limited liquidity and trading of NHIC’s securities;

•        geopolitical risk and changes in applicable laws or regulations;

•        the possibility that NHIC and/or Evolv may be adversely affected by other economic, business, and/or competitive factors

•        operational risk;

•        risk that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic may have an adverse effect on our business operations, as well as our financial condition and results of operations;

•        litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on Evolv’s resources; and

•        the risks that the consummation of the Business Combination is substantially delayed or does not occur.

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of NHIC and Evolv prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the Business Combination or other matters addressed in this proxy statement/prospectus and attributable to NHIC, Evolv or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this proxy statement. Except to the extent required by applicable law or regulation, NHIC and Evolv undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events.

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS

The following are answers to some questions that you, as a stockholder of NHIC, may have regarding the Proposals being considered at the Meeting. We urge you to read carefully the remainder of this proxy statement/prospectus because the information in this section does not provide all the information that might be important to you with respect to the Proposals and the other matters being considered at the Meeting. Additional important information is also contained in the annexes to and the documents incorporated by reference into this proxy statement.

Q:     What is the purpose of this document?

A:     NHIC, Merger Sub, Evolv, and the stockholders of Evolv (the “Sellers”), have agreed to the Business Combination under the terms of the Merger Agreement, which is attached to this proxy statement/prospectus as Annex A, and is incorporated into this proxy statement/prospectus by reference. The Board is soliciting your proxy to vote for the Business Combination and other Proposals at the Meeting because you owned common stock at the close of business on [•], 2021, the “Record Date” for the Meeting, and are therefore entitled to vote at the Meeting. This proxy statement/prospectus summarizes the information that you need to know in order to cast your vote.

Q:     What is being voted on?

A:     Below are the proposals that the NHIC stockholders are being asked to vote on:

•        Proposal 1 — The Business Combination Proposal to approve the Merger Agreement and the Business Combination.

•        Proposal 2 — The Charter Approval Proposal to approve the Combined Company’s Amended and Restated Certificate of Incorporation attached to this proxy statement/prospectus as Annex B.

•        Proposal 3 — The Proposal to approve the Incentive Award Plan.

•        Proposal 4 — The Nasdaq Proposal to approve the issuance of more than 20% of the issued and outstanding shares of common stock in connection with (i) the terms of the Merger Agreement, which will result in a change of control, as required by Nasdaq Listing Rule 5635(a)and (b), and (ii) the terms of the PIPE Investment, as required by Nasdaq Listing Rule 5635(d).

•        Proposal 5 — The Adjournment Proposal to approve the adjournment of the Meeting.

Q:     What vote is required to approve the Proposals?

A:     Proposal 1 — The Business Combination Proposal requires the affirmative vote of the majority of the issued and outstanding shares of common stock present by virtual attendance or represented by proxy and entitled to vote at the Meeting. An abstention will have the effect of a vote “AGAINST” Proposal 1. Broker non-votes will have no effect on the vote for Proposal 1.

Proposal 2 — The Charter Approval Proposal requires the affirmative vote of the majority of the issued and outstanding shares of common stock. Abstentions and broker non-votes will have the effect of a vote “AGAINST” Proposal 2.

Proposal 3 — The Stock Plan Proposal requires the affirmative vote of the majority of the issued and outstanding shares of common stock present in person by virtual attendance or represented by proxy and entitled to vote. Abstentions will have the effect of a vote “AGAINST” Proposal No. 3. Broker non-votes will have no effect on the vote for Proposal No. 3.

Proposal 4 — The Nasdaq Proposal requires the affirmative vote of the majority of the issued and outstanding shares of common stock present by virtual attendance or represented by proxy and entitled to vote at the Meeting. Abstentions will have the effect of a vote “AGAINST” Proposal 4. Broker non-votes will have no effect on the vote for Proposal No. 4.

Proposal 5 — The Adjournment Proposal requires the affirmative vote of the majority of the issued and outstanding shares of common stock present in person by virtual attendance or represented by proxy and entitled to vote at the Meeting. Abstentions will have the effect of a vote “AGAINST” Proposal No. 5. Broker-non votes have no effect on the vote for Proposal No. 5.

Q:     Are any of the proposals conditioned on one another?

A:     The Business Combination Proposal is conditioned upon the approval of Proposal 2 and Proposal 4. Proposals 2, 3, 4 and 5 are dependent upon approval of the Business Combination Proposal. It is important for you to note that in the event that the Business Combination Proposal is not approved, NHIC will not consummate the Business Combination. If NHIC does not consummate the Business Combination and fails to complete an initial business combination by August 4, 2022, NHIC will be required to dissolve and liquidate, unless we seek stockholder approval to amend our Certificate of Incorporation to extend the date by which the Business Combination may be consummated.

Q:     How will the Initial Stockholders vote?

A:     Pursuant to a letter agreement, the Initial Stockholders, who as of [•], 2021 owned [•] shares of common stock, or approximately [•]% of the outstanding shares of common stock, agreed to vote their respective shares of common stock acquired by them prior to the IPO and any shares of common stock purchased by them in the open market in or after the IPO in favor of the Business Combination Proposal and related proposals (“Letter Agreement”). The Initial Stockholders have also agreed that they will vote any shares they purchase in the open market in or after the IPO in favor of each of the Proposals.

Q:     How many votes do I and others have?

A:     You are entitled to one vote for each share of NHIC’s common stock that you held as of the Record Date. As of the close of business on the Record Date, there were [•] outstanding shares of common stock.

Q:     What is the consideration being paid to Evolv security holders?

A:     Preferred Stock.    Immediately prior to the Effective Time and subject to the consent of the holders of Evolv’s preferred stock, par value $0.001 per share (, the “Evolv Preferred Stock”), each issued and outstanding share of Evolv Preferred Stock shall be converted into shares of the common stock, par value $0.001 per share, of Evolv (the “Evolv common stock”) at the then-applicable conversion rates.

Convertible Notes.    Immediately prior to the Effective Time, each issued and outstanding convertible promissory note of Evolv (the “Evolv Convertible Notes”) will be automatically converted into shares of Evolv common stock in accordance with the then-applicable conversion rates.

Warrants.    With the exception of a warrant to purchase 6,756,653 shares of Evolv common stock (the “Finback Warrant”), immediately prior to the Effective Time, Evolv shall cause each outstanding warrant to purchase shares of Evolv capital stock to be exercised in full on a cash or cashless basis or terminated without exercise. With respect to the Finback Warrant, the portion that is vested immediately prior to the Effective Time shall be either exercised in full on a cash or cashless basis or terminated as of the Effective Time, while the portion that is unvested as of immediately prior to the Effective Time shall be automatically converted into a warrant to purchase shares of the NewHold Class A common stock, proportionately adjusted for the Exchange Ratio (as defined below).

Common Stock.    At the Effective Time, each share of Evolv common stock (including shares outstanding as a result of the conversion of the Evolv Preferred Stock, the Evolv Convertible Notes and the Evolv Warrants but excluding shares the holders of which perfect rights of appraisal under Delaware law) will be converted into the right to receive such number of shares of NewHold common stock equal to the Exchange Ratio and a number of Earn-Out Shares (as defined below). The Exchange Ratio is defined in the Merger Agreement to be 125,000,000 divided by the number of outstanding shares of Evolv common stock and options to purchase shares of Evolv common stock as of immediately prior to the Effective Time, after giving effect to the conversion of the Evolv Preferred Stock, Evolv Convertible Notes and Evolv Warrants and as further adjusted pursuant to the Merger Agreement.

Stock Options.    At the Effective Time, each outstanding option to purchase shares of Evolv common stock shall be converted into an option to purchase shares of NewHold common stock equal to the number of shares subject to such option prior to the Effective Time multiplied by the Exchange Ratio, with the per share exercise price equal to the exercise price prior to the Effective Time divided by the Exchange Ratio.

Q:     Do any of NHIC’s directors or officers have interests that may conflict with my interests with respect to the Business Combination?

A:     In considering the recommendation of the Board to approve the Merger Agreement, NHIC stockholders should be aware that certain NHIC executive officers and directors may be deemed to have interests in the Business Combination that are different from, or in addition to, those of NHIC stockholders generally. These interests, which may create actual or potential conflicts of interest, are, to the extent material, described in the section entitled “Interests of Directors and Executive Officers of NHIC in the Business Combination” beginning on page 138.

Q:     When and where is the Meeting?

A:     The Meeting will take place at [•], on [•], 2021, at [•] a.m.

Q:     Who may vote at the Meeting?

A:     Only holders of record of NewHold common stock as of the close of business on [•] may vote at the Meeting of stockholders. As of [•], there were [•] shares of common stock outstanding and entitled to vote. Please see “The Meeting of NHIC Stockholders — Record Date; Who is Entitled to Vote” for further information.

Q:     What is the quorum requirement for the Meeting?

A:     Stockholders representing a majority of the shares of common stock issued and outstanding as of the Record Date and entitled to vote at the Meeting must be present in person by virtual attendance or represented by proxy in order to hold the Meeting and conduct business. This is called a quorum. Shares of our common stock will be counted for purposes of determining if there is a quorum if the stockholder (i) is present and entitled to vote at the meeting, or (ii) has properly submitted a proxy card or voting instructions through a broker, bank or custodian. In the absence of a quorum, stockholders representing a majority of the votes present in person or represented by proxy at such meeting may adjourn the meeting until a quorum is present.

Q:     Am I required to vote against the Business Combination Proposal in order to have my public shares redeemed?

A:     No. You are not required to vote against the Business Combination Proposal in order to have the right to demand that NHIC redeem your public shares for cash equal to your pro rata share of the aggregate amount then on deposit in the Trust Account (before payment of deferred underwriting commissions and including interest earned on their pro rata portion of the Trust Account, net of taxes payable). These rights to demand redemption of public shares for cash are sometimes referred to herein as “redemption rights”. If the Business Combination is not completed, holders of public shares electing to exercise their redemption rights will not be entitled to receive such payments and their shares of common stock will be returned to them.

Q:     How do I exercise my redemption rights?

A:     If you are a public stockholder and you seek to have your public shares redeemed, you must (i) demand, no later than [•] p.m., Eastern time on [•], 2021 (at least two business days before the Meeting), that NHIC redeem your shares into cash; and (ii) submit your request in writing to Continental, at the address listed at the end of this section and deliver your shares to Continental physically or electronically using The Depository Trust Company’s (“DTC”) DWAC (Deposit/Withdrawal at Custodian) System at least two business days before the Meeting.

Any corrected or changed written demand of redemption rights must be received by Continental two business days before the Meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to Continental at least two business days before the Meeting.

NHIC stockholders may seek to have their public shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of common stock as of the Record Date. Any public stockholder who holds shares of common stock on or before [•], 2021 (two business days before the Meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid, at the consummation of the Business Combination.

The actual per share redemption price will be equal to the aggregate amount then on deposit in the Trust Account (before payment of deferred underwriting commissions and including interest earned on their pro rata portion of the Trust Account, net of taxes payable), divided by the number of shares of common stock underlying the NHIC Units sold in the IPO. Please see the section titled “The Meeting of NHIC Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your shares of common stock for cash.

Q:     How can I vote?

A:     If you are a stockholder of record, you may vote online at the virtual Meeting or vote by proxy using the enclosed proxy card, the Internet or telephone. Whether or not you plan to participate in the Meeting, we urge you to vote by proxy to ensure your vote is counted. Even if you have already voted by proxy, you may still attend the virtual Meeting and vote online, if you choose.

To vote online at the virtual Meeting, follow the instructions below under “How may I participate in the virtual Meeting?”

To vote using the proxy card, please complete, sign and date the proxy card and return it in the prepaid envelope. If you return your signed proxy card before the Meeting, we will vote your shares as you direct.

To vote via the telephone, you can vote by calling the telephone number on your proxy card. Please have your proxy card handy when you call. Easy-to-follow voice prompts will allow you to vote your shares and confirm that your instructions have been properly recorded.

To vote via the Internet, please go to [•] and follow the instructions. Please have your proxy card handy when you go to the website. As with telephone voting, you can confirm that your instructions have been properly recorded.

Telephone and Internet voting facilities for stockholders of record will be available 24 hours a day until 11:59 p.m. Eastern Time on [•], 2021. After that, telephone and Internet voting will be closed, and if you want to vote your shares, you will either need to ensure that your proxy card is received before the date of the Meeting or attend the virtual Meeting to vote your shares online.

If your shares are registered in the name of your broker, bank or other agent, you are the “beneficial owner” of those shares and those shares are considered as held in “street name.” If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than directly from us. Simply complete and mail the proxy card to ensure that your vote is counted. You may be eligible to vote your shares electronically over the Internet or by telephone. A large number of banks and brokerage firms offer Internet and telephone voting. If your bank or brokerage firm does not offer Internet or telephone voting information, please complete and return your proxy card in the self-addressed, postage-paid envelope provided.

If you plan to vote at the virtual Meeting, you will need to contact Continental at the phone number or email below to receive a control number and you must obtain a legal proxy from your broker, bank or other nominee reflecting the number of shares of common stock you held as of the Record Date, your name and email address. You must contact Continental for specific instructions on how to receive the control number. Please allow up to 48 hours prior to the meeting for processing your control number.

After obtaining a valid legal proxy from your broker, bank or other agent, to then register to attend the Meeting, you must submit proof of your legal proxy reflecting the number of your shares along with your name and email address to Continental. Requests for registration should be directed to 917-262-2373 or email proxy@continentalstock.com. Requests for registration must be received no later than [•] p.m., Eastern Time, on [•], 2021.

You will receive a confirmation of your registration by email after we receive your registration materials. We encourage you to access the Meeting prior to the start time leaving ample time for the check in.

Q:     How may I participate in the virtual Meeting?

A.     If you are a stockholder of record as of the Record Date for the Meeting, you should receive a proxy card from Continental, containing instructions on how to attend the virtual Meeting including the URL address, along with your control number. You will need your control number for access. If you do not have your control number, contact Continental at 917-___-_____ or email proxy@continentalstock.com.

You can pre-register to attend the virtual Meeting starting on [•], 2021. Go to http://www.cstproxy.com/xxxxxxxx2021, enter the control number found on your proxy card you previously received, as well as your name and email address. Once you pre-register you can vote [or enter questions in the chat box]. At the start of the Meeting you will need to re-log into http://www.cstproxy.com/xxxxxxxx2021 using your control number.

If your shares are held in street name, and you would like to join and not vote, Continental will issue you a guest control number. Either way, you must contact Continental for specific instructions on how to receive the control number. Please allow up to [48] hours prior to the meeting for processing your control number.

Q:     Who can help answer any other questions I might have about the virtual Meeting?

A.     If you have any questions concerning the virtual Meeting (including accessing the meeting by virtual means) or need help voting your shares of the NHIC’s common stock, please contact Continental at 917-262-2373 or email proxy@continentalstock.com.

The Notice of Special Meeting, proxy statement/prospectus and form of Proxy Card are available at: [•].

Q:     If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

A:     No. If you are a beneficial owner and you do not provide voting instructions to your broker, bank or other holder of record holding shares for you, your shares will not be voted with respect to any Proposal for which your broker does not have discretionary authority to vote. If a proposal is determined to be discretionary, your broker, bank or other holder of record is permitted to vote on the proposal without receiving voting instructions from you. If a proposal is determined to be non-discretionary, your broker, bank or other holder of record is not permitted to vote on the proposal without receiving voting instructions from you. A “broker non-vote” occurs when a bank, broker or other holder of record holding shares for a beneficial owner does not vote on a non-discretionary proposal because the holder of record has not received voting instructions from the beneficial owner.

Each of the Proposals to be presented at the Meeting is a non-discretionary proposal. Accordingly, if you are a beneficial owner and you do not provide voting instructions to your broker, bank or other holder of record holding shares for you, your shares will not be voted with respect to any of the Proposals. A broker non-vote would have the same effect as a vote against the Business Combination Proposal, and the Adjournment proposal.

Q:     What if I abstain from voting or fail to instruct my bank, brokerage firm or nominee?

A:     NHIC will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for the purposes of determining whether a quorum is present at the Meeting. For purposes of approval, an abstention on any Proposals will have the same effect as a vote “AGAINST” such Proposal.

Q:     How can I submit a proxy?

A.     You may submit a proxy by (a) visiting [•] and following the on screen instructions (have your proxy card available when you access the webpage), or (b) calling toll-free [•] in the U.S. or [•] from foreign countries from any touch-tone phone and follow the instructions (have your proxy card available when you call), or (c) submitting your proxy card by mail by using the previously provided self-addressed, stamped envelope.

Q:     Can I change my vote after I have mailed my proxy card?

A:     Yes. You may change your vote at any time before your proxy is voted at the Meeting. You may revoke your proxy by executing and returning a proxy card dated later than the previous one, or by attending the virtual Meeting in person and casting your vote or by voting again by the telephone or Internet voting options

described below, or by submitting a written revocation stating that you would like to revoke your proxy that our proxy solicitor receives prior to the Meeting. If you hold your shares of common stock through a bank, brokerage firm or nominee, you should follow the instructions of your bank, brokerage firm or nominee regarding the revocation of proxies. If you are a record holder, you should send any notice of revocation or your completed new proxy card, as the case may be, to:

[PROXY SOLICITOR’S NAME AND CONTACTS]

Unless revoked, a proxy will be voted at the virtual Meeting in accordance with the stockholder’s indicated instructions. In the absence of instructions, proxies will be voted FOR each of the Proposals.

Q:     What will happen if I return my proxy card without indicating how to vote?

A:     If you sign and return your proxy card without indicating how to vote on any particular Proposal, the shares of common stock represented by your proxy will be voted in favor of each Proposal. Proxy cards that are returned without a signature will not be counted as present at the Meeting and cannot be voted.

Q:     Should I send in my share certificates now to have my shares of common stock redeemed?

A:     NHIC stockholders who intend to have their public shares redeemed should send their certificates to Continental at least two business days before the Meeting. Please see “The Meeting of NHIC Stockholders — Redemption Rights” for the procedures to be followed if you wish to redeem your public shares for cash.

Q:     Who will solicit the proxies and pay the cost of soliciting proxies for the Meeting?

A:     NHIC will pay the cost of soliciting proxies for the Meeting. NHIC has engaged [PROXY SOLICITOR’S NAME] to assist in the solicitation of proxies for the Meeting. NHIC has agreed to pay [PROXY SOLICITOR’S NAME] a fee of $[•], plus disbursements, and will reimburse [PROXY SOLICITOR’S NAME] for its reasonable out-of-pocket expenses and indemnify [PROXY SOLICITOR’S NAME] and its affiliates against certain claims, liabilities, losses, damages, and expenses. NHIC will also reimburse banks, brokers and other custodians, nominees and fiduciaries representing beneficial owners of common stock for their expenses in forwarding soliciting materials to beneficial owners of the common stock and in obtaining voting instructions from those owners. Our directors, officers and employees may also solicit proxies by telephone, by facsimile, by mail, on the Internet or in person. They will not be paid any additional amounts for soliciting proxies.

Q:     What happens if I sell my shares before the Meeting?

A:     The Record Date for the Meeting is earlier than the date of the Meeting, as well as the date that the Business Combination is expected to be consummated. If you transfer your shares of common stock after the Record Date, but before the Meeting, unless the transferee obtains from you a proxy to vote those shares, you would retain your right to vote at the Meeting, but will transfer ownership of the shares and will not hold an interest in NHIC after the Business Combination is consummated.

Q:     When is the Business Combination expected to occur?

A:     Assuming the requisite regulatory and stockholder approvals are received, NHIC expects that the Business Combination will occur as soon as possible following the Meeting.

Q:     Are Evolv’s stockholders required to approve the Business Combination?

A:     Yes. The Evolv stockholders have already approved the Business Combination.

Q:     Are there risks associated with the Business Combination that I should consider in deciding how to vote?

A:     Yes. There are a number of risks related to the Business Combination and other transactions contemplated by the Merger Agreement, that are discussed in this proxy statement. Please read with particular care the detailed description of the risks described in “Risk Factors” beginning on page 23 of this proxy statement.

Q:     May I seek statutory appraisal rights or dissenter rights with respect to my shares?

A:     No. Appraisal rights are not available to holders of shares of common stock in connection with the proposed Business Combination. For additional information, see the section titled “The Meeting of NHIC Stockholders — Appraisal Rights.”

Q:     What happens if the Business Combination is not consummated?

A:     If NHIC does not consummate the Business Combination by August 4, 2022, then pursuant to Article IX of its current Amended and Restated Certificate of Incorporation, NHIC’s officers must take all actions necessary in accordance with the Delaware General Corporation Law to dissolve and liquidate NHIC as soon as reasonably practicable. Following dissolution, NHIC will no longer exist as a company. In any liquidation, the funds held in the Trust Account, plus any interest earned thereon (net of taxes payable), together with any remaining out-of-trust net assets, will be distributed pro-rata to holders of shares of common stock who acquired such shares in the IPO or in the aftermarket. The estimated consideration that each share of common stock would be paid at liquidation would be approximately $[•] per share for stockholders based on amounts on deposit in the Trust Account as of [•], 2021. The closing price of our common stock on the Nasdaq Stock Market as of [•], 2021 was $[•]. The Initial Stockholders waived the right to any liquidation distribution with respect to any shares of common stock held by them.

Q:     What happens to the funds deposited in the Trust Account following the Business Combination?

A:     Following the closing of the Business Combination, holders of pubic shares of NHIC exercising redemption rights will receive their per share redemption price out of the funds in the Trust Account. The balance of the funds will be released to Evolv to fund working capital needs of the Combined Company. As of [•], 2021, there was approximately $[•] in the Trust Account. NHIC estimates that approximately $[•] per outstanding share issued in the NHIC IPO will be paid to the investors exercising their redemption rights.

Q:     Who will manage the Combined Company after the Business Combination?

A:     As a condition to the closing of the Business Combination, all of the officers and directors of NHIC will resign, other than Messrs.__________, who will serve as directors of the Combined Company, subject to certain closing conditions. For information on the anticipated management of the Combined Company, see the section titled “Directors and Executive Officers of the Combined Company after the Business Combination” in this proxy statement.

Q:     Who can help answer my questions?

A:     If you have questions about the Proposals or if you need additional copies of this proxy statement/prospectus or the enclosed proxy card, you should contact NHIC’s proxy solicitor at:

[PROXY SOLICITOR’S NAME AND CONTACTS]

You may also obtain additional information about NHIC from documents filed with the SEC by following the instructions in the section titled “Where You Can Find More Information.”

The AI-based touchless security screening market is new and evolving, and may not grow as expected or may develop more slowly or differently than Evolv expects. If the market does not grow as it expects, or if Evolv cannot expand its solutions to meet the demands of this market, its revenue may decline, fail to grow or fail to grow at an accelerated rate, and it may incur operating losses.

Evolv believes its future success will depend in large part on the growth, if any, in the market for AI-based touchless security screening solutions. This market is new and evolving, and as such, it is difficult to predict important market trends, including its potential growth, if any. To date, enterprise and corporate security budgets have allocated a majority of dollars to conventional security solutions, such as walk-through metal detectors. Organizations that use these security products may be satisfied with them or slow to adapt to technical advances and, as a result, these organizations may not adopt its solutions in addition to, or in lieu of, security products they currently use.

Further, sophisticated attackers are skilled at adapting to new technologies and developing new methods of breaching organizations’ security systems, and changes in the nature of security threats could result in a shift in budgets away from products such as theirs. In addition, while recent high visibility attacks at publicly and privately-owned venues have increased market awareness of mass shootings, terrorist or other attacks, if such attacks were to decline, or enterprises or governments perceived that the general level of attacks has declined, its ability to attract new customers and expand its sales to existing customers could be materially and adversely affected. If products such as theirs are not viewed by organizations as necessary, or if customers do not recognize the benefit of its products as a critical element of an effective security strategy, its revenue may not grow as quickly as expected, or may decline, and the trading price of the Combined Company’s stock could suffer.

In addition, it is difficult to predict customer adoption and retention rates, customer demand for its products, the size and growth rate of the market for AI-based touchless security screening, the entry of competitive products or the success of existing competitive products. Any expansion in its market depends on a number of factors, including the cost, performance and perceived value associated with its products and those of its competitors. If these products do not achieve widespread adoption or there is a reduction in demand for products in its market caused by a lack of customer acceptance, technological challenges, competing technologies or products, decreases in corporate spending, weakening economic conditions or otherwise, it could result in reduced customer orders, early terminations, reduced customer retention rates or decreased revenue, any of which would adversely affect its business operations and financial results. You should consider its business and prospects in light of the risks and difficulties it may encounter in this new and evolving market.

Forecasts of Evolv’s market and market growth may prove to be inaccurate, and even if the markets in which it competes achieve the forecasted growth, there can be no assurance that its business will grow at similar rates, or at all.

Growth forecasts included in this proxy statement/prospectus relating to Evolv’s market opportunities, including its primary touchless security screening market and adjacent markets, and the expected growth thereof, are subject to significant uncertainty and are based on assumptions and estimates which may prove to be inaccurate. Even if these markets meet its size estimate and experience the forecasted growth, it may not grow its business at a similar rate, or at all. Its growth is subject to many factors, including its success in implementing its business strategy and ability to penetrate adjacent markets, which is subject to many risks and uncertainties. Accordingly, the forecasts of market growth included in this proxy statement/prospectus should not be taken as indicative of its future growth.

If Evolv is unable to acquire new customers, its future revenues and operating results will be harmed. Likewise, potential customer turnover in the future, or costs it incurs to retain its existing customers, could materially and adversely affect its financial performance.

Evolv’s success depends on its ability to acquire new customers in new and existing verticals, and in new and existing geographic markets. If Evolv is unable to attract a sufficient number of new customers, it may be unable to generate revenue growth at desired rates. The security solutions market is competitive and many of its competitors have substantial financial, personnel and other resources that they utilize to develop solutions and attract customers. As a result, it may be difficult for us to add new customers to its customer base. Competition in the marketplace may also lead us to win fewer new customers or result in us providing discounts and other commercial incentives. Additional factors that impact its ability to acquire new customers include the perceived need for AI-based touchless

security solutions, the size of its prospective customers’ security budgets, the utility and efficacy of its existing and new products, whether proven or perceived, and general economic conditions. These factors may have a meaningful negative impact on future revenues and operating results.

Evolv’s forecasts assumed that there will be a significant market for its products outside the United States, where the ownership of privately owned firearms is significantly less prevalent. If Evolv is unable to acquire new customers outside the United States, its future revenues and operating results will be harmed.

Evolv’s success depends on its ability to acquire new customers outside the United States. The United States has significantly more privately owned firearms than any other country. If customers in other countries do not perceive the threat of firearms and weapons to be significant enough to justify the purchase of its products, it will be unable to establish a meaningful business outside the United States. If Evolv is unable to attract a sufficient number of new customers outside the United States, it may be unable to generate revenue growth at desired rates.

If Evolv is unable to sell additional products to its customers and maintain and grow its customer retention rates, its future revenue and operating results will be harmed.

Evolv’s future success depends, in part, on its ability to expand the deployment of its products with existing customers by selling them additional products. This may require increasingly sophisticated and costly sales efforts and may not result in additional sales. In addition, the rate at which its customers purchase additional products depends on a number of factors, including the perceived need for additional touchless security screening solutions as well as general economic conditions. If its efforts to sell additional products to its customers are not successful, its business may suffer.

If Evolv’s products fail or are perceived to fail to detect threats such as a firearm or other potential weapon or explosive device, or if its products contain undetected errors or defects, these failures or errors could result in injury or loss of life, which could harm its brand and reputation and have an adverse effect on its business and results of operations.

If Evolv’s products fail or are perceived to fail to detect and prevent attacks or if its products fail to identify and respond to new and increasingly complex and unpredictable methods of attacks, its business and reputation may suffer. There is no guarantee that its products will detect and prevent all attacks, especially in light of the rapidly changing security landscape to which it must respond, as well as unique factors that may be present in its customers’ operating environments. Additionally, its products may falsely detect items that do not actually represent threats. These false positives may impair the perceived reliability of its products, and may therefore adversely impact market acceptance of its products, and could result in negative publicity, loss of customers and sales and increased costs to remedy any problem.

Evolv’s products, which are complex, may also contain undetected errors or defects when first introduced or as new versions are released. Evolv has experienced these errors or defects in the past in connection with new products and product upgrades. It expects that these errors or defects will be found from time to time in the future in new or enhanced products after commercial release. Defects may result in increased vulnerability to attacks, cause its products to fail to detect security threats, or temporarily interrupt its products’ ability to screen visitors in a customer’s location. Any errors, defects, disruptions in service or other performance problems with its products may damage its customers’ business and could harm its reputation. If its products fail to detect security threats for any reason, it may incur significant costs, the attention of its key personnel could be diverted, its customers may delay or withhold payment to us or elect not to renew or cause other significant customer relations problems to arise.

Evolv may also be subject to liability claims for damages related to errors or defects in its products. For example, if its products fail to detect weapons or explosive devices that are subsequently used by terrorists to cause casualties at a high profile, public venue, its reputation could be significantly harmed. A material liability claim or other occurrence that harms its reputation or decreases market acceptance of its products may harm its business and operating results. Although Evolv has limitation of liability provisions in its terms and conditions of sale, they may not fully or effectively protect us from claims as a result of federal, state, or local laws or ordinances, or unfavorable judicial decisions in the United States or other countries. The sale and support of its products also entails the risk of product liability claims. Evolv maintains insurance to protect against certain claims associated with the use of its

products, but its insurance coverage may not adequately cover any claim asserted against it. In addition, even claims that ultimately are unsuccessful could result in its expenditure of funds in litigation, divert management’s time and other resources, and harm its business and reputation.

If Evolv does not successfully anticipate market needs and enhance its existing products or develop new products that meet those needs on a timely basis, it may not be able to compete effectively and its ability to generate revenues will suffer.

Evolv’s customers face evolving security risks, which require them to adapt to increasingly complex infrastructures that incorporate a variety of security solutions. It faces significant challenges in ensuring that its products effectively identify and respond to these security risks without disrupting the performance of its customers’ infrastructures. As a result, it must continually modify and improve its products in response to changes in its customers’ infrastructures.

Evolv cannot guarantee that it will be able to anticipate future market needs and opportunities or be able to develop product enhancements or new products to meet such needs or opportunities in a timely manner, if at all. Even if Evolv is able to anticipate, develop and commercially introduce enhancements and new products, there can be no assurance that enhancements or new products will achieve widespread market acceptance.

New products, as well as enhancements to its existing products, could fail to attain sufficient market acceptance for many reasons, including:

•        delays in releasing new products, or product enhancements;

•        failure to accurately predict market demand and to supply products that meet this demand in a timely fashion;

•        inability to protect against new types of attacks or techniques used by terrorists or other sources of threats;

•        defects in its products, errors or failures of its products;

•        negative publicity or perceptions about the performance or effectiveness of its products;

•        introduction or anticipated introduction of competing products by its competitors;

•        installation, configuration or usage errors by its customers; and

•        easing or changing of regulatory requirements related to security.

If Evolv fails to anticipate market requirements or fail to develop and introduce product enhancements or new products to meet those needs in a timely manner, it could cause us to lose existing customers and prevent us from gaining new customers, which would significantly harm its business, financial condition and results of operations.

While Evolv continues to invest significant resources in research and development to ensure that its products continue to address the security risks that its customers face, the introduction of products embodying new technologies could also render its existing products or services obsolete or less attractive to customers. If Evolv spends significant time and effort on research and development and is unable to generate an adequate return on its investment, its business and results of operations may be materially and adversely affected.

Evolv’s business model is predicated, in part, on building a customer base that will generate a recurring stream of revenues through the sale of its subscription contracts. If that recurring stream of revenues does not develop as expected, or if its business model changes as the industry evolves, its operating results may be adversely affected.

Evolv’s business model is dependent, in part, on its ability to maintain and increase subscriptions for its proprietary products as they generate recurring revenues. Existing and future customers of its systems may not purchase its subscriptions for its proprietary products at the same rate at which customers currently purchase those subscriptions. If its current and future customers purchase a lower volume of its subscriptions for its proprietary products, its recurring revenue stream relative to its total revenues would be reduced and its operating results would be adversely affected.

Evolv’s sales cycles can be long and unpredictable, and its sales efforts require considerable time and expense. As a result, its sales and revenue are difficult to predict and may vary substantially from period to period, which may cause its results of operations to fluctuate significantly.

Evolv’s results of operations may fluctuate, in part, because of the resource intensive nature of its sales efforts, the length and variability of its sales cycle and the short-term difficulty in adjusting its operating expenses. Its results of operations depend in part on sales to large organizations. The length of its sales cycle, from proof of concept to delivery of and payment for its platform, is typically three to nine months but can be more than a year for high profile public and private venues customers, and for customers in its emerging international markets. To the extent its competitors develop solutions that its prospective customers view as equivalent, its average sales cycle may increase. Because the length of time required to close a sale varies substantially from customer to customer, it is difficult to predict exactly when, or even if, Evolv will book a sale with a potential customer. As a result, large individual sales have, in some cases, occurred in quarters subsequent to those it anticipated, or have not occurred at all. The loss or delay of one or more large transactions in a quarter could impact its results of operations for that quarter and any future quarters for which revenue from that transaction is delayed. As a result of these factors, it is difficult for us to forecast its revenue accurately in any quarter. Because a substantial portion of its expenses are relatively fixed in the short term, its results of operations will suffer if its revenue falls below its or analysts’ expectations in a particular quarter, which could cause the price of the Combined Company’s common stock to decline.

Evolv relies on reseller partners to generate a growing portion of its revenue, including in emerging international markets. If it fails to maintain successful relationships with its reseller partners, or if its partners fail to perform, its ability to market, sell and distribute its products will be limited, and its business, financial position and results of operations will be harmed.

In addition to its direct sales force, Evolv relies on its reseller partners to sell its products. It expects to continue to focus on generating sales to new and existing customers through its reseller partners as a part of its growth strategy.

Evolv provides its reseller partners with specific training and programs to assist them in selling its products, but there can be no assurance that these steps will be effective. In addition, its reseller partners may be unsuccessful in marketing, selling and supporting its products. If Evolv is unable to develop and maintain effective sales incentive programs for its third-party reseller partners, it may not be able to incentivize these partners to sell its products to customers and, in particular, to high profile public and private venues. Its agreements with its reseller partners are generally non-exclusive and these partners may also market, sell and support products that are competitive with theirs and may devote more resources to the marketing, sales and support of such competitive products. These partners may have incentives to promote its competitors’ products to the detriment of its own or may cease selling its products altogether. Its reseller partners may cease or de-emphasize the marketing of its products with limited or no notice and with little or no penalty. Its agreements with its reseller partners may generally be terminated for any reason by either party with advance notice prior to each annual renewal date. It cannot be certain that it will retain these reseller partners or that it will be able to secure additional or replacement reseller partners. The loss of one or more of its significant reseller partners or a decline in the number or size of orders from them could harm its operating results. In addition, any new reseller partner requires extensive training and may take several months or more to achieve productivity. Its reseller partner sales structure could subject us to lawsuits, potential liability and reputational harm if, for example, any of its reseller partners misrepresent the functionality of its products, subscriptions or services to customers or violate laws or its corporate policies.

If Evolv fails to effectively manage its existing resellers, or if its reseller partners are unsuccessful in fulfilling the orders for its products, or if Evolv is unable to enter into arrangements with, and retain a sufficient number of, high quality reseller partners in each of the regions in which it sells products and keep them motivated to sell its products, its ability to sell its products and operating results will be harmed. The termination of its relationship with any significant reseller partner may also adversely impact its sales and operating results.

A portion of its revenue is generated by sales to government entities, which are subject to a number of challenges and risks.

Selling to government entities can be highly competitive, expensive and time-consuming, and often requires significant upfront time and expense without any assurance that it will win a sale. Government demand and payment for its solutions may also be impacted by changes in fiscal or contracting policies, changes in government programs or applicable requirements, the adoption of new laws or regulations or changes to existing laws or regulations, public sector budgetary cycles and funding authorizations, with funding reductions or delays adversely affecting public sector demand for its solutions. Accordingly, increasing sales of its products to government entities may be more challenging than selling to commercial organizations, especially given extensive certification, clearance and security requirements. Government agencies may have statutory, contractual or other legal rights to terminate contracts with us or reseller partners. Further, in the course of providing its solutions to government entities, its employees and those of its reseller partners may be exposed to sensitive government information. Any failure by us or its reseller partners to safeguard and maintain the confidentiality of such information could subject us to liability and reputational harm, which could materially and adversely affect its results of operations and financial performance. Governments routinely investigate and audit government contractors’ administrative processes, and any unfavorable audit may cause the government to shift away from its solutions and may result in a reduction of revenue, fines or civil or criminal liability if the audit uncovers improper or illegal activities, which could adversely impact its results or operations.

Fluctuating economic conditions make it difficult to predict revenue for a particular period, and a shortfall in revenue may harm its operating results.

Evolv’s revenue depends significantly on general economic conditions and the level of concern regarding physical security and the public’s willingness to attend live events. Economic weakness, customer financial difficulties and constrained spending on security measures may result in decreased revenue and earnings. Such factors could make it difficult to accurately forecast its sales and operating results and could negatively affect its ability to provide accurate forecasts of its costs and expenses. In addition, concerns regarding continued budgetary challenges in the United States and Europe, geopolitical turmoil and terrorism in many parts of the world, and the effects of climate change have and may continue to put pressure on global economic conditions and physical security concerns. If Evolv does not succeed in convincing customers that its products should be an integral part of their overall approach to security and that a fixed portion of their annual security budgets should be allocated to its products, general reductions in security spending by its customers are likely to have a disproportionate impact on its business, results of operations and financial condition. General economic weakness may also lead to longer collection cycles for payments due from its customers, an increase in customer bad debt, restructuring initiatives and associated expenses and impairment of investments. Furthermore, the continued weakness and uncertainty in worldwide credit markets, including the sovereign debt situation in certain countries in the European Union, or EU, may adversely impact the ability of its customers to adequately fund their expected capital expenditures, which could lead to delays or cancellations of planned purchases of its products.

Uncertainty about future economic conditions also makes it difficult to forecast operating results and to make decisions about future investments. Future or continued economic weakness for us or its customers, failure of its customers and markets to recover from such weakness, customer financial difficulties and reductions in spending on security systems could have a material adverse effect on demand for its products, and consequently on its business, financial condition and results of operations.

Evolv’s brand, reputation and ability to attract, retain and serve its customers are dependent in part upon the reliable performance of its products and infrastructure.

Evolv’s brand, reputation and ability to attract, retain and serve its customers are dependent in part upon the reliable performance of, and the ability of its existing customers and new customers to access and use, its solutions, including real-time analytics and intelligence. Evolv has experienced, and may in the future experience, disruptions, outages and other performance problems due to a variety of factors, including infrastructure changes, equipment failure, human or software errors, capacity constraints, and fraud or cybersecurity attacks. In some instances, it may not be able to identify the cause or causes of these performance problems within an acceptable period of time.

Interruptions in its systems or the third-party systems on which it relies, whether due to system failures, computer viruses, physical or electronic break-ins, or other factors, could affect the security or availability of its products, network infrastructure, cloud infrastructure and website.

Problems with the reliability or security of its systems could harm its reputation. Damage to its reputation and the cost of remedying these problems could negatively affect its business, financial condition and operating results. Additionally, its third-party hosting suppliers have no obligations to renew their agreements with us on commercially reasonable terms or at all, and certain of the agreements governing these relationships may be terminated by either party at any time. If Evolv is unable to maintain, renew, or expand its agreements with these providers on commercially reasonable terms, it may experience costs or downtime as it transitions its operations.

Any disruptions or other performance problems with its products could harm its reputation and business and may damage its customers’ businesses. Interruptions in its service delivery might reduce its revenue, cause us to issue credits to customers, subject us to potential liability and cause customers not to renew their subscription purchases of its products.

If Evolv is not able to maintain and enhance its brand or reputation as an industry leader, its business and operating results may be adversely affected.

Evolv believes that maintaining and enhancing its reputation as the leader in next-generation AI-based touchless security screening is critical to its relationship with its existing end-user customers and reseller partners and its ability to attract new customers and reseller partners. The successful promotion of its brand will depend on multiple factors, including its marketing efforts, its ability to continue to deliver a superior customer experience and develop high-quality features for its products and its ability to successfully differentiate its products from those of its competitors. Its brand promotion activities may not be successful or yield increased revenue. Additionally, the performance of its reseller partners may affect its brand and reputation if customers do not have a positive experience with its products as implemented by its reseller partners or with the implementation generally. The promotion of its brand requires us to make substantial expenditures, and it anticipates that the expenditures will increase as its market becomes more competitive, as it expands into new geographies and vertical markets and as more sales are generated through its reseller partners. To the extent that these activities yield increased revenue, this revenue may not offset the increased expenses it incurs. If Evolv does not successfully maintain and enhance its brand and reputation, its business and operating results may be adversely affected.

If Evolv’s customers are unable to implement its products successfully, or if it fails to effectively assist its customers in installing its products and provide effective ongoing support and training, customer perceptions of its products may be impaired or its reputation and brand may suffer.

Evolv’s products are deployed in a wide variety of indoor and outdoor environments, including large venues with multiple entry points. Some of its customers have experienced difficulties implementing its products in the past and may experience implementation difficulties in the future. If its customers are unable to implement its products successfully, customer perceptions of its products may be impaired or its reputation and brand may suffer.

Any failure by its customers to appropriately implement its products or any failure of its products to effectively integrate and operate within its customers’ operating environments could result in customer dissatisfaction, impact the perceived reliability of its products, result in negative press coverage, negatively affect its reputation and harm its financial results.

Successful deployment and operation of its products depends on the knowledge and skill of the customer security personnel charged with setting up, configuring, monitoring, and troubleshooting the equipment in their own environment. Many of its customers experience relatively high turnover in their security personnel, creating opportunities for knowledge and skill gaps that can result, and have resulted, in configuration or operational errors that allow prohibited threats into customer facilities. In these situations, customers can perceive, and have perceived, that its products have failed to perform as designed until and unless it have been able to demonstrate otherwise. There can be no assurance that it will successfully isolate and identify failures due to customer error in the future, and this could result in customer dissatisfaction, impact the perceived reliability of its products, result in negative press coverage, negatively affect its reputation and harm its financial results.

Evolv’s customers depend in large part on customer support delivered by us to resolve issues relating to the use of its products. However, even with its support, its customers are ultimately responsible for effectively using its products, and ensuring that their staff is properly trained in the use of its products. The failure of its customers to correctly use its products, or its failure to effectively assist customers in installing its products and provide effective ongoing support and training, may result in an increase in the vulnerability of its customers’ facilities and visitors to security threats . Evolv is also in the process of expanding its customer success and support organizations. It can take significant time and resources to recruit, hire and train qualified technical support and service employees. Evolv may not be able to keep up with demand, particularly if the sales of its products exceed its internal forecasts. To the extent that Evolv is unsuccessful in hiring, training and retaining adequate support resources, its ability to provide adequate and timely support to its customers may be negatively impacted, and its customers’ satisfaction with its products may be adversely affected. Additionally, in unusual circumstances, if it were to need to rely on its sales engineers to provide post-sales support while Evolv is growing its service organization, its sales productivity may be negatively impacted. Accordingly, its failure to provide satisfactory maintenance and technical support services could have a material and adverse effect on its business and results of operations.

Evolv is dependent on the continued services and performance of its senior management and other key employees, as well as on its ability to successfully hire, train, manage and retain qualified personnel, especially those in sales and marketing and research and development.

Evolv’s future performance depends on the continued services and contributions of its senior management, particularly Peter George, its Chief Executive Officer, and other key employees to execute on its business plan and to identify and pursue new opportunities and product innovations. Evolv does not maintain key man insurance for any of its executive officers or key employees. From time to time, there may be changes in its senior management team resulting from the termination or departure of its executive officers and key employees. Evolv’s senior management and key employees are generally employed on an at-will basis, which means that they could terminate their employment with us at any time. The loss of the services of its senior management, particularly Mr. George, or other key employees for any reason could significantly delay or prevent its development or the achievement of its strategic objectives and harm its business, financial condition and results of operations.

Evolv’s ability to successfully pursue its growth strategy will also depend on its ability to attract, motivate and retain its personnel, especially those in sales and marketing and research and development. It faces intense competition for these employees from numerous technology, software and other companies, especially in certain geographic areas in which it operates, and it cannot ensure that it will be able to attract, motivate and/or retain additional qualified employees in the future. If Evolv is unable to attract new employees and retain its current employees, it may not be able to adequately develop and maintain new products, or market its existing products at the same levels as its competitors and it may, therefore, lose customers and market share. Its failure to attract and retain personnel, especially those in sales and marketing, research and development and engineering positions, could have an adverse effect on its ability to execute its business objectives and, as a result, its ability to compete could decrease, its operating results could suffer and its revenue could decrease. Even if Evolv is able to identify and recruit a sufficient number of new hires, these new hires will require significant training before they achieve full productivity and they may not become productive as quickly as it would like, or at all.

If Evolv does not effectively expand, train and retain qualified sales and marketing personnel, it may be unable to acquire new customers or sell additional products to successfully pursue its growth strategy.

Evolv depends significantly on its sales force to attract new customers and expand sales to existing customers. As a result, its ability to grow its revenue depends in part on its success in recruiting, training and retaining sufficient numbers of sales personnel to support its growth, particularly in the United States, Europe, and Asia Pacific. The number of its sales and marketing personnel increased from 17 as of December 31, 2019 to 19 as of December 31, 2020. It expects to continue to expand its sales and marketing personnel significantly and face a number of challenges in achieving its hiring and integration goals. There is intense competition for individuals with sales training and experience. In addition, the training and integration of a large number of sales and marketing personnel in a short time requires the allocation of significant internal resources. Evolv invests significant time and resources in training new sales force personnel to understand its products, platform and its growth strategy. Based on its past experience, it takes approximately six to 12 months before a new sales force member operates at target performance levels, depending on their role. However, it may be unable to achieve or maintain its target performance

levels with large numbers of new sales personnel as quickly as it has done in the past. Its failure to hire a sufficient number of qualified sales force members and train them to operate at target performance levels may materially and adversely impact its projected growth rate.

If Evolv cannot maintain its company culture as it grows, it could lose the innovation, teamwork, passion and focus on execution that it believes contribute to its success and its business may be harmed.

Evolv believes that a critical component to its success has been its mission-driven company culture based on its shared commitment to make the world a safer place to live, work, learn, and play, which it believes fosters innovation, teamwork, passion for customers and focus on execution, and facilitates critical knowledge transfer, knowledge sharing and professional growth. It has invested substantial time and resources in building its team within this company culture. Any failure to preserve its culture could negatively affect its ability to retain and recruit personnel and to effectively focus on and pursue its corporate objectives. As it grows and develop the infrastructure of a public company, it may find it difficult to maintain these important aspects of its company culture. If it fails to maintain its company culture, its business may be adversely impacted.

Evolv incorporates technology and components from third parties into its products, and its inability to obtain or maintain rights to the technology could harm its business.

Evolv incorporates technology and components from third parties into its products. It cannot be certain that its suppliers and licensors are not infringing the intellectual property rights of third parties or that the suppliers and licensors have sufficient rights to the technology in all jurisdictions in which it may sell its products. It may not be able to rely on indemnification obligations of third parties if some of its agreements with its suppliers and licensors may be terminated for convenience by them. If Evolv is unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against its suppliers and licensors or against us, or if Evolv is unable to continue to obtain such technology or enter into new agreements on commercially reasonable terms, its ability to develop and sell products, subscriptions and services containing such technology could be severely limited, and its business could be harmed. Additionally, if Evolv is unable to obtain necessary technology and components from third parties, including certain sole suppliers, it may be forced to acquire or develop alternative technology or components, which may require significant time, cost and effort and may be of lower quality or performance standards. This would limit and delay its ability to offer new or competitive products, and increase its costs of production. If alternative technology or components cannot be obtained or developed, it may not be able to offer certain functionality as part of its products, subscriptions and services. As a result, its margins, market share and results of operations could be significantly harmed.

Evolv may acquire or invest in other companies or technologies in the future, which could divert management’s attention, fail to meet its expectations, result in additional dilution to its stockholders, increase expenses, disrupt its operations or otherwise harm its operating results.

Evolv may in the future acquire or invest in, businesses, products or technologies that it believes could complement or expand its platform, enhance its technical capabilities or otherwise offer growth opportunities. Evolv may not be able to fully realize the anticipated benefits of any future acquisitions. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses related to identifying, investigating and pursuing suitable acquisitions, whether or not they are consummated.

There are inherent risks in integrating and managing acquisitions. If it acquires additional businesses, it may not be able to assimilate or integrate the acquired personnel, operations, products, services and technologies successfully or effectively manage the combined business following the acquisition and its management may be distracted from operating its business. Evolv also may not achieve the anticipated benefits from the acquired business due to a number of factors, including, without limitation:

•        unanticipated costs or liabilities associated with the acquisition;

•        incurrence of acquisition-related costs, which would be recognized as a current period expense;

•        inability to generate sufficient revenue to offset acquisition or investment costs;

•        the inability to maintain relationships with customers and partners of the acquired business;

•        the difficulty of incorporating acquired technology and rights into its platform and of maintaining quality and security standards consistent with its brand;

•        delays in customer purchases due to uncertainty related to any acquisition;

•        the need to integrate or implement additional controls, procedures and policies;

•        challenges caused by distance, language and cultural differences;

•        harm to its existing business relationships with business partners and customers as a result of the acquisition;

•        the potential loss of key employees;

•        use of resources that are needed in other parts of its business and diversion of management and employee resources;

•        the inability to recognize acquired deferred revenue in accordance with its revenue recognition policies; and

•        use of substantial portions of its available cash or the incurrence of debt to consummate the acquisition.

Acquisitions also increase the risk of unforeseen legal liability, including for potential shareholder suits or potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered by due diligence during the acquisition process. Generally, if an acquired business fails to meet its expectations, its operating results, business and financial condition may suffer. Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt, which could adversely affect its business, results of operations and financial condition.

In addition, a significant portion of the purchase price of companies it acquires may be allocated to goodwill and other intangible assets, which must be assessed for impairment at least annually. If its acquisitions do not ultimately yield expected returns, we may be required to take charges to its operating results based on its impairment assessment process, which could harm its results of operations.

Evolv’s intellectual property rights are valuable and any inability to protect its proprietary technology and intellectual property rights could substantially harm its business and operating results.

Evolv’s future success and competitive position depend in part on its ability to protect its intellectual property and proprietary technologies. To safeguard these rights, it relies on a combination of patent, trademark, copyright and trade secret laws and contractual protections in the United States and other jurisdictions, all of which provide only limited protection and may not now or in the future provide us with a competitive advantage. Evolv maintains a program of identifying technology appropriate for patent protection. Evolv’s practice is to require employees and consultants to execute non-disclosure and proprietary rights agreements upon commencement of employment or consulting arrangements. These agreements acknowledge its exclusive ownership of all intellectual property developed by the individuals during their work for us and require that all proprietary information disclosed will remain confidential. Such agreements may not be enforceable in full or in part in all jurisdictions and any breach could have a negative effect on its business and its remedy for such breach may be limited.

Evolv owns or co-own six U.S. patents, seven issued foreign patents and have nine patent applications relating to its products. It cannot be certain that any patents will issue from any patent applications, that patents that issue from such applications will give us the protection that we seek or that any such patents will not be challenged, invalidated, or circumvented. Any patents that may issue in the future from its pending or future patent applications may not provide sufficiently broad protection and may not be enforceable in actions against alleged infringers. Evolv has registered the Evolv Express and Evolv Edge names and logos in the United States and certain other countries. It also has registrations and/or pending applications for additional marks in the United States and other countries; however, we cannot be certain that any future trademark registrations will be issued for pending or future applications or that any registered trademarks will be enforceable or provide adequate protection of its proprietary rights. Evolv also licenses software from third parties for integration into its products, including open source software and other software available on commercially reasonable terms. It cannot be certain that such third parties will maintain such software or continue to make it available.

In order to protect its unpatented proprietary technologies and processes, Evolv relies on trade secret laws and confidentiality agreements with its employees, consultants, reseller partners, vendors and others. Despite its efforts to protect its proprietary technology and trade secrets, unauthorized parties may attempt to misappropriate, reverse engineer or otherwise obtain and use them. In addition, others may independently discover its trade secrets, in which case it would not be able to assert trade secret rights, or develop similar technologies and processes. Further, the contractual provisions that it enters into may not prevent unauthorized use or disclosure of its proprietary technology or intellectual property rights and may not provide an adequate remedy in the event of unauthorized use or disclosure of its proprietary technology or intellectual property rights. Moreover, policing unauthorized use of its technologies, trade secrets and intellectual property is difficult, expensive and time-consuming, particularly in foreign countries where the laws may not be as protective of intellectual property rights as those in the United States and where mechanisms for enforcement of intellectual property rights may be weak. Evolv may be unable to determine the extent of any unauthorized use or infringement of its products, technologies or intellectual property rights.

From time to time, legal action by us may be necessary to enforce its patents and other intellectual property rights, to protect its trade secrets, to determine the validity and scope of the intellectual property rights of others or to defend against claims of infringement or invalidity. Such litigation could result in substantial costs and diversion of resources and could negatively affect its business, operating results and financial condition.

Assertions by third parties of infringement or other violations by us of their intellectual property rights, whether or not correct, could result in significant costs and harm its business and operating results.

Third parties may in the future assert claims of infringement, misappropriation or other violations of intellectual property rights against Evolv. They may also assert such claims against its customers or reseller partners, whom it typically indemnifies against claims that its products infringe, misappropriate or otherwise violate the intellectual property rights of third parties. If Evolv does infringe a third party’s rights and is unable to provide a sufficient workaround, it may need to negotiate with holders of those rights to obtain a license to those rights or otherwise settle any infringement claim as a party that makes a claim of infringement against us may obtain an injunction preventing us from shipping products containing the allegedly infringing technology. As the number of products and competitors in its market increase and overlaps occur, claims of infringement, misappropriation and other violations of intellectual property rights may increase. Any claim of infringement, misappropriation or other violation of intellectual property rights by a third party, even those without merit, could cause us to incur substantial costs defending against the claim and could distract its management from its business.

Future assertions of patent rights by third parties, and any resulting litigation, may involve patent holding companies or other adverse patent owners who have no relevant product revenues and against whom its own patents may therefore provide little or no deterrence or protection. There can be no assurance that Evolv will not be found to infringe or otherwise violate any third-party intellectual property rights or to have done so in the past.

An adverse outcome of a dispute may require Evolv to:

•        pay substantial damages, including treble damages, if Evolv is found to have willfully infringed a third party’s patents or copyrights;

•        cease making, licensing or using products that are alleged to infringe or misappropriate the intellectual property of others;

•        expend additional development resources to attempt to redesign its products or otherwise develop non-infringing technology, which may not be successful;

•        enter into potentially unfavorable royalty or license agreements to obtain the right to use necessary technologies or intellectual property rights;

•        take legal action or initiate administrative proceedings to challenge the validity and scope of the third-party rights or to defend against any allegations of infringement; and

•        indemnify its partners and other third parties.

In addition, royalty or licensing agreements, if required or desirable, may be unavailable on terms acceptable to us, or at all, and may require significant royalty payments and other expenditures. Some licenses may also be non-exclusive, and therefore its competitors may have access to the same technology licensed to us. Any of the foregoing events could seriously harm its business, financial condition and results of operations.

Confidentiality arrangements with employees and others may not adequately prevent disclosure of trade secrets and other proprietary information.

Evolv has devoted substantial resources to the development of its technology, business operations and business plans. In order to protect its trade secrets and proprietary information, it relies in significant part on confidentiality arrangements with its employees, licensees, independent contractors, advisors, reseller partners and customers. These arrangements may not be effective to prevent disclosure of confidential information, including trade secrets, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, if others independently discover trade secrets and proprietary information, it would not be able to assert trade secret rights against such parties. Effective trade secret protection may not be available in every country in which its products are available or where it has employees or independent contractors. The loss of trade secret protection could make it easier for third parties to compete with its products by copying functionality. In addition, any changes in, or unexpected interpretations of, the trade secret and employment laws in any country in which Evolv operates may compromise its ability to enforce its trade secret and intellectual property rights. Costly and time-consuming litigation could be necessary to enforce and determine the scope of its proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect its competitive business position.

Evolv’s products and services may be affected from time to time by design and manufacturing defects that could adversely affect its business and result in harm to its reputation.

Evolv’s touchless security screening systems are complex and may contain undetected defects or errors when first introduced or as enhancements are released that, despite testing, are not discovered until after a product has been used. This could result in delayed market acceptance of those products or claims from resellers, customers or others, which may result in litigation, increased end user warranty, support and repair or replacement costs, damage to its reputation and business, or significant costs and diversion of support and engineering personnel to correct the defect or error. It may from time to time become subject to warranty or product liability claims related to product quality issues that could lead us to incur significant expenses.

Evolv attempts to include provisions in its agreements with customers that are designed to limit its exposure to potential liability for damages arising from defects or errors in its products. However, it is possible that these limitations may not be effective as a result of unfavorable judicial decisions or laws enacted in the future.

The sale and support of Evolv’s products entails the risk of product liability claims. Any product liability claim brought against it, regardless of its merit, could result in material expense, diversion of management time and attention, damage to its business and reputation and brand, and cause us to fail to retain existing customers or to fail to attract new customers.

Increases in component costs, long lead times, supply shortages, and supply changes could disrupt Evolv’s supply chain and have an adverse effect on its business, financial condition, and operating results.

Evolv acquires certain of its materials, which are critical to the ongoing operation and future growth of its business, from several third parties. Generally, its third-party contract manufacturers contract directly with component suppliers, and it relies on its contract manufacturers to manage their supply chains. If one of its contract manufacturers has supply chain disruption, or its relationship with its contract manufacturer terminates, Evolv could experience delay. It also sources some materials and components directly from suppliers. While most components and materials for its products are available from multiple suppliers, certain of those items are only available from limited or sole sources. Should any of these suppliers become unavailable or inadequate, or impose terms unacceptable to Evolv, such as increased pricing terms, it could be required to spend a significant amount of time and expense to develop alternate sources of supply, and may not be successful in doing so on terms acceptable to it, or at all. As a result, the loss of a limited or sole source supplier could adversely affect its relationship with its customers as well as its results of operations and financial condition.

Evolv depends on third-party contract manufacturers for the production of its touchless security screening systems. While there are several potential manufacturers for most of these products, all of its products are currently manufactured, assembled, tested and generally packaged by a third-party manufacturer located in Massachusetts. In most cases, it relies on this manufacturer to procure components and, in some cases, provide manufacturing engineering work. Although Evolv is seeking to expand and diversify its contract manufacturer relationships, its current reliance on contract manufacturing involves a number of risks, including:

•        unexpected increases in manufacturing and repair costs;

•        inability to control the quality and reliability of finished products;

•        inability to control delivery schedules;

•        potential liability for expenses incurred by the third-party contract manufacturer in reliance on its forecasts that later prove to be inaccurate;

•        potential lack of adequate capacity to manufacture all or a part of the products we require;

•        the occurrence of unforeseen force majeure events; and

•        potential labor unrest affecting the ability of the third-party manufacturers to produce its products.

If Evolv’s third-party contract manufacturer experiences a delay, disruption or quality control problems in its operations, including due to the COVID-19 pandemic, or if the third-party contract manufacturer does not renew its agreement with us, its operations could be significantly disrupted and its product shipments could be delayed. Qualifying a new manufacturer and commencing volume production is expensive and time consuming. Ensuring that a contract manufacturer is qualified to manufacture its products to its standards is time consuming. In addition, there is no assurance that a contract manufacturer can scale its production of its products at the volumes and in the quality that it requires. If a contract manufacturer is unable to do these things, it may have to move production for the products to a new or existing third-party manufacturer, which would take significant effort and its business, results of operations and financial condition could be materially adversely affected.

As Evolv contemplates moving manufacturing into different jurisdictions, it may be subject to additional significant challenges in ensuring that quality, processes, and costs, among other issues, are consistent with its expectations. For example, while it expects its third-party contract manufacturers to be responsible for penalties assessed on it because of excessive failures of the products, there is no assurance that it will be able to collect such reimbursements from these manufacturers, which causes it to take on additional risk for potential failures of its products.

In addition, because Evolv currently uses a single third-party contract manufacturer, increases in the prices charged may have an adverse effect on its results of operations, as we may be unable to find a contract manufacturer who can supply us at a lower price. As a result, the loss of a limited or sole source supplier could adversely affect its relationships with its customers and its results of operations and financial condition.

Evolv’s third-party contract manufacturer’s facilities, and its suppliers’ and its customers’ facilities, are vulnerable to disruption due to natural or other disasters, strikes and other events beyond its control.

A major earthquake, fire, tsunami, hurricane, cyclone or other disaster, such as a major flood, seasonal storms, nuclear event or terrorist attack affecting its facilities or the areas in which they are located, or affecting those of its customers or third-party manufacturers or suppliers, could significantly disrupt its or their operations and delay or prevent product shipment or installation during the time required to repair, rebuild or replace its or their damaged manufacturing facilities. These delays could be lengthy and costly. If its third-party contract manufacturer’s, suppliers’ or customers’ facilities are negatively impacted by such a disaster, production, shipment and installation of its products could be delayed, which can impact the period in which it recognizes the revenue related to that product sale. Additionally, customers may delay purchases of its products until operations return to normal. Even if Evolv is able to respond quickly to a disaster, the continued effects of the disaster could create uncertainty in its business operations. In addition, concerns about terrorism, the effects of a terrorist attack, political turmoil, labor strikes, war or the outbreak of epidemic diseases (including the on-going COVID-19 pandemic) could have a negative effect on its operations and sales.

Downturns in general economic and market conditions and reductions in spending may reduce demand for its products and services, which could harm its revenue, results of operations and cash flows.

Evolv’s performance depends on the financial health and strength of its customers, which in turn is dependent on the economic conditions of the markets in which it and its customers operate. The recent declines in the global economy, widespread and prolonged closures of public and private sports, entertainment and other venues, continuing geopolitical uncertainties and other macroeconomic factors all affect the spending behavior of potential customers. During weak economic times, its available pool of potential customers may decline as potential customers reduce their security-related budget allocations and, in turn, its growth prospects may be negatively impacted. Prolonged economic slowdowns may result in diminished sales of its products and services. Further worsening, broadening or protracted extension of an economic downturn could have a negative impact on its business, revenue, results of operations and cash flows.

Evolv also faces risks from financial difficulties or other uncertainties experienced by its suppliers, distributors or other third parties on which it relies. If third parties are unable to supply Evolv with required materials or components or otherwise assist us in operating its business, its business could be harmed.

If the general level of physical threats/attacks declines, or is perceived by its current or potential customers to have declined, Evolv’s business could be harmed.

Evolv’s business is substantially dependent on enterprises and governments recognizing that mass shootings, terrorist attacks and similar security threats are not necessarily effectively prevented by conventional security products such as walk-through metal detectors. High visibility attacks on prominent enterprises and governments have increased market awareness of the problem of security threats and help to provide an impetus for enterprises and governments to devote resources to protecting against security threats, such as testing its products, purchasing them and broadly deploying them within their organizations. If security threats were to decline, or enterprises or governments perceived that the general level of security threats has declined, its ability to attract new customers and expand sales of its products to existing customers could be materially and adversely affected. A reduction in the threat landscape could increase its sales cycles and harm its business, results of operations and financial condition.

If Evolv is unable to compete effectively with new entrants and other potential competitors, its sales and profitability could be adversely affected.

The sales prices for Evolv’s products and services may decline for a variety of reasons, including competitive pricing pressures, discounts, a change in its mix of products and services, anticipation of the introduction of new products or promotional programs. Competition continues to increase in the market segments in which it participates, and it expects competition to further increase in the future, thereby leading to increased pricing pressures. Larger competitors with more diverse product and service offerings may reduce the price of products that compete with theirs or may bundle them with other products and services. Additionally, currency fluctuations in certain countries and regions may negatively impact prices that partners and customers are willing to pay in those countries and regions. Furthermore, Evolv anticipates that the sales prices and gross profits for its products will decrease over product life cycles. It cannot be certain that it will be successful in developing and introducing new products with enhanced functionality on a timely basis, or that its new product offerings, if introduced, will enable us to maintain its prices and gross profits at levels that will allow us to maintain positive gross margins and achieve profitability.

Because Evolv’s products may collect and store visitor and related information, domestic and international privacy and cyber security concerns, and other laws and regulations, could result in additional costs and liabilities to us or inhibit sales of its products.

Evolv, its reseller partners and its customers are subject to a number of domestic and international laws and regulations that apply to cloud services and the internet generally. These laws, rules and regulations address a range of issues including data privacy and cyber security, breach notification and restrictions or technological requirements regarding the collection, processing, use, storage, protection, retention or transfer of data. The regulatory framework for online services, data privacy and cyber security issues worldwide can vary substantially from jurisdiction to jurisdiction, is rapidly evolving and is likely to remain uncertain for the foreseeable future. Many federal, state and foreign government bodies and agencies have adopted or are considering adopting laws, rules and regulations

regarding the collection, processing, use, storage and disclosure of information, web browsing and geolocation data collection, data analytics, facial recognition, cyber security and breach response and notification procedures. Interpretation of these laws, rules and regulations and their application to its products in the United States and foreign jurisdictions is ongoing and cannot be fully determined at this time.

In the United States, these include rules and regulations promulgated under the authority of the Federal Trade Commission, the Electronic Communications Privacy Act, Computer Fraud and Abuse Act, HIPAA, the Gramm Leach Bliley Act and state breach notification laws, other state laws (e.g., the California Consumer Privacy Act) and regulations applicable to privacy and data security, as well as regulator enforcement positions and expectations reflected in federal and state regulatory actions, settlements, consent decrees and guidance documents.

Internationally, virtually every jurisdiction in which Evolv operates and has customers and/or have prospective customers to which it markets has established its own data security and privacy legal frameworks with which Evolv, its reseller partners or its customers must comply. Further, many federal, state and foreign government bodies and agencies have introduced, and are currently considering, additional laws and regulations. If passed, Evolv will likely incur additional expenses and costs associated with complying with such laws, as well as face heightened potential liability if Evolv is unable to comply with these laws.

Laws in the European Economic Area, or EEA, regulate transfers of EU personal data to third-party countries, such as the United States, that have not been found to provide adequate protection to such personal data. Evolv could be impacted by changes in law as a result of the current challenges to existing regulatory frameworks by regulators and in the European courts which may lead to governmental enforcement actions, litigation, fines and penalties or adverse publicity, which could have an adverse effect on its reputation and business.

On April 27, 2016, the European Union adopted the General Data Protection Regulation 2016/679, or GDPR, that took effect on May 25, 2018 replacing the current data protection laws of each EU member state. The GDPR applies to any company established in the EU as well as to those outside the EU if they collect and use personal data in connection with the offering of goods or services to individuals in the EU or the monitoring of their behavior (for example, through email monitoring). The GDPR enhances data protection obligations for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements and onerous new obligations on services providers. Non-compliance with the GDPR can trigger steep fines of up to €20 million or 4% of total worldwide annual turnover, whichever is higher. Separate EU laws and regulations (and member states’ implementations thereof) govern the protection of consumers and of electronic communications and these are also evolving. For instance, the current European laws that cover the use of cookies and similar technology and marketing online or by electronic means are under reform. A draft of the new ePrivacy Regulation extends the strict opt-in marketing rules with limited exceptions to business-to-business communications, alters rules on third-party cookies, web beacons and similar technology and significantly increases penalties. Evolv cannot yet determine the impact such future laws, regulations, and standards may have on its business. Such laws and regulations are often subject to differing interpretations and may be inconsistent among jurisdictions. If Evolv is deemed to come under the GDPR’s coverage, it may incur substantial expense in complying with the new obligations to be imposed by the GDPR and we may be required to make significant changes in its business operations and product and services development, all of which may adversely affect its revenues and its business.

Evolv and its customers are at risk of enforcement actions taken by certain EU data protection authorities until such point in time that it may be able to ensure that all transfers of personal data to us from the EEA are conducted in compliance with all applicable regulatory obligations, the guidance of data protection authorities and evolving best practices. Evolv may find it necessary to establish systems to maintain personal data originating from the EU in the EEA, which may involve substantial expense and may cause us to need to divert resources from other aspects of its business, all of which may adversely affect its business.

Because the interpretation and application of privacy and data protection laws are still uncertain, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with its existing practices or the features of its products. Evolv may also be subject to claims of liability or responsibility for the actions of third parties with whom it interacts or upon whom it relies in relation to various products, including but not limited to vendors and business partners. If so, in addition to the possibility of fines, lawsuits and other claims, it could be required to fundamentally change its business activities and practices or modify its products, which could have an

adverse effect on its business. Any inability to adequately address privacy and/or data concerns, even if unfounded, or comply with applicable privacy or data protection laws, regulations and policies, could result in additional cost and liability to us, damage its reputation, inhibit sales and adversely affect its business.

The costs of compliance with, and other burdens imposed by, the laws, rules, regulations and policies that are applicable to the businesses of its customers may limit the use and adoption of, and reduce the overall demand for, its software. Even the perception of privacy concerns, whether or not valid, may harm its reputation, inhibit adoption of its products by current and future customers, or adversely impact its ability to attract and retain workforce talent. Its failure to comply with applicable laws and regulations, or to protect such data, could result in enforcement action against us, including fines, imprisonment of company officials and public censure, claims for damages by customers and other affected individuals, damage to its reputation and loss of goodwill (both in relation to existing customers and prospective customers), any of which could have a material adverse effect on its operations, financial performance and business.

Evolv’s operating results may be harmed if Evolv is required to collect sales and use or other related taxes for its products in jurisdictions where it has not historically done so.

Taxing jurisdictions, including state, local and foreign taxing authorities, have differing rules and regulations governing sales and use or other taxes, and these rules and regulations are subject to varying interpretations that may change over time. In particular, significant judgment is required in evaluating its tax positions and its worldwide provision for taxes. While Evolv believes that it is in material compliance with its obligations under applicable taxing regimes, one or more states, localities or countries may seek to impose additional sales or other tax collection obligations on us, including for past sales by us or its reseller partners. It is possible that Evolv could face sales tax audits and that such audits could result in tax-related liabilities for which it has not accrued. A successful assertion that it should be collecting additional sales or other taxes on its products in jurisdictions where it has not historically done so and do not accrue for sales taxes could result in substantial tax liabilities for past sales, discourage customers from purchasing its products or otherwise harm its business and operating results.

In addition, Evolv’s tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including those relating to income tax nexus, jurisdictional mix of profits at varying statutory tax rates, by changes in foreign currency exchange rates, or by changes in the valuation of its deferred tax assets and liabilities. Although Evolv believes its tax estimates are reasonable, the final determination of any tax audits or litigation could be materially different from its historical tax provisions and accruals, which could have a material adverse effect on its operating results or cash flows in the period or periods for which a determination is made.

Our ability to utilize net operating loss carryforwards as well as research and development tax credit carryforwards to offset future taxable income may be subject to certain limitations and we could be subject to tax audits or examinations that could result in a loss of our net operating loss carryforwards as well as research and development credits and/or cash tax exposures.

As of December 31, 2020, Evolv had federal net operating losses of $20.1 million that are subject to expire at various dates through 2033, and net operating losses of $33.9 million, which have no expiration date and can be used to offset up to 80% of future taxable income in any one tax period. As of December 31, 2019, Evolv had federal net operating losses of $20.1 million that are subject to expire at various dates through 2033, and net operating losses of $20.5 million, which have no expiration date. Evolv also had post-apportioned state net operating loss carryforwards of $42.6 million and $29.8 million for the years ended December 31, 2020 and 2019, respectively, which may be available to offset future state taxable income and which begin to expire in 2033. Additional NOLs of approximately $0.2 million were generated in the United Kingdom and will not expire. As of December 31, 2020, it had U.S. federal and state research and development tax credit carryforwards of $2.5 million and $1.7 million, respectively, which may be available to offset future tax liabilities and begin to expire in 2033 and 2028, respectively. As of December 31, 2019, Evolv had U.S. federal and state research and development tax credit carryforwards of $1.2 million and $0.8 million, respectively. These net operating loss and tax credit carryforwards could expire unused and be unavailable to offset its future income tax liabilities. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50% change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income may be limited. Evolv has not determined if it

has experienced Section 382 ownership changes in the past and if a portion of its net operating loss and tax credit carryforwards is subject to an annual limitation under Section 382. In addition, it may experience ownership changes in the future as a result of subsequent shifts in its stock ownership, including the Business Combination, some of which may be outside of its control. If it determines that an ownership change has occurred and its ability to use its historical net operating loss and tax credit carryforwards is materially limited, it would harm its future operating results by effectively increasing its future tax obligations.

Evolv may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.

Evolv intends to continue to make investments to support its business growth and may require additional funds to respond to business challenges, including the need to develop new features or enhance its products, improve its operating infrastructure or acquire complementary businesses and technologies. Accordingly, it may need to engage in equity or debt financings to secure additional funds. If Evolv raises additional funds through future issuances of equity or convertible debt securities, its existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of its common stock. Any debt financing that it may secure in the future could involve restrictive covenants relating to its capital raising activities and other financial and operational matters, which may make it more difficult for it to obtain additional capital and to pursue business opportunities, including potential acquisitions. Evolv may not be able to obtain additional financing on terms favorable to it, if at all. If Evolv is unable to obtain adequate financing or financing on terms satisfactory to it when we require it, its ability to continue to support its business growth and to respond to business challenges could be significantly impaired, and its business may be adversely affected.

As a result of becoming a public company, Evolv will be obligated to develop and maintain effective internal control over financial reporting. Evolv has identified a material weakness in its internal control over financial reporting and if its remediation of this material weaknesses is not effective, or if it fails to develop and maintain effective disclosure controls/procedures and internal control over financial reporting, its ability to produce timely and accurate financial statements or comply with applicable laws and regulations could be impaired which may adversely affect Evolv’s business and stock price.

As a public company, Evolv will be required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness of its internal control over financial reporting. Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations. Ineffective internal controls could also cause investors to lose confidence in its reported financial information, which could have a negative effect on the trading price of the common stock.

Evolv has historically maintained a limited internal accounting and finance staff. However, fulfilling our obligations incident to continuing to be a public company will be expensive and time consuming and we may not have adequate staff to do so, which has resulted in Evolv’s independent registered public accounting firm identifying a material weakness in our internal control over financial reporting in accordance with U.S. GAAP. If Evolv does not hire additional finance and accounting personnel with appropriate public company experience and technical accounting knowledge as it continues to build its financial reporting infrastructure, this material weakness could result in misstatements in its financial statements that could be material and may not be prevented or detected on a timely basis.

If Evolv is unable to assert that its internal control over financial reporting is effective, or if its independent registered public accounting firm is unable to express an opinion on the effectiveness of its internal control over financial reporting, including as a result of the material weakness described above, it could lose investor confidence in the accuracy and completeness of our financial reports, which could cause the price of its common stock to decline, and it may be subject to investigation and/or sanctions by the SEC. In addition, if it is unable to meet these requirements, it may not be able to remain listed on Nasdaq.

Material weaknesses in Evolv’s internal control over financial reporting were identified in connection with the preparation of Evolv’s consolidated financial statements. If Evolv is unable to remediate these material weaknesses, these material weaknesses could result in a material misstatement of Evolv’s consolidated financial statements.

In connection with the preparation of Evolv’s consolidated financial statements, material weaknesses in Evolv’s internal control over financial reporting were identified as of December 31, 2020. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim consolidated financial statements will not be prevented or detected on a timely basis. These material weaknesses are as follows:

•        Evolv did not design and maintain an effective control environment commensurate with its financial reporting requirements. Specifically, Evolv lacked a sufficient complement of personnel with an appropriate level of internal controls and accounting knowledge, training and experience commensurate with our financial reporting requirements. Additionally, the limited personnel resulted in an inability to consistently establish appropriate authorities and responsibilities in pursuit of financial reporting objectives, as demonstrated by, among other things, insufficient segregation of duties in our finance and accounting functions. This material weakness contributed to the following material weaknesses.

•        Evolv did not design and maintain effective controls over the period-end financial reporting process to achieve complete, accurate and timely financial accounting, reporting and disclosures, including the classification of various accounts in the financial statements.

•        Evolv did not design and maintain processes and controls to analyze, account for and disclose non-routine, unusual or complex transactions. Specifically, Evolv did not design and maintain controls to timely analyze and account for debt modifications and extinguishments, convertible notes, warrants issued with debt instruments, and non-routine complex revenue transactions including the leasing of products. Evolv did not design and maintain formal accounting policies, procedures and controls to achieve complete, accurate and timely financial accounting, reporting and disclosures, including segregation of duties and controls over the preparation and review of account reconciliations and journal entries.

These material weaknesses resulted in audit adjustments to accounts payable and accrued liabilities, long-term and short-term debt, convertible notes, equity, commission assets, revenue, deferred revenue and various expense line items and related financial statement disclosures, which were recorded prior to the issuance of the consolidated financial statements as of and for the years ended December 31, 2019 and 2020. Additionally, these material weaknesses could result in a misstatement of substantially all of Evolv’s accounts or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

•        Evolv did not design and maintain effective controls over information technology (“IT”) general controls for information systems that are relevant to the preparation of its financial statements, specifically, with respect to: (i) program change management controls for financial systems to ensure that IT program and data changes affecting financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately; (ii) user access controls to ensure appropriate segregation of duties and that adequately restrict user and privileged access to financial applications, programs, and data to appropriate company personnel; (iii) computer operations controls to ensure that critical batch jobs are monitored and data backups are authorized and monitored, and (iv) testing and approval controls for program development to ensure that new software development is aligned with business and IT requirements. These IT deficiencies did not result in a misstatement to the financial statements, however, the deficiencies, when aggregated, could impact maintaining effective segregation of duties, as well as the effectiveness of IT-dependent controls (such as automated controls that address the risk of material misstatement to one or more assertions, along with the IT controls and underlying data that support the effectiveness of system-generated data and reports) that could result in misstatements potentially impacting all financial statement accounts and disclosures that would not be prevented or detected. Accordingly, management has determined these deficiencies in the aggregate constitute a material weakness.

The effectiveness of Evolv’s internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the possibility of human error and the risk of fraud. If Evolv is unable to remediate the material weaknesses, Evolv’s ability to record, process and report financial information accurately, and to prepare financial statements within the time periods specified by the forms of the SEC, could be adversely affected which, in turn, to may adversely affect Evolv’s reputation and business and the market price of Evolv’s common stock. In addition, any such failures could result in litigation or regulatory actions by the SEC or other regulatory authorities, loss of investor confidence, delisting of Evolv’s securities and harm to Evolv’s reputation and financial condition, or diversion of financial and management resources from the operation of Evolv’s business.

Evolv performed an analysis and concluded that there was substantial doubt as to its ability to continue as a “going concern.”

Evolv performed an analysis and concluded that there was substantial doubt about its ability to continue as a “going concern.” Management’s plans to address Evolv’s need for capital are discussed in the section of this proxy statement/prospectus titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We cannot assure you that our plans to raise capital or to consummate the Business Combination will be successful. These factors raise substantial doubt about its ability to continue as a going concern. The financial statements contained elsewhere in this proxy statement/prospectus do not include any adjustments that might result from any failure to successfully consummate the Business Combination, complete the PIPE Investment or Evolv’s inability to continue as a going concern.

Evolv’s reported financial results may be adversely affected by changes in accounting principles generally accepted in the United States.

U.S. generally accepted accounting principles (GAAP) are subject to interpretation by the Financial Accounting Standards Board (FASB), the SEC, and various bodies formed to promulgate and interpret appropriate accounting principles. A change in these principles or interpretations could have a significant effect on Evolv’s reported results of operations and could affect the reporting of transactions already completed before the announcement of such change.

Risks Related to Evolv’s and NHIC’s Business

Failure to comply with applicable anti-corruption legislation and other governmental laws and regulations could result in fines, criminal penalties and materially adversely affect its business, financial condition and results of operations.

Both NHIC and Evolv are required to comply with anti-corruption and anti-bribery laws in the jurisdictions in which we operate, including the Foreign Corrupt Practices Act, or FCPA, in the United States, the UK Bribery Act, or the Bribery Act, and other similar laws in other countries in which Evolv does business. As a result of doing business in foreign countries, including through reseller partners and agents, we will be exposed to a risk of violating anti-corruption laws. Some of the international locations in which Evolv will operate have developing legal systems and may have higher levels of corruption than more developed nations. The FCPA prohibits providing anything of value to foreign officials for the purposes of obtaining or retaining business or securing any improper business advantage. It may deal with both governments and state-owned business enterprises, the employees of which are considered foreign officials for purposes of the FCPA. The provisions of the Bribery Act extend beyond bribery of foreign public officials and are more onerous than the FCPA in a number of other respects, including jurisdiction, non-exemption of facilitation payments and penalties.

Although the companies have adopted policies and procedures designed to ensure that they, their respective employees and third-party agents will comply with such laws, there can be no assurance that such policies or procedures will work effectively at all times or protect them against liability under these or other laws for actions taken by its employees, reseller partners and other third parties with respect to its business. If they are not in compliance with anti-corruption laws and other laws governing the conduct of business with government entities and/or officials (including local laws), they may be subject to criminal and civil penalties and other remedial

measures, which could harm its business, financial condition, results of operations, cash flows and prospects. In addition, investigations of any actual or alleged violations of such laws or policies related to us could harm its business, financial condition, results of operations, cash flows and prospects.

The continuation or worsening of the COVID-19 pandemic, or other similar public health developments, could have an adverse effect on business, results of operations, and financial condition.

Both NHIC and Evolv face various risks and uncertainties related to the global outbreak of COVID-19 and the new coronavirus strains or variants that have developed. The continued COVID-19 pandemic has led to disruption and volatility in the global economy and capital markets, which increases the cost of capital and adversely impacts access to capital. Government-enforced travel bans and business closures around the world have significantly impacted our ability to sell, install and service our products especially given the nature of the markets we serve. It has, and may continue to, disrupt third-party contract manufacturer and supply chain. Evolv may also experience customer payment delays for its products which could negatively impact its results of operations. We may also experience some delays in installation of our products at customers’ facilities, which could lead to postponed revenue recognition for those transactions. Furthermore, if significant portions of the workforce are unable to work effectively, including because of illness, quarantines, government actions, facility closures, remote working or other restrictions in connection with the COVID-19 pandemic, operations will likely be adversely impacted.

If the COVID-19 pandemic continues for a prolonged duration, we or our customers may be unable to perform fully on our contracts, which will likely result in increases in costs and reduction in revenue. These cost increases may not be fully recoverable or adequately covered by insurance. The long-term effects of COVID-19 to the global economy and to us are difficult to assess or predict and may include a further decline in the market prices of our products, risks to employee health and safety, risks for the deployment of our products and services and reduced sales in geographic locations impacted. Any prolonged restrictive measures put in place in order to control COVID-19 or other adverse public health developments in any of our targeted markets may have a material and adverse effect on our business operations and results of operations.

Risks Related to NHIC’s Business and the Business Combination

NHIC will be forced to liquidate the Trust Account if it cannot consummate a business combination by the date that is 24 months from the closing of the IPO, or August 4, 2022. In the event of a liquidation, NHIC’s public stockholders will receive $10.00 per share and the NHIC Warrants will expire worthless.

If NHIC is unable to complete a business combination by the date that is 24 months from the closing of the IPO, or August 4, 2022, and is forced to liquidate, the per-share liquidation distribution will be $10.00. Furthermore, there will be no distribution with respect to the NHIC Rights, which will expire worthless as a result of NHIC’s failure to complete a business combination.

You must tender your shares of common stock in order to validly seek redemption at the Meeting of stockholders.

In connection with tendering your shares for redemption, you must elect either to physically tender your share certificates to Continental or to deliver your common stock to Continental electronically using DTC’s DWAC (Deposit/Withdrawal At Custodian) System, in each case at least two business days before the Meeting. The requirement for physical or electronic delivery ensures that a redeeming holder’s election to redeem is irrevocable once the Business Combination is consummated. Any failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the Business Combination.

If third parties bring claims against NHIC, the proceeds held in trust could be reduced and the per-share liquidation price received by NHIC’s stockholders may be less than $10.00.

NHIC’s placing of funds in trust may not protect those funds from third party claims against NHIC. Although NHIC has received from many of the vendors, service providers (other than its independent accountants) and prospective target businesses with which it does business executed agreements waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of NHIC’s public stockholders, they may still seek recourse against the Trust Account. Additionally, a court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of

NHIC’s public stockholders. If NHIC liquidates the Trust Account before the completion of a business combination and distributes the proceeds held therein to its public stockholders, the Sponsor has contractually agreed that it will be liable to ensure that the proceeds in the Trust Account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us, but only if such a vendor or prospective target business does not execute such a waiver. However, NHIC cannot assure you that they will be able to meet such obligation. Therefore, the per-share distribution from the Trust Account for our stockholders may be less than $10.00 due to such claims.

Additionally, if NHIC is forced to file a bankruptcy case or an involuntary bankruptcy case is filed against it which is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in NHIC’s bankruptcy estate and subject to the claims of third parties with priority over the claims of its stockholders. To the extent any bankruptcy claims deplete the Trust Account, NHIC may not be able to return $10.00 to our public stockholders.

Any distributions received by NHIC stockholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, NHIC was unable to pay its debts as they fell due in the ordinary course of business.

NHIC’s Certificate of Incorporation provides that it will continue in existence only until the date that is 24 months from the closing of the IPO, or August 4, 2022. If NHIC is unable to consummate a transaction within the required time periods, upon notice from NHIC, the trustee of the Trust Account will distribute the amount in its Trust Account to its public stockholders. Concurrently, NHIC shall pay, or reserve for payment, from funds not held in trust, its liabilities and obligations, although NHIC cannot assure you that there will be sufficient funds for such purpose.

We expect that all costs and expenses associated with implementing our plan of dissolution, as well as payments to any creditors, will be funded from amounts remaining out of the approximately $1,500,000 of proceeds held outside the trust account, although we cannot assure you that there will be sufficient funds for such purpose. We will depend on sufficient interest being earned on the proceeds held in the trust account to pay any tax obligations we may owe or for working capital purposes (provided that the funds released for working capital purposes may not exceed $250,000 annually). However, if those funds are not sufficient to cover the costs and expenses associated with implementing our plan of dissolution, to the extent that there is any interest accrued in the trust account not required to pay taxes on interest income earned on the trust account balance, we may request the trustee to release to us an additional amount of up to $100,000 of such accrued interest to pay those costs and expenses.

However, we may not properly assess all claims that may be potentially brought against us. As such, our stockholders could potentially be liable for any claims to the extent of distributions received by them (but no more) and any liability of our stockholders may extend well beyond the third anniversary of the date of distribution. Accordingly, third parties may seek to recover from our stockholders amounts owed to them by us.

If, after we distribute the proceeds in the trust account to our public stockholders, we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover all amounts received by our stockholders. In addition, our Board may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith, thereby exposing itself and us to claims of punitive damages, by paying public stockholders from the trust account prior to addressing the claims of creditors.

If NHIC’s due diligence investigation of Evolv was inadequate, then stockholders of NHIC following the Business Combination could lose some or all of their investment.

Even though NHIC conducted a due diligence investigation of Evolv, it cannot be sure that this diligence uncovered all material issues that may be present inside Evolv or its business, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Evolv and its business and outside of its control will not later arise.

Stockholder litigation and regulatory inquiries and investigations are expensive and could harm NHIC’s business, financial condition and operating results and could divert management attention.

In the past, securities class action litigation and/or stockholder derivative litigation and inquiries or investigations by regulatory authorities have often followed certain significant business transactions, such as the sale of a company or announcement of any other strategic transaction, such as the Business Combination. Any stockholder litigation and/or regulatory investigations against NHIC, whether or not resolved in NHIC’s favor, could result in substantial costs and divert NHIC’s management’s attention from other business concerns, which could adversely affect NHIC’s business and cash resources and the ultimate value NHIC’s stockholders receive as a result of the Business Combination.

The Initial Stockholders who own shares of common stock and Private Placement Warrants will not participate in liquidation distributions and, therefore, they may have a conflict of interest in determining whether the Business Combination is appropriate.

As of the Record Date, the Initial Stockholders owned an aggregate of [•] shares of common stock and [•] shares of common stock underlying Private Placement Warrants. They have waived their right to redeem these shares, or to receive distributions with respect to these shares upon the liquidation of the Trust Account if NHIC is unable to consummate a business combination. Based on a market price of $[•] per share of common stock on [•], 2021, the value of these shares was $[•]. The shares of common stock acquired prior to the IPO will be worthless if NHIC does not consummate a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting Evolv as a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of the Business Combination are appropriate and in NHIC’s public stockholders’ best interest.

NHIC is requiring stockholders who wish to redeem their public shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.

NHIC is requiring stockholders who wish to redeem their common stock to either tender their certificates to Continental or to deliver their shares to Continental electronically using the DTC’s DWAC (Deposit/Withdrawal At Custodian) System at least two business days before the Meeting. In order to obtain a physical certificate, a stockholder’s broker and/or clearing broker, DTC and Continental will need to act to facilitate this request. It is NHIC’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from Continental. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, we cannot assure you of this fact. Accordingly, if it takes longer than NHIC anticipates for stockholders to deliver their common stock, stockholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their common stock.

NHIC will require its public stockholders who wish to redeem their public shares in connection with the Business Combination to comply with specific requirements for redemption described above, such redeeming stockholders may be unable to sell their securities when they wish to in the event that the Business Combination is not consummated.

If NHIC requires public stockholders who wish to redeem their public shares in connection with the proposed Business Combination to comply with specific requirements for redemption as described above and the Business Combination is not consummated, NHIC will promptly return such certificates to its public stockholders. Accordingly, investors who attempted to redeem their public shares in such a circumstance will be unable to sell their securities after the failed acquisition until NHIC has returned their securities to them. The market price for shares of our common stock may decline during this time and you may not be able to sell your securities when you wish to, even while other stockholders that did not seek redemption may be able to sell their securities.

If NHIC’s security holders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of NHIC’s securities.

NHIC’s Initial Stockholders are entitled to make a demand that it register the resale of their insider shares at any time commencing three months prior to the date on which their shares may be released from escrow. Additionally, our Initial Stockholders, officers and directors are entitled to demand that NHIC register the resale of the shares underlying any securities our Initial Stockholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us at any time after NHIC consummates a business combination. If such persons exercise their registration rights with respect to all of their securities, then there will be an additional [•] shares of common stock eligible for trading in the public market. The presence of these additional shares of common stock trading in the public market may have an adverse effect on the market price of NHIC’s securities.

NHIC will not obtain an opinion from an unaffiliated third party as to the fairness of the Business Combination to its stockholders.

NHIC is not required to obtain an opinion from an unaffiliated third party that the price it is paying in the Business Combination is fair to its public stockholders from a financial point of view. NHIC’s public stockholders therefore, must rely solely on the judgment of the Board.

If the Business Combination’s benefits do not meet the expectations of financial or industry analysts, the market price of NHIC’s securities may decline.

The market price of NHIC’s securities may decline as a result of the Business Combination if:

•        NHIC does not achieve the perceived benefits of the acquisition as rapidly as, or to the extent anticipated by, financial or industry analysts; or

•        The effect of the Business Combination on the financial statements is not consistent with the expectations of financial or industry analysts.

Accordingly, investors may experience a loss as a result of decreasing stock prices.

NHIC’s directors and officers may have certain conflicts in determining to recommend the acquisition of Evolv, since certain of their interests, and certain interests of their affiliates and associates, are different from, or in addition to, your interests as a shareholder.

NHIC’s management and directors have interests in and arising from the Business Combination that are different from, or in addition to, your interests as a shareholder, which could result in a real or perceived conflict of interest. These interests include the fact that certain of the shares of common stock owned by NHIC’s management and directors, or their affiliates and associates, would become worthless if the Business Combination Proposal is not approved and NHIC otherwise fails to consummate a business combination prior to August 4, 2022 (unless such date has been extended as described herein).

NHIC and Evolv have incurred and expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by NHIC if the Business Combination is completed or by NHIC if the Business Combination is not completed.

NHIC and Evolv expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, NHIC expects to incur approximately $[•] in expenses. These expenses will reduce the amount of cash available to be used for other corporate purposes by NHIC if the Business Combination is completed or by NHIC if the Business Combination is not completed.

NHIC will incur significant transaction costs in connection with transactions contemplated by the Merger Agreement.

NHIC will incur significant transaction costs in connection with the Business Combination. If the Business Combination is not consummated, NHIC may not have sufficient funds to seek an alternative business combination and may be forced to liquidate and dissolve.

The unaudited pro forma condensed combined financial information included in this proxy statement/prospectus may not be indicative of what the Combined Company’s actual financial position or results of operations would have been.

The unaudited pro forma condensed combined financial information in this proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what Combined Company’s actual financial position or results of operations would have been had the Business Combination been completed on the dates indicated. See the section titled “Unaudited Pro Forma Condensed Combined Financial Information” for more information.

In the event that a significant number of public shares are redeemed, our common stock may become less liquid following the Business Combination.

If a significant number of public shares are redeemed, NHIC may be left with a significantly smaller number of stockholders. As a result, trading in the shares of the Combined Company may be limited and your ability to sell your shares in the market could be adversely affected. The Combined Company intends to apply to list its shares on the Nasdaq Stock Market (“Nasdaq”), and Nasdaq may not list the common stock on its exchange, which could limit investors’ ability to make transactions in NHIC’s securities and subject NHIC to additional trading restrictions.

The Combined Company will be required to meet the initial listing requirements to be listed on the Nasdaq Stock Market. However, the Combined Company may be unable to maintain the listing of its securities in the future.

If the Combined Company fails to meet the continued listing requirements and Nasdaq delists its securities, NHIC could face significant material adverse consequences, including:

•        a limited availability of market quotations for its securities;

•        a limited amount of news and analyst coverage for the company; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

NHIC may waive one or more of the conditions to the Business Combination without resoliciting shareholder approval for the Business Combination.

NHIC may agree to waive, in whole or in part, some of the conditions to its obligations to complete the Business Combination, to the extent permitted by applicable laws. The Board will evaluate the materiality of any waiver to determine whether amendment of this proxy statement/prospectus and resolicitation of proxies is warranted. In some instances, if the Board determines that a waiver is not sufficiently material to warrant resolicitation of stockholders, NHIC has the discretion to complete the Business Combination without seeking further shareholder approval. For example, it is a condition to NHIC’s obligations to close the Business Combination that there be no restraining order, injunction or other order restricting Evolv’s conduct of its business, however, if the Board determines that any such order or injunction is not material to the business of Evolv, then the Board may elect to waive that condition without shareholder approval and close the Business Combination.

NHIC’s stockholders will experience immediate dilution as a consequence of the issuance of common stock as consideration in the Business Combination. Having a minority share position may reduce the influence that NHIC’s current stockholders have on the management of NHIC.

After the Business Combination, assuming no redemptions of public shares for cash, NHIC’s current public stockholders will own approximately [•]% of NHIC’s non-redeemable shares, NHIC’s current directors, officers and affiliates will own approximately [•]% of NHIC’s non-redeemable shares, and the former stockholders of Evolv will own approximately [•]% of NHIC’s non-redeemable shares. Assuming redemption by holders of [•] outstanding public shares, NHIC public stockholders will own approximately [•]% of NHIC’s non-redeemable shares, NHIC’s current directors, officers and affiliates will own approximately [•]% of NHIC’s non-redeemable shares, and the former stockholders of Evolv will own approximately [•]% of NHIC’s non-redeemable shares. The minority position of the former NHIC stockholders will give them limited influence over the management and operations of the Combined Company.

Risks Related to Combined Company’s Common Stock

The market price of the Combined Company’s common stock is likely to be highly volatile, and you may lose some or all of your investment.

Following the Business Combination, the market price of Combined Company’s common stock is likely to be highly volatile and may be subject to wide fluctuations in response to a variety of factors, including the following:

•        the impact of COVID-19 pandemic on Evolv’s business;

•        the inability to obtain or maintain the listing of the Combined Company’s shares of common stock on Nasdaq;

•        the inability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, Evolv’s ability to grow and manage growth profitably, and retain its key employees;

•        changes in applicable laws or regulations;

•        risks relating to the uncertainty of Evolv’s projected financial information;

•        risks related to the organic and inorganic growth of Evolv’s business and the timing of expected business milestones; and

•        the amount of redemption requests made by NHIC’s stockholders.

In addition, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political, regulatory and market conditions, may negatively affect the market price of the Combined Company’s common stock, regardless of the Combined Company’s actual operating performance.

Volatility in the Combined Company’s share price could subject the Combined Company to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. If the Combined Company faces such litigation, it could result in substantial costs and a diversion of management’s attention and resources, which could harm its business.

If securities or industry analysts do not publish research or reports about the Combined Company, or publish negative reports, the Combined Company’s stock price and trading volume could decline.

The trading market for the Combined Company’s common stock will depend, in part, on the research and reports that securities or industry analysts publish about the Combined Company. The Combined Company does not have any control over these analysts. If the Combined Company’s financial performance fails to meet analyst estimates or one or more of the analysts who cover the Combined Company downgrade its common stock or change their opinion, the Combined Company’s stock price would likely decline. If one or more of these analysts cease coverage of the Combined Company or fail to regularly publish reports on the Combined Company, it could lose visibility in the financial markets, which could cause the Combined Company’s stock price or trading volume to decline.

Because the Combined Company does not anticipate paying any cash dividends in the foreseeable future, capital appreciation, if any, would be your sole source of gain.

The Combined Company currently anticipates that it will retain future earnings for the development, operation and expansion of its business and do not anticipate declaring or paying any cash dividends for the foreseeable future. As a result, capital appreciation, if any, of the Combined Company’s shares of common stock would be your sole source of gain on an investment in such shares for the foreseeable future.

Future sales of shares of the Combined Company’s common stock may depress its stock price.

Sales of a substantial number of the Combined Company’s common stock in the public market after the closing of the Business Combination, or the perception that these sales might occur, could depress the market price of the Combined Company’s common stock and could impair its ability to raise capital through the sale of additional equity securities.

The Combined Company is an emerging growth company, and the Combined Company cannot be certain if the reduced reporting requirements applicable to emerging growth companies will make its shares less attractive to investors.

After the completion of the Business Combination, the Combined Company will be an emerging growth company, as defined in the JOBS Act. For as long as the Combined Company continues to be an emerging growth company, it may take advantage of exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including exemption from compliance with the auditor attestation requirements of Section 404, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. The Combined Company will remain an emerging growth company until the earlier of (1) the date (a) June 9, 2025, (b) in which the Combined Company has total annual gross revenue of at least $1.07 billion or (c) in which the Combined Company is deemed to be a large accelerated filer, which means the market value of shares of the Combined Company’s common stock that are held by non-affiliates exceeds $700 million as of the prior June 30th, and (2) the date on which the Combined Company has issued more than $1.0 billion in non-convertible debt during the prior three-year period.

In addition, under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to private companies. The Combined Company has elected to use this extended transition period for complying with new or revised accounting standards and, therefore, the Combined Company will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

Even after the Combined Company no longer qualifies as an emerging growth company, it may still qualify as a “smaller reporting company,” which would allow it to take advantage of many of the same exemptions from disclosure requirements including exemption from compliance with the auditor attestation requirements of Section 404 and reduced disclosure obligations regarding executive compensation in this proxy statement/prospectus and the Combined Company’s periodic reports and proxy statements.

The Combined Company cannot predict if investors will find its common stock less attractive because the Combined Company may rely on these exemptions. If some investors find the Combined Company’s common stock less attractive as a result, there may be a less active trading market for the common stock and its market price may be more volatile.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

•        you may send another proxy card with a later date;

•        if you are a record holder, you may notify our proxy solicitor, [PROXY SOLICITOR’S NAME], in writing before the Meeting that you have revoked your proxy; or

•        you may participate in the virtual Meeting, revoke your proxy, and vote during the virtual Meeting, as indicated above.

Who Can Answer Your Questions About Voting Your Shares

If you have any questions about how to vote or direct a vote in respect of your shares of common stock, you may contact [PROXY SOLICITOR’S NAME], our proxy solicitor as follows:

[PROXY SOLICITOR’S NAME AND CONTACT]

No Additional Matters May Be Presented at the Meeting

This Meeting has been called only to consider the approval of the Business Combination Proposal, the Charter Approval Proposal, the Stock Plan Proposal, the Nasdaq Proposal and the Adjournment Proposal. Under our Certificate of Incorporation, other than procedural matters incident to the conduct of the Meeting, no other matters may be considered at the Meeting if they are not included in the notice of the Meeting.

Approval of the Business Combination Proposal, the Stock Plan Proposal, the Nasdaq Proposal, and the Adjournment Proposal will each require the affirmative vote of the holders of a majority of the issued and outstanding shares of common stock present in person by virtual attendance or represented by proxy and entitled to vote at the Meeting or any adjournment thereof.

Redemption Rights

Pursuant to our Certificate of Incorporation, a holder of public shares may demand that NHIC redeem such shares for cash in connection with a business combination. You may not elect to redeem your shares prior to the completion of a business combination.

If you are a public stockholder and you seek to have your shares redeemed, you must submit your request in writing that we redeem your public shares for cash no later than [•], Eastern time on [•], 2021 (at least two business days before the Meeting). The request must be signed by the applicable stockholder in order to validly request redemption. A stockholder is not required to submit a proxy card or vote in order to validly exercise redemption rights. The request must identify the holder of the shares to be redeemed and must be sent to Continental at the following address:

Continental Stock Transfer & Trust Company

1 State Street, 30th floor
New York, NY 10004
Attention: ________
Email: ________________

You must tender the public shares for which you are electing redemption at least two business days before the Meeting by either:

•        Delivering certificates representing shares of common stock to Continental, or

•        Delivering the shares of common stock electronically through the DWAC system.

Any corrected or changed written demand of redemption rights must be received by Continental at least two business days before the Meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to Continental at least two business days prior to the vote at the Meeting.

Public stockholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of shares of common stock as of the Record Date. Any public stockholder who holds shares of NHIC on or before [•], 2021 (at least two business days before the Meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, at the consummation of the Business Combination.

In connection with tendering your shares for redemption, you must elect either to physically tender your share certificates to Continental or deliver your shares to Continental electronically using DTC’s DWAC (Deposit/Withdrawal At Custodian) System, in each case, at least two business days before the Meeting.

If you wish to tender through the DWAC system, please contact your broker and request delivery of your shares through the DWAC system. Delivering shares physically may take significantly longer. In order to obtain a physical stock certificate, a stockholder’s broker and/or clearing broker, DTC, and Continental will need to act together to facilitate this request. It is NHIC’s understanding that stockholders should generally allot at least two weeks to obtain physical certificates from Continental. NHIC does not have any control over this process or over the brokers or DTC, and it may take longer than two weeks to obtain a physical stock certificate. Stockholders who request physical stock certificates and wish to redeem may be unable to meet the deadline for tendering their shares of common stock before exercising their redemption rights and thus will be unable to redeem their shares of common stock.

In the event that a stockholder tenders its shares of common stock and decides prior to the consummation of the Business Combination that it does not want to redeem its shares of common stock, the stockholder may withdraw the tender. In the event that a stockholder tenders shares of common stock and the business combination is not completed, these shares will not be redeemed for cash and the physical certificates representing these shares will be returned to the stockholder promptly following the determination that the Business Combination will not be consummated. NHIC anticipates that a stockholder who tenders shares of common stock for redemption in connection with the vote to approve the Business Combination would receive payment of the redemption price for such shares of common stock soon after the completion of the Business Combination.

If properly demanded by NHIC’s public stockholders, NHIC will redeem each share into a pro rata portion of the funds available in the Trust Account, calculated as of two business days prior to the anticipated consummation of the Business Combination. As of [•], 2021, this would amount to approximately $10.00 per share. If you exercise your redemption rights, you will be exchanging your shares of common stock for cash and will no longer own the shares of common stock.

Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)-(3) of the Exchange Act will be restricted from seeking redemption rights with respect to more than 20% of the shares of common stock.

If too many public stockholders exercise their redemption rights, we may not be able to meet certain closing conditions, and as a result, would not be able to proceed with the Business Combination.

Appraisal Rights

Appraisal rights are not available to holders of shares of common stock in connection with the proposed Business Combination.

Proxies and Proxy Solicitation Costs

NHIC is soliciting proxies on behalf of the Board. This solicitation is being made by mail but also may be made by telephone or in person. NHIC and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Any solicitation made and information provided in such a solicitation will be consistent with the written proxy statement/prospectus and proxy card. NHIC will bear the cost of solicitation. [PROXY SOLICITOR’S NAME], a proxy solicitation firm that NHIC has engaged to assist it in soliciting proxies, will be paid its customary fee of approximately $[•] and be reimbursed out-of-pocket expenses.

NHIC will ask banks, brokers and other institutions, nominees and fiduciaries to forward its proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. NHIC will reimburse them for their reasonable expenses.

PROPOSAL nO. 1 — THE BUSINESS COMBINATION PROPOSAL

We are asking our stockholders to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby. Our stockholders should read carefully this proxy statement/prospectus in its entirety, including the subsection below titled “The Merger Agreement,” for more detailed information concerning the Merger and the terms and conditions of the Merger Agreement. We also urge our stockholders to read carefully the Merger Agreement in its entirety before voting on this proposal. A copy of the Merger Agreement is attached as Annex A to this proxy statement.

General

On March 5, 2021, NewHold Investment Corp., a Delaware corporation (“NewHold”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) by and among NewHold, NHIC Sub Inc., a Delaware corporation and a wholly owned subsidiary of NewHold (“Merger Sub”), and Evolv Technologies, Inc. dba Evolv Technology, Inc., a Delaware corporation (“Evolv”). Pursuant to the terms of the Merger Agreement, a business combination between NewHold and Evolv will be effected through the merger of Merger Sub with and into Evolv, with Evolv surviving the merger as a wholly owned subsidiary of NewHold (the “Merger”). The Board of Directors of NewHold (the “Board”) has unanimously (i) approved and declared advisable the Merger Agreement, the Merger and the other transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related matters by the stockholders of NewHold.

The Merger Agreement

The following is a summary of the material terms of the Merger Agreement. The following summary does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached as Annex A to this proxy statement.

The Merger Agreement contains representations and warranties that NHIC and Merger Sub, on the one hand, and Evolv, on the other hand, have made to one another as of specific dates. The assertions embodied in the representations and warranties are qualified by information in confidential disclosure schedules exchanged by the parties. Some of these schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Merger Agreement. You should not rely on the representations and warranties described below as current characterizations of factual information about NHIC or Evolv, because they were made as of specific dates, may be intended merely as a risk allocation mechanism between NHIC and Merger Sub, and Evolv and are modified by the disclosure schedules.

Merger Consideration

Pursuant to the terms of the Merger Agreement, the outstanding securities of Evolv will be converted into the merger consideration as follows:

Preferred Stock.    Immediately prior to the effective time of the Merger (the “Effective Time”) and subject to the consent of the holders of Evolv’s preferred stock, par value $0.001 per share (, the “Evolv Preferred Stock”), each issued and outstanding share of Evolv Preferred Stock shall be converted into shares of the common stock, par value $0.001 per share, of Evolv (the “Evolv Common Stock”) at the then-applicable conversion rates.

Convertible Notes.    Immediately prior to the Effective Time, each issued and outstanding convertible promissory note of Evolv (the “Evolv Convertible Notes”) will be automatically converted into shares of Evolv Common Stock in accordance with the then-applicable conversion rates.

Warrants.    With the exception of a warrant to purchase 6,756,653 shares of Evolv Common Stock (the “Finback Warrant”), immediately prior to the Effective Time, Evolv shall cause each outstanding warrant to purchase shares of Evolv capital stock to be exercised in full on a cash or cashless basis or terminated without exercise. With respect to the Finback Warrant, the portion that is vested immediately prior to the Effective Time shall be either exercised in full on a cash or cashless basis or terminated as of the Effective Time, while the portion that is unvested as of immediately prior to the Effective Time shall be automatically converted into a warrant to purchase

shares of the NHIC common stock, par value $0.0001 per share, of NewHold (the “NewHold Common Stock”), proportionately adjusted for the Exchange Ratio (as defined below). All Evolv warrants that are converted into shares of Evolv Common Stock are hereafter referred to as the “Evolv Warrants.”

Common Stock.    At the Effective Time, each share of Evolv Common Stock (including shares outstanding as a result of the conversion of the Evolv Preferred Stock, the Evolv Convertible Notes and the Evolv Warrants but excluding shares the holders of which perfect rights of appraisal under Delaware law) will be converted into the right to receive such number of shares of NewHold Common Stock equal to the Exchange Ratio and a number of Earn-Out Shares (as defined below). The Exchange Ratio is defined in the Merger Agreement to be 125,000,000 divided by the number of outstanding shares of Evolv Common Stock and options to purchase shares of Evolv Common Stock as of immediately prior to the Effective Time, after giving effect to the conversion of the Evolv Preferred Stock, Evolv Convertible Notes and Evolv Warrants and as further adjusted pursuant to the Merger Agreement.

Treatment of Evolv Stock Options

Prior to the Effective Time, each outstanding option to purchase shares of Evolv’s common stock (a “Evolv Option”), whether vested or unvested, shall, automatically and without any required action on the part of the holder thereof, cease to represent an option to purchase shares of Evolv common stock and shall be converted into (i) an option to purchase such number of shares of NHIC’s common stock determined in accordance with Section 2.1(c) of the Merger Agreement (each, an “Assumed Option”), and (ii) the right to receive a number of earn-out Shares in accordance with Section 2.8 of the Merger Agreement. Each Assumed Option shall represent an option to purchase a number of shares of NHIC’s common stock proportionately adjusted for the Exchange Ratio. No certificates or scrip representing fractional shares of NHIC’s Common Stock will be issued pursuant to the Merger. Stock certificates evidencing the Merger Consideration shall bear restrictive legends as required by any securities laws in effect at the time of the Merger.

Directors and Executive Officers of the Combined Company Following the Merger

All of the directors on the Board shall resign at the Closing. [•] will resign as Class [•] director upon the Closing and [•] for the purpose of this proxy statement. The Combined Company’s Board of Directors will be comprised of [•] directors, of which [•] and the remaining [•] directors will be designated by Evolv.

Conditions to the Closing of the Merger

Each party’s obligation to complete the merger is subject to the satisfaction or waiver by each of the parties, at or prior to the closing of the Merger, of various conditions, which include, in addition to other customary closing conditions, the following:

Mutual Conditions

•        NHIC stockholders shall have approved all of the proposals at the Special Meeting;

•        the requisite approval of the stockholders of Evolv shall have been obtained;

•        all waiting periods (and any extensions thereof) applicable to the consummation of the transactions under the HSR Act shall have expired or been earlier terminated;

•        no governmental entity shall have enacted or issued, any law or governmental order (whether temporary, preliminary or permanent) that is in effect and restrains, enjoins, makes illegal or otherwise prohibits the consummation of the transactions contemplated by the Merger Agreement

•        the Registration Statement shall have become effective in accordance with the provisions of the Securities Act; no stop order suspending the effectiveness shall have been issued and remain in effect, and no proceedings for that purpose shall have commenced or be threatened by the SEC.

•        The transaction documents shall be in full force and effect and shall not have been rescinded by any of the parties thereto.

•        NHIC shall have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act).

Additional Conditions to NHIC and Merger Sub’s Obligations to Close

The obligation of NHIC and Merger Sub to complete the Merger is further subject to the satisfaction or waiver of the following additional conditions:

•        certain fundamental representations and warranties of Evolv that are qualified by materiality or material adverse effect standards shall be true and correct in all respects as of the date of the Merger Agreement and shall be true and correct on the Closing Date, except for the fundamental representations made as of an earlier date or time, which need be true and correct only as of such earlier date or time

•        certain representations of Evolv, other than the fundamental representations, shall be true and correct as of the date of the Merger Agreement and shall be true and correct on the Closing Date except (i) for representations and warranties that speak as of a specific date or time (which need be true and correct only as of such date or time) and (ii) for breaches of such representations and warranties that, in the aggregate, would not have a material adverse effect;

•        Evolv shall have performed in all material respects all obligations required to be performed by it under the Merger Agreement at or prior to the Closing Date;

•        NHIC and Merger Sub shall have received a certificate attesting to the satisfaction of the foregoing conditions;

•        Evolv shall have delivered a counterpart of each of the transaction documents to which it is a party to NHIC.

•        Evolv shall have obtained the consent, in writing, of the requisite number of holders of convertible notes to the conversion of the notes in accordance with the Merger Agreement.

•        Evolv shall have obtained the consent to or approval from all holders of the settlement of its outstanding warrants in writing.

•        Evolv shall have obtained the consent of J.P. Morgan Chase Bank, N.A. (“JPM”) to the transactions, or waiver by JPM of (i) Section 6.03 of that certain Credit Agreement, dated as of December 3, 2020, by and between Evolv and JPM (the “JPM Credit Agreement”) and (ii) any other section of the JPM Credit Agreement that would be violated by virtue of Evolv entering into the transactions.

Additional Conditions to Evolv’s Obligation to Close

The obligation of Evolv to complete the Merger is further subject to the satisfaction or waiver of the following additional conditions:

•        certain fundamental representations and warranties of NHIC and Merger Sub that are qualified by materiality or material adverse effect standards shall be true and correct in all respects as of the date of the Merger Agreement and shall be true and correct on the Closing Date, except for the fundamental representations made as of an earlier date or time, which need be true and correct only as of such earlier date or time;

•        certain representations of NHIC and Merger Sub, other than the fundamental representations, shall be true and correct as of the date of the Merger Agreement and shall be true and correct on the Closing Date except (i) for representations and warranties that speak as of a specific date or time (which need be true and correct only as of such date or time) and (ii) for breaches of such representations and warranties that, in the aggregate, would not have a material adverse effect;

•        each of NHIC and Merger Sub shall have performed in all material respects all obligations required to be performed by it under the Merger Agreement at or prior to the Closing Date;

•        Evolv shall have received a certificate certifying that the foregoing conditions have been satisfied;

•        certain specified directors and executive officers of NHIC shall have been removed from their respective positions or tendered their irrevocable resignations, in each case effective as of the Effective Time;

•        NHIC’s cash balance (after giving effect to funds received from the PIPE investors) shall equal or exceed $200,000,000 (after giving effect to any redemptions exercised by NHIC stockholders in connection with the Redemption Offer), and NHIC shall have made all arrangements necessary, proper or advisable for the funds in the NHIC Trust Account to be released upon Closing in accordance the Merger Agreement;

•        the shares of NHIC common stock issuable to the holders of shares of Evolv common stock pursuant to the Merger Agreement shall have been authorized for listing on NASDAQ upon official notice of issuance;

•        NHIC shall have delivered a counterpart of each of the Transaction Documents to which it is a party to Evolv; and

•        NHIC shall have formed and funded a public benefit corporation, such public benefit corporation shall be funded by, among other means, a commitment by NHIC of 517,500 shares of NHIC Class B Common Stock which shall be a wholly-owned subsidiary of NHIC, to be administered by the Board to promote the core mission of Evolv, making public venues, including offices, hospitals, and education and medical facilities, safer for all patrons, and other charitable efforts

Representations and Warranties

The Merger Agreement contains customary representations and warranties of the parties thereto with respect to, among other things, (a) entity organization, good standing and qualification, (b) capital structure, (c) authorization to enter into the Merger Agreement, (d) compliance with laws and permits, (e) taxes, (f) financial statements and internal controls, (g) real and personal property, (h) material contracts, (i) environmental matters, (j) absence of changes, (k) employee matters, (l) litigation, and (m) brokers and finders.

The representations and warranties are, in many respects, qualified by materiality and knowledge, and will not survive the Merger, but their accuracy forms the basis of some of the conditions to the obligations of NHIC, Merger Sub and Evolv to complete the Merger.

Covenants; Conduct of Business Pending the Merger

Evolv has agreed that, except as permitted by the Merger Agreement and the disclosure schedules, as required by law, or unless NHIC shall have provided written consent, during the period commencing on the date of the Merger Agreement and continuing until the closing of the merger, Evolv shall (i) use commercially reasonable efforts to (a) conduct its business in the ordinary course, and (b) preserve its goodwill, keep available the services of its officers and employees, and maintain satisfactory relationships with customers and vendors, its top suppliers, customers and executive officers and (ii) shall not:

•        adopt or propose any change in its or its subsidiaries’ organizational documents;

•        merge or consolidate itself or any of its subsidiaries with any other entity, except for transactions among its wholly owned subsidiaries;

•        adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Evolv or its Subsidiaries;

•        acquire assets outside of the ordinary course of business with a value or purchase price in the aggregate in excess of $100,000;

•        acquire any business or entity (whether by merger or consolidation, by purchase of substantially all assets or equity interests or by any other manner);

•        sell, lease, license or otherwise dispose of any of its material assets or properties (other than Intellectual Property), except for sales, leases and licenses in the ordinary course of business and for sales, leases, licenses with a fair market value not in excess of $100,000 in the aggregate or pursuant to existing contracts;

•        except pursuant to awards granted under its stock plan, issue, sell, grant or authorize the issuance, sale or grant of any shares of capital stock or other securities of the Evolv or any of its subsidiaries or intra-company transactions;

•        reclassify, split, combine, subdivide, redeem or repurchase, any of its capital stock or options, warrants or securities convertible or exchangeable into or exercisable for any shares of its capital stock, except in connection with the net exercise or settlement of awards under the Evolv’s Stock Plan;

•        declare, set aside, make or pay any dividend or distribution of any kind, payable with respect to any of its capital stock or enter into any voting agreement;

•        make any loans, advances, guarantees or capital contributions to or investments in any entity (other than it or any direct or indirect wholly-owned subsidiary), other than in the ordinary course of business;

•        incur any indebtedness for borrowed money or guarantee any such indebtedness of another person or entity, or issue or sell any debt securities or warrants or other rights to acquire any debt security, except for indebtedness incurred in the ordinary course of business consistent with past practice, not to exceed $100,000 in the aggregate;

•        make or commit to make capital expenditures other than in an amount not in excess of $250,000, in the aggregate;

•        enter into any contract that would have been a material contract had it been entered into prior to the date of the Merger Agreement, other than in the ordinary course of business;

•        amend or modify in any material respect or terminate any material contract, or waive or release any material rights, claims or benefits under any material contract, in each case, other than in the ordinary course of business;

•        make any material changes with respect to its accounting policies or procedures, except as required by changes in law or GAAP;

•        settle any proceeding, except in the ordinary course of business or where such settlement is covered by insurance or involves only the payment of monetary damages in an amount not more than $375,000 in the aggregate;

•        except in the ordinary course of business consistent with past practice, file any material amended tax return, make, revoke or change any material tax election in a manner inconsistent with past practice, adopt or change any material tax accounting method or period, enter into any agreement with a governmental entity with respect to material taxes, settle or compromise any examination, audit or other action with a governmental entity of or relating to any material taxes or settle or compromise any claim or assessment by a governmental entity in respect of material taxes, or enter into any tax sharing or similar agreement (excluding any commercial contract not primarily related to taxes), in each case, to the extent such action could reasonably be expected to have any adverse and material impact on NHIC;

•        except in the ordinary course of business or pursuant to the terms of any benefit plan in effect as of the date of the Merger Agreement or as required by law, (A) increase the annual salary or consulting fees or target annual cash bonus opportunity, of any employee with an annual salary or consulting fees and target annual cash bonus opportunity in excess of $250,000 as of the date of the Merger Agreement, become a party to, establish, adopt, amend, or terminate any material benefit plan or any arrangement that would have been a material benefit plan had it been entered into prior to the date of the Merger Agreement, take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any benefit plan,

•        forgive any loans or issue any loans (other than routine travel advances issued in the ordinary course of business) to any employee, hire any employee or engage any independent contractor (who is a natural person) with annual salary or consulting fees and target annual cash bonus opportunity in excess of $250,000 or terminate the employment of any executive officer other than for cause;

•        sell, assign, lease, exclusively license, pledge, encumber, divest, abandon, allow to lapse or expire any material intellectual property, other than grants of non-exclusive licenses in the ordinary course of business to customers for use of the products or services of Evolv or otherwise in the ordinary course of business;

•        become a party to, establish, adopt, amend, commence participation in or enter into any collective bargaining or other labor union contract;

•        fail to use commercially reasonable efforts to keep current and in full force and effect, or to comply with the requirements of, or to apply for or renew, any permit, approval, authorization, consent, license, registration or certificate issued by any governmental entity that is material to the conduct of its business, taken as a whole;

•        file any prospectus supplement or registration statement or consummate any offering of securities that requires registration under the Securities Act or that includes any actual or contingent commitment to register such securities under the Securities Act in the future;

•        fail to maintain, cancel or materially change coverage under, in a materially detrimental manner, any insurance policy maintained with respect to Evolv and its subsidiaries and their assets and properties;

•        enter into any material new line of business outside of the business currently conducted by the it as of the date of the Merger Agreement; or

•        agree or authorize to do any of the foregoing.

NHIC has agreed that, except as permitted by the Merger Agreement, as required by law or unless NHIC shall have provided written consent, during the period commencing on the date of the Merger Agreement and continuing until the earlier to occur of the closing of the Merger and the termination of the Merger Agreement, each of NHIC and its subsidiaries will conduct its business and operations in the ordinary course of its normal operations and consistent with its past practices and in compliance with all applicable laws, regulations and certain material contracts. NHIC has also agreed that, subject to certain limited exceptions, without the written consent of Evolv, it will not, and will not permit any of its subsidiaries to, during the period commencing on the date of the Merger Agreement and continuing until the earlier to occur of the closing of the Merger and the termination of the Merger Agreement:

•        change, modify or amend, or seek any approval from its stockholders to change, modify or amend, the Trust Agreement, its amended and restated certificate of incorporation or bylaws or the Documents or the organizational documents of Merger Sub;

•        declare or pay any dividends on, or make any other distributions of any form in respect of any of its outstanding capital stock

•        split, combine, reclassify or otherwise change any of its capital stock;

•        repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, other than the redemption of any shares of NHIC common stock except as required by its organizational documents;

•        enter into, or permit any of the assets owned or used by it to become bound by any new material contract;

•        enter into, renew or amend in any material respect, any transaction or contract with an affiliate of NHIC or Merger Sub;

•        incur or assume, directly or indirectly any debt or guarantee any debt of another;

•        make any loans, advances, guarantees or capital contributions to anyone other than to Evolv or a wholly-owned subsidiary;

•        make any changes with respect to its accounting policies or procedures except as may be required by law or GAAP;

•        issue, sell, grant or authorize the issuance, sale or grant of any shares of capital stock or other securities of NHIC or any subsidiary or any options or other similar rights entitling its holder to receive or acquire any shares of capital stock or other securities of NHIC or any of its subsidiaries, other than in connection with the exercise of any warrants outstanding on the date of the Merger Agreement;

•        amend, modify or waive any of the terms or rights set forth in any warrant or the warrant agreement;

•        adopt or amend any employee benefit plan or enter into any employment contract or collective bargaining agreement or hire any employee or any other individual to provide services to NHIC following the Closing;

•        except in the ordinary course of business consistent with past practice, file any material amended tax return, make, revoke or change any material tax election, adopt or change any material tax accounting method or period;

•        enter into any agreement with a governmental entity with respect to material taxes, settle or compromise any examination, audit, claim or assessment or other action with a governmental entity of or relating to any material taxes or settle or enter into any tax sharing agreement;

•        merge or consolidate with, or purchase any assets or equity securities of, any entity or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation or restructuring;

•        make any capital expenditures;

•        make any loans, advances or capital contributions to, or investments in, any other person or entity (including to any of its officers, directors, agents or consultants), make any change in its existing borrowing or lending arrangements , or enter into any “keep well” or similar agreement to maintain the financial condition of any other person;

•        enter into any new line of business; or

•        agree or authorize to do any of the foregoing.

Non-Solicitation Restrictions; Duty to Recommend

Each of NHIC and Evolv has agreed that from the date of the Merger Agreement to the Effective Time or, if earlier, the valid termination of the Merger Agreement in accordance with its terms, it will not initiate any negotiations with any party, or provide non-public information or data concerning it or its subsidiaries to any party relating to an Acquisition Proposal or Alternative Transaction (as such terms are defined in the Merger Agreement) or enter into any agreement relating to such a proposal. Each of NHIC and Evolv has also agreed to use its reasonable best efforts to prevent any of its representatives from doing the same.

NHIC also agreed to recommend in this proxy statement/prospectus that stockholders approve the Business Combination and the other proposals being presented at the Special Meeting.

Termination of the Merger Agreement

The Merger Agreement may be terminated at any time prior to the Effective Time as follows:

•        by mutual written consent of NHIC and Evolv;

•        by either NHIC or Evolv if the other party has breached any of its covenants or representations and warranties such that closing conditions would not be satisfied at the Closing (subject to a 30-day cure period);

•        by either NHIC or Evolv if the transactions are not consummated on or before September 6, 2021, provided that the failure to consummate the transaction by that date is not due to a material breach by the party seeking to terminate and which such breach is the proximate cause for the conditions to close not being satisfied;

•        by either NHIC or Evolv if a governmental entity shall have issued a law or final, non-appealable governmental order, rule or regulation permanently enjoining or prohibiting the consummation of the Merger, provided that, the party seeking to terminate cannot have breached its obligations under the Merger Agreement and such breach has proximately contributed to the governmental action;

•        by either NHIC or Evolv if the other party has breached its representations, warranties, covenants or agreements in the Merger Agreement such that the conditions to closing cannot be satisfied and such breach cannot be cured by September 6, 2021 provided that the party seeking to breach is not itself in breach of the Merger Agreement;

•        by written notice from NHIC to Evolv if the Evolv stockholders do not approve the merger agreement due to the failure of Evolv to hold a stockholder vote; or

•        by written notice from Evolv to NHIC if the NHIC board shall have publicly withdrawn, modified or changed in an adverse manner its recommendation to vote in favor of the merger and other proposals.

The foregoing summary of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the actual Merger Agreement, which is filed as Annex A hereto, and which is incorporated by reference in this report. Terms used herein as defined terms and not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement.

Certain Related Agreements

Sponsor Support Agreement.    In connection with the execution of the Merger Agreement, NewHold Industrial Technology Holdings LLC (the “Sponsor”) entered into a support agreement (the “Support Agreement”) with Evolv pursuant to which to which the Sponsor has agreed to vote all shares of NHIC common stock beneficially owned by it in favor of the Merger.

Amended and Restated Insider Letter Agreement.    In connection with the execution of the Merger Agreement, NHIC, the Sponsor, members of NHIC’s Board and certain other individuals (collectively, the “Insiders”) who hold Class B common shares of NHIC (the “Founder Shares”) and Evolv entered into an amended and restated insider letter agreement (the “Letter Agreement”), which provides, among other things, that the certain Founder Shares (and any shares of NHIC common stock issuable upon conversion thereof) shall be subject to certain share-performance-based vesting provisions described below. Fifty percent of the Founder Shares shall vest at the closing of the Merger, 25% of the Founder Shares shall vest on or before the fifth anniversary of the Closing if the closing share price of the common stock equals or exceeds $12.50 over any 20 trading days within a 30-day trading period and the remaining 25% will vest on or before the fifth anniversary of the Closing if the closing share price of the common stock equals or exceeds $15.00 over any 20 trading days within any 30-day trading period. Further, the Sponsor and the Insiders have agreed, subject to exceptions, not to transfer any unvested Founder Shares prior to the date such securities become vested. The Letter Agreement also provides that neither the Sponsor nor the Insiders will redeem any shares of NHIC common stock owned by such persons in connection with the Merger.

Subscription Agreements.    In connection with the execution of the Merger Agreement, NHIC entered into subscription agreements (collectively, the “Subscription Agreements”) with certain parties subscribing for shares of NHIC common stock (the “Subscribers”) pursuant to which the Subscribers have agreed to purchase, and NHIC has agreed to sell to the Subscribers, an aggregate of 30,000,000 shares of NHIC common stock, for a purchase price of $10.00 per share and an aggregate purchase price of $300,000,000. The obligations to consummate the transactions contemplated by the Subscription Agreements are conditioned upon, among other things, customary closing conditions and the consummation of the transactions contemplated by the Merger Agreement.

Registration Rights Agreement.    In connection with the Closing, Evolv, NHIC and certain stockholders of each of Evolv and NHIC who will receive shares of NHIC common stock pursuant to the Merger Agreement, will enter into a registration rights agreement (“Registration Rights Agreement”) mutually agreeable to NHIC and Evolv, which will become effective upon the consummation of the Merger.

Stockholder Agreement.    In connection with the execution of the Merger Agreement, NHIC and Motorola Solutions, Inc. (“Motorola”), an existing stockholder of Evolv, entered into a Stockholder Agreement (the “Stockholder Agreement”) pursuant to which NHIC agreed to nominate an individual designated by Motorola to the Board of Directors of the combined company, effective as of immediately prior to the Closing. Such designee will continue to be nominated at each subsequent stockholder meeting up until the expiration or termination of the Distributor Agreement, dated December 23, 2020 and amended on March 4, 2021, by and between Evolv and Motorola.

Indemnification Agreements.    In connection with the Closing, NHIC has agreed to enter into customary indemnification agreements, in form and substance reasonably acceptable to NHIC and Evolv, with the individuals who will be nominated and, subject to stockholder approval, elected to NHIC’s board of directors effective as of the Closing.

Background of the Business Combination

Immediately after the closing of the IPO, the officers and directors of NHIC began to contact potential targets for a business combination. In addition, NHIC was contacted by a number of individuals and entities with respect to business combination opportunities. NHIC believes that its management team has a unique combination of experience as investors in industrial technology businesses with a special focus on those sectors which industry structure is being reshaped by technology. Because of this combination of strengths, NHIC was able to rapidly and efficiently evaluate a wide range of potential merger targets, to identify those that met its transactional criteria, and then to quickly submit proposals for a merger. The transactional criteria for the NHIC management team included: (1) that the target is focused on leading-edge technologies and applications; (2) that the target has disruptive technology that is able to be commercialized broadly; (3) that the target has strong revenue growth with attractive margins; and (4) that the market for the sector is significant and growing.

Between August 1, 2020 and February 8, 2021, NHIC reviewed on some level approximately 196 potential merger targets and submitted 6 preliminary proposals to certain of these potential targets, including Evolv. For the rest of the 190 potential targets, NHIC did not provide formal proposals for a variety of reasons, including the lack of innovative technologies, unresponsiveness, early-stage technological development, or a management team that was not ready to run a public company. The NHIC team held frequent discussions regarding various targets during this period both internally and externally with potential target management teams. The NHIC team also held meetings with sector professionals and experts. No discussions regarding a potential merger target were held prior to NHIC’s IPO.

NHIC’s Interaction with Other Targets.    With regard to the five targets (other than Evolv) with which NHIC provided a formal proposal:

Target One:    Target One was headquartered in the United States, and it was known to the principals of NHIC as a leading private company focusing on the manufacturing of commercial e-vehicles specializing in battery electric powertrains. On August 16, 2020, NHIC held a conference call with Target One’s sell-side banker to discuss a potential transaction. On August 24, 2020, NHIC held a conference call with the management team and the financial advisor on the same topic. On September 14, 2020, NHIC proposed a pre-transaction valuation of up to US $1.65 billion and a structure that would have issued 165 million new shares to the shareholders of Target One, resulting in Target One’s shareholders owning 75% of the outstanding shares in the combined company post-merger under the assumption of no redemptions of NHIC’s common shares. However, despite conversations with respect to revised terms, no counteroffer was received relating to Target One. On September 19, 2020, Target One’s financial advisor informed NHIC that Target One would pursue an alternate transaction with another counterparty, and discussions with Target One came to an end.

Target Two:    Target Two was headquartered in the United States, and it was known to the principals of NHIC as a private company designer of LIDAR technology primarily with automotive applications. On August 25, 2020, NHIC held a conference call with Target Two’s management team to discuss a potential transaction. On September 20, 2020, NHIC proposed a pre-transaction valuation of approximately US $2.1 billion and a structure that would have issued in excess of 200 million new shares to the shareholders of Target Two, resulting in Target Two’s shareholders owning 84% of the outstanding shares in the post-merger company under the assumption of

no redemptions of NHIC’s common shares. No counteroffer was received from Target Two. On September 21, 2020, Target Two’s financial advisor informed NHIC that Target Two would pursue an initial public offering, and discussions with Target Two came to an end.

Target Three:    This target was headquartered in the United States and known to the NHIC principals as a private company with a technologically advanced autonomous solution for order fulfillment. On September 8, 2020, NHIC held a conference call with Target Three’s sell-side banker to discuss a potential transaction. An in-person meeting between NHIC and the management team occurred on October 1, 2020, regarding the same topic. Target Three counter-signed a Letter of Intent on October 6, 2020, which has total consideration of US $1.2 billion, including issuing 120 million new shares to the shareholders of Target Three, resulting in Target Three’s shareholders owning 86% of the outstanding shares in the post-merger company under the assumption of no redemptions of NHIC’s common shares. On October 20, 2020, sell side advisors initiated a $125 million PIPE raise. The PIPE was not able to be raised as a result of the market environment at that time. There were some efforts to renegotiate deal valuation, but ultimately, on December 2, 2020, a mutual determination was made to end discussions.

Target Four:    Target Four was headquartered in Canada, and it was known to the principals of NHIC as a private company focused on lithium-ion battery recycling. On December 5, 2020, Target Four’s financial advisor reached out about a potential transaction. On December 7, 2020, NHIC held a conference call with management to discuss a potential transaction. On December 31, 2020, NHIC proposed a pre-transaction valuation of US $850 million and a structure that would have issued 85 million new shares to the shareholders of Target Four, resulting in Target Four’s shareholders owning 64% of the outstanding shares in the post-merger company under the assumption of no redemptions of NHIC’s common shares. On January 7, 2021, Target Four’s financial advisor informed NHIC that Target Four would pursue an initial public offering, and discussions with Target Four came to an end.

Target Five:    Target Five was headquartered in United States, and it was known to the principals of NHIC as a private company and leading designer of 3-D printing systems. On August 6, 2020, NHIC held a conference call with Target Five’s financial advisor to discuss a potential transaction. On January 12, 2021, NHIC proposed a pre-transaction valuation of US $1.75 billion and a structure that would have issued 175 million new shares to the shareholders of Target Five, resulting in Target Five’s shareholders owning 81% of the outstanding shares in the post-merger company under the assumption of no redemptions of NHIC’s common shares and $50 million in net debt. On January 17, 2021, Target Five’s financial advisor informed NHIC that Target Five would pursue an initial public offering, and discussions with Target Five came to an end.

NHIC’s Interaction with Evolv

On August 12, 2020, Charlie Baynes-Reid, NHIC’s COO, had a conversation with a Lux Capital partner to discuss SPACs in general. Subsequently, Bilal Zuberi, partner at Lux Capital, and Charlie Baynes-Reid had a conversation where Evolv was mentioned as a possible SPAC target.

On August 25, 2020, Charlie Baynes-Reid had an introductory videoconference with Peter George, CEO of Evolv, where Charlie Baynes-Reid described NHIC’s focus and the SPAC market in general. Peter George confirmed the board of Evolv had not made any decision as to whether SPACs were an appropriate strategic option for the company.

On September 22, 2020, Peter George emailed Charlie Baynes-Reid confirming that they were actively considering a SPAC transaction and that he would come back to him with a proposed timeline for further conversation.

On September 27, 2020, NHIC and Evolv executed a Mutual Confidentiality and Non-Disclosure Agreement.

On October 2, 2020, Peter George and Charlie Baynes-Reid had a call to discuss setting up an in-person meeting to take place at Evolv’s headquarters in Waltham, Massachusetts.

On October 5, 2020, Charlie Baynes-Reid met with Peter George at Evolv’s headquarters. Mr. George provided a facility tour, a system demo, and a meeting to review the management deck, which was followed by dinner.

On October 6, 2020, Peter George sent Charlie Baynes-Reid some information that provided an overview of the business today and future outlook.

On October 8, 2020, the NHIC management team informed Evolv that they had entered a period of exclusivity with another SPAC target but, subject to those restrictions, would like to remain close.

On January 18, 2021, after NHIC decided not to pursue the other transaction, Charlie Baynes-Reid emailed Peter George to say NHIC was back in the market and asked whether Evolv had made a decision with respect to formally launching a process to find a SPAC partner.

On January 20, 2021, Peter George and Charlie Baynes-Reid exchanged emails confirming that Evolv had appointed Cowen as advisor regarding selection of a SPAC partner and proposed a catch-up in the coming days on the full process. Charlie Baynes-Reid provided some information to its advisor BeckWay (Seth Rosenfield, Mark Watson, Mark Habner and Tim Wilson) and asked them to acknowledge the mutual NDA. Adam Deutsch sent the Mutual NDA to advisors Grant Thornton (Todd McClurkan, Rick Gove, Candice Turner) and ICR (Nora Flaherty, Ashish Gupta, Mahynoor El Tahry, Phil Denning) and asked them to review/acknowledge the NDA. Todd McClurkan emailed Mr. Deutsch acknowledgment of NDA on behalf of Grant Thornton. Ashish Gupta emailed Mr. Deutsch his acknowledgment of NDA on behalf of ICR. The NHIC team had a call with NHIC board member Neil Glat. The NHIC team held an introduction to Evolv via videoconference with the BeckWay team (Tim Wilson, Mark Watson, Jon Mollenhauer, Seth Rosenfield).

On January 21, 2021, the NHIC team held a videoconference with the Stifel team regarding Evolv.

On January 23, 2021, Charlie Baynes-Reid met Peter George at Evolv’s offices to discuss business updates. Charlie Baynes-Reid, Kevin Charlton and Mr. George then held an introductory videoconference to introduce NHIC Board member Neil Glat to Mr. George and Bilal Zuberi. As the former president of the New York Jets and a proposed board member, Mr. Glat offered a range of experience in areas critical to the Evolv strategy and is currently on the board of ASM Global, the world’s largest manager of stadiums, arenas and convention centers. Mr. Charlton updated the NHIC Board via email on the search for a business combination target. In this communication, Mr. Charlton flagged Evolv as one of the top contenders in a list of potential acquisition targets under review in the industrial technology sector.

On January 24, 2021, Peter George emailed Charlie Baynes-Reid an updated NDA for the SPAC process. Mr. Baynes-Reid sent comments to NDA to Mr. George and Eric Pyenson, General Counsel at Evolv. After several iterations, Mr. Pyenson confirmed that comments were acceptable. The signed NDA was emailed back to Mr. Pyenson, Mr. George and Stephen Ranere from Latham & Watkins, Evolv’s counsel.

On January 26, 2021, Eric Pyenson sent back a counter-signed NDA to Susan Quinn from NHIC. Charlie Baynes-Reid sent an updated NDA to the McKinsey, Amanda Tarplin, BeckWay, ICR and Grant Thornton teams via email and asked them to acknowledge. The NDA was acknowledged by the advisors. Charlie Baynes-Reid & Kevin Charlton had a videoconference with Peter George and Cowen (Danielle Kimball, John Nelson and Zach Fisher) and formally introduced NHIC as a bidder.

On January 28, 2021, a full Evolv/NHIC management presentation via videoconference was held between Cowen (Michael Kraus, John Nelson, Zach Fisher, Chris Anderson, Jack Clark), NHIC and Evolv’s management team (Peter George, Peter Faubert, Anil Chitkara). Advisors from Stifel, McKinsey, BeckWay, Loeb, Grant Thornton and ICR participated in addition to some NHIC directors. With the support of its Board, NHIC submitted a Letter of Intent to Evolv. The letter of intent provided for a pre-transaction valuation of US $1.1 billion, contemplating a structure that would have issued 110 million new shares to the shareholders of Evolv, as well as the potential for an additional 10 million shares as an earnout, with 5 million vesting at a $12.50 price target and a further 5 million at a $15 price target. In addition, 50% of the founders shares (excluding Directors and Officers) issued at the time of the initial public offering for NHIC would also agree to be subject to the same vesting schedule, 25% vesting at a $12.50 price target and a further 25% vesting at a $15 price target. The terms of the transaction also contemplated a PIPE of at least $125 million.

On January 30, 2021, Charlie Baynes-Reid had a call with Peter George to update on process.

On January 31, 2021, the NHIC team had a catch-up call with Cowen (John Nelson, Zach Fisher) and Peter George to update on process and the LOI submitted by NHIC.

On February 3, 2021, Charlie Baynes-Reid participated in a series of videoconferences on Evolv Diligence with the Evolv management team (Peter George, Peter Faubert, Anil Chitkara) and Cowen (Michael Kraus, John Nelson, Chris Anderson, Jack Clark). These sessions covered Sales & Marketing, Supply Chain & Manufacturing, Financial Model and IP/Technology and included NHIC advisors Loeb, McKinsey, BeckWay and Korniczky Associates. The IP & Technology session also included Michael Ellenbogen (Evolv).

On February 5, 2021, Charlie Baynes-Reid and Peter George held a videoconference. The NHIC team and NHIC board member Neil Glat attended via videoconference the Evolv board meeting to provide an introduction to NHIC and to answer questions from the board. NHIC formally engaged Riscica Associates, Inc. as a financial consultant.

On February 7, 2021, Kevin Charlton and Charlie-Baynes Reid had a videoconference with John Nelson and Zach Fisher of Cowen to discuss NHIC’s bid. The NHIC team held a videoconference with Stifel (Alyssa Craig, Stephen Butkow, Craig DeDomenico) to update on process.

On February 8, 2021, Peter George called Charlie Baynes-Reid to inform him that NHIC had been selected as the winning SPAC. The NHIC team and Neil Glat held a catch-up call where Charlie Baynes-Reid shared the news that NHIC had been chosen. NHIC received an email with a markup of the LOI from Cowen. Kevin Charlton and Charlie Baynes-Reid held a call with Cowen to discuss the changes to the LOI and provided a signed LOI shortly thereafter. With the support of its Board, NHIC submitted a revised, signed LOI. The letter of intent provided for a pre-transaction valuation of US $1.25 billion, contemplating a structure that would have issued 125 million new shares to the shareholders of Evolv, as well as the potential for an additional 15 million shares as an earnout, with 5 million vesting at a $12.50 price target, a further 5 million at a $15 price target and a further 5 million at a $17.50 price target. In addition, 50% of the founders shares issued at the time of the initial public offering for NHIC would also agree to be subject to vesting: 25% vesting at a $12.50 price target and a further 25% vesting at a $15 price target. The terms of the transaction also contemplated a PIPE of at least $200 million. In addition, NHIC committed to establish a public benefit corporation to which 15% of the outstanding founders shares (excluding directors and officers) would be contributed, as well as all Board compensation to be received by Kevin Charlton, who was to remain on the Board of Directors of the combined company. The proceeds from such shares and Board compensation would be administered by the Board of Evolv in furtherance of the core mission of the company with respect to increasing security and safety.

On February 9, 2021, Peter George forwarded a counter-signed version of the LOI to NHIC.

The NHIC team held a kick-off call with legal advisor Loeb (Lloyd Rothenberg, Ronelle Porter, Giovanni Caruso, Emily Sheahan). The Loeb Team (Mr. Rothenberg, Ms. Porter, Mr. Caruso, Ms. Sheahan, George Du, Jonathan Schwartz, Anastasia Slivker, Hope Wankel) held a video conference to discuss the executed Letter of Intent with Evolv’s legal advisor Latham & Watkins (Ryan Maierson, Stephen Ranere, Daniel Hoffman, Martha Anderson, Nuri Ruzi), Cowen (John Nelson, Zach Fisher), Evolv GC Eric Pyenson, Peter George and the NHIC team. NHIC formally engaged Michael Korniczky as an advisor to conduct US IP due diligence.

On February 10, 2021, Kevin Charlton, Charlie Baynes-Reid and the McKinsey team met via videoconference to discuss the scope of work for Evolv. An Evolv All-Hands Org videoconference was held with the NHIC, Evolv Management, Cowen, Loeb, CFGI, and Grant Thornton teams. NHIC special advisors Neil Glat and Nick Petruska also attended. Adam Deutsch and Peter Faubert had a CFO connect call to discuss audit work. Charlie Baynes-Reid and Peter George held a videoconference to discuss next steps in process.

On February 11, 2021, Cowen (Michael Kraus, John Nelson, Chris Anderson, Jack Clark, Zach Fisher, Chris Weekes, Rob Viola) started hosting a daily update call with the NHIC team, NHIC special advisor Nick Petruska, Ryan Maierson and Evolv Management that continued throughout the process.

On February 12, 2021, Peter George hosted a videoconference with Charlie Baynes-Reid, Kevin Charlton and the NASDAQ team (David Shafer, Eklavya Saraf, Neil Sandhoff, Kenneth Kuhn) to tell them about the product. An Evolv accounting synch videoconference is held between Evolv CFO Peter Faubert, Adam Deutsch and Grant Thornton. Cowen (Michael Kraus, John Nelson, Chris Anderson, Jack Clark, Zach Fisher, Chris Weekes, Rob Viola) held a videoconference regarding PIPE outreach with Kevin Charlton and Charlie Baynes-Reid. The same Cowen attendees hosted a PIPE presentation drafting call with Evolv management, NHIC management, Amanda Tarplin (Tarplin Consulting), NHIC special advisors Neil Glat and Nick Petruska. An introduction call was held between NHIC’s investor/public relations advisor ICR, Amanda Tarplin, Adam Deutsch and Evolv (Peter Faubert, Eric Pyenson).

On February 15, 2021, Charlie Baynes-Reid had an Evolv customer call with Sue Blick (Chief Security Officer, Lincoln Center for the Performing Arts) and Danny Mulligan (Director of Security, Lincoln Center) which included BeckWay and McKinsey. Charlie Baynes-Reid had a videoconference with Anil Chitkara (Evolv) regarding customer calls. Charlie Baynes-Reid had an Evolv customer call with Linda Reid (Vice President of Security Operations, The Walt Disney World Resort) which included BeckWay and McKinsey. The Cowen team held a videoconference to do a PIPE Presentation Dry Run with the NHIC team, Evolv Management team, Amanda Tarplin (Tarplin Consulting), ICR (Don Duffy, Michael Bowen, Jed Hamilton), and NHIC special advisors Neil Glat and Nick Petruska. The NHIC team held a call with the Loeb team regarding tax impact of transferring founder shares to the public benefit corporation. Evolv Management held a due diligence session on Sales & Marketing with the NHIC, McKinsey, ICR and Tarplin Consulting teams.

On February 16, 2021, Evolv Management held a due diligence session on Product and Technology with NHIC, BeckWay, and McKinsey in addition to IP advisor Michael Korniczky. Evolv also held a supply chain diligence session with NHIC, BeckWay and McKinsey.

On February 17, 2021, Charlie Baynes-Reid and Marcos Delchef (BeckWay) held a videoconference to discuss the phase two scope of work for Evolv. NHIC formally engaged Cowen and Company as the exclusive placement agent. Kevin Charlton and Charlie Baynes-Reid had catch-up call on Evolv and Cowen research with Peter Faubert and Jeffrey Osbourne (Cowen). Evolv Management hosted a Zoom videoconference with Columbia Tech (John DeCarlo, Thomas Mofford), Coghlin Companies (Chris Palermo, Chris Coghlin), the Cowen team, BeckWay, McKinsey (Neil Abdalla), the NHIC team, and Nick Petruska. The Cowen team held a videoconference to do another PIPE Presentation Dry Run with the NHIC team, Evolv Management team, Amanda Tarplin (Tarplin Consulting), ICR (Don Duffy, Michael Bowen, Jed Hamilton), and NHIC special advisors Neil Glat and Nick Petruska.

On February 18, 2021, the NHIC team held a videoconference with Peter George to update on process. Charlie Baynes-Reid held a videoconference with potential strategic investor Pohlad (Kiel Luse). The McKinsey team held a videoconference with Charlie Baynes-Reid to review the market sizing model. Kevin Charlton had an introductory videoconference with NFL (Chris Hardart, Manpal Arora) regarding Evolv. Charlie Baynes-Reid had an Evolv customer call with AMB Sports + Entertainment (Karl Pierburg, Vice President of Technology, Data, and Analytics), which included the BeckWay and McKinsey teams.

On February 19, 2021, an S-4 kick-off call was held with Evolv management, Eric Pyenson, Loeb, Latham & Watkins, CFGI, and Amanda Tarplin. Cowen organized a NetShow audio recording of the Evolv PIPE presentation that featured Kevin Charlton, Peter Faubert and Peter George. Cowen held an Investor Q&A videoconference with Evolv management and the NHIC team. The McKinsey team gave the NHIC team an interim readout of diligence findings via videoconference. Michael Korniczky gave his preliminary due diligence findings on IP to Charlie Baynes-Reid. The NHIC team had a comp discussion with Evolv (Lisa Knapp, Peter George, Eric Pyenson) and executive compensation advisor Dana Etra (FW Cook).

On February 21, 2021, Cowen launched the PIPE confidential marketing process with a PIPE kick-off call. This process continued through March 5, 2021 and involved regular meetings with potential PIPE investors by representatives of NHIC and Evolv.

On February 22, 2021, Charlie Baynes-Reid had a discussion with Loeb (Lloyd Rothenberg, Giovanni Caruso, Ronelle Porter) and Neil Glat with regards to board compensation. Charlie Baynes-Reid had a catch-up discussion with McKinsey (Alastair Green, Josh Welle and Mickey Li) with respect to updated diligence findings. A due diligence walk through was held via videoconference for the NHIC Board and included reports from advisors

BeckWay, McKinsey, Loeb, Grant Thornton, and Michael Korniczky. This meeting was to give a preliminary summary of findings and any supplemental topics/follow up for Phase II. Subsequent to this meeting, Charlie Baynes-Reid, Kevin Charlton, Evolv (Peter George, Peter Faubert) and Michael Kraus (Cowen) had a debrief videoconference to confirm that the NHIC Board had been briefed and confirmed that that there were no red flags or concerns.

On February 23, 2021, Charlie Baynes-Reid had a customer call with Mahesh Saptharishi (Motorola) and included advisors from BeckWay and McKinsey. Latham & Watkins provided a draft merger agreement to Loeb & Loeb and the NHIC team discussed revising the merger agreement with the Loeb team based on comments from Evolv’s counsel Latham & Watkins. Kevin Charlton, Evolv (Peter George, Peter Faubert) and Chris Anderson (Cowen) had a videoconference regarding feedback from that day’s PIPE meetings and prep for the next day’s PIPE meetings. There were no material differences in terms between the term sheet and the merger agreement draft.

On February 24, 2021, Charlie Baynes-Reid had a videoconference with Marcos Delchef (BeckWay) to discuss supplemental diligence findings and Phase II scope of work. Charlie Baynes-Reid held a videoconference regarding legal due diligence questions with Evolv (Anil Chitkara, Eric Pyenson), Latham & Watkins (Stephen Ranere) and Loeb (Lloyd Rothenberg, Anastasia Slivker). Kevin Charlton, Evolv (Peter George, Peter Faubert) and Chris Anderson (Cowen) had a videoconference regarding feedback from that day’s PIPE meetings and prep for the next day’s PIPE meetings.

On February 25, 2021, the NHIC team held an Evolv merger agreement page turn session that included Cowen, Evolv management, Grant Thornton, ICR, Loeb, Stifel, Latham & Watkins, White Case, Nick Petruska and Amanda Tarplin. Kevin Charlton, Evolv (Peter George, Peter Faubert) and Chris Anderson (Cowen) had a videoconference regarding feedback from that day’s PIPE meetings and prep for the next day’s PIPE meetings.

On February 26, 2021, S-4 status bi-weekly updates calls started with the NHIC team, Evolv, Loeb CFGI and Latham & Watkins on Fridays and Tuesdays and continued through the process. Charlie Baynes-Reid had a videoconference with the McKinsey team regarding updated diligence findings. Peter George (Evolv) hosted a PIPE update videoconference for the Evolv board with Evolv management, the NHIC team and Latham & Watkins.

On March 1, 2021, Charlie Baynes-Reid discussed earn-out timing with Peter George, Eric Pyenson (Evolv), and Ryan Maierson (Latham & Watkins). Cowen hosted a PIPE follow-up videoconference with one of the anticipated PIPE investors, Evolv and the NHIC team. The McKinsey team shared a diligence readout of their findings with the NHIC board.

On March 2, 2021, the Loeb and NHIC teams had a follow-up call regarding the merger agreement and ancillary documents. Kevin Charlton and Peter George received media training from Jack Franchetti. Mr. Charlton had a catch-up call on Evolv with Neil Glat and the NFL (Manpal Arora, Chris Hardart). Cowen hosted a videoconference PIPE follow-up with one of the anticipated PIPE investors and McKinsey. Adam Deutsch had a financial workstream videoconference with the Grant Thornton team. Mr. Deutsch had an investor relations/public relations timing videoconference with ICR and Amanda Tarplin. Charlie Baynes-Reid had a PIPE/merger status call with Eric Pysenson, Peter George and Ryan Maierson (Latham & Watkins).

On March 3, 2021, the BeckWay team shared a diligence report with the NHIC board. Cowen hosted a further videoconference PIPE follow-up with one of the anticipated PIPE investors, Evolv Management and Charlie Baynes-Reid. ICR and Amanda Tarplin held a media training refresher for Kevin Charlton and Evolv team members Dana Loof, Michea McCaffrey and Michael Bowen. Cowen held a videoconference with Mr. Charlton and Mr. Baynes-Reid regarding allocations. The NHIC Board held a videoconference to further consider and discuss the proposed transaction with Evolv. Representatives from Loeb, BeckWay and Cowen presented their respective due diligence findings. Following a thorough review and discussion, the Merger Agreement and related agreements and the transactions contemplated thereby were unanimously approved by the NHIC Board, and the NHIC Board recommended the approval and adoption of the merger agreement subject to receiving a copy of the merger agreement in substantially final form. The Chairman of the Board acknowledged that the Board had been fully informed as to valuation, had ample opportunity to review and understand the structure, ask questions, including review of the final formal merger agreement and were supportive of the terms and valuation. There were no material differences in key commercial terms.

On March 4, 2021, the NHIC team held an S-4 pre-planning videoconference with the Loeb team. ICR and Amanda Tarplin held another media training session for Kevin Charlton and Dana Loof and Peter George.

On March 5, 2021, Evolv’s board of directors approved the Merger Agreement and related agreements and the transactions. NHIC and Evolv executed the Merger Agreement and related agreements, and NHIC and the PIPE Investors entered into the Subscription Agreements for an aggregate amount of gross proceeds of approximately $470 million from the sale of 30,000,000 shares of the NHIC Class A Common Stock in the PIPE Financing. In response to significant investor interest, NHIC and its financial advisors agreed to upsize the PIPE Financing from an initial amount of $200 million to $300 million in anticipation that the additional cash would be used by Evolv to reduce its future equity financing requirements and to accelerate the development timeline of key strategic initiatives.

Before the market opened on March 8, 2021, a press release was issued announcing the execution of the Merger Agreement and Subscription Agreements, and NHIC filed a Current Report on Form 8-K with the SEC announcing the execution of the Merger Agreement. The same day, representatives of NHIC and Evolv held a joint investor conference call to discuss the Business Combination.

NewHold Investment Corp.’s Board of Directors’ Discussion of Valuation and Reasons for the Approval of the Business Combination

After careful consideration, the board of directors of NewHold Investment Corp. recommends that its stockholders vote “FOR” the approval of the Business Combination Proposal. The factors considered by the NewHold Investment Corp. board of directors include, but were not limited to, the following:

•        Compelling Opportunities for Revenue and Earnings Growth with Evolv’s Transformative Technology Enabling Next Generation, High-Throughput Security Screening.    Evolv’s technology employs a proprietary and patented solution to reliably detect real threats and ignore harmless items, enabling visitors to enter while walking at a normal pace. As a result of Evolv’s process making security screening up to 10x faster than old screening processes, Evolv is positioned to grow its addressable market size from $20MM in 2020 to $100MM by 2025.

•        Disruptive Innovator in the Security Screening Industry with a Mission to Make the Technology Accessible to All Venues and Facilities.    Evolv has invested significant resources in developing proprietary and patented technologies across hardware, software, and cloud services to accelerate the widespread adoption of touchless security screening. In addition to core detection-related innovations, Evolv has developed purpose-built, proprietary hardware that houses advanced sensor arrays in an attractive, customizable design that can be adapted to match any setting.

•        Competitive Position Based on Defensible Areas of Key Competency.    Evolv provides the only proven touchless security screening products addressing customer requirements around throughput, visitor experience, and cost effectiveness. Evolv will be well-positioned to compete in the industry based on core competencies of proven threat detection performance with low nuisance alarm rate, high throughput with superior visitor experience and an expanding database of analytics that will continue to optimize efficiency/accuracy while widening competitive moats.

•        High Growth Revenue Opportunity by Marketing Unique Security Technology Solutions.    Through Evolv’s experience, they have developed a proprietary list of target vertical industries, a list of target accounts within those industries, and identified T-makers within target accounts. Evolv will continue to execute advertising, content marketing, lead generation, and sales development activities to a targeted account list, towards driving an estimated 168% sales CAGR through 2025.

•        Financial Model Produces Significant Operating Leverage and Future Free Cash Flow.    We believe that the innovative “Hardware as a Service” model that Evolv has adopted will result in significant margin enhancement at scale. Evolv is forecasting generation of significant free cash flows beginning as early as 2023. The unit economics are extremely compelling with margins that are forecasted to increase significantly to approximately 85% by 2025, producing $236 million of operating profit off $595 million in sales.

•        Evolv has a Deeply Knowledgeable Management Team with a Track Record of Developing and Deploying Disruptive Technologies.    The Evolv management team has deep operational experience bringing emerging technologies to market across the physical security, cybersecurity software, and

enterprise software sectors. In engineering, Evolv is led by accomplished and visionary technologists and scientists who are leaders in their fields. Commercialization efforts are managed by individuals with prior successes in building and growing both direct and indirect, channel-driven sales organizations.

•        Strong Investor Interest.    Existing Evolv shareholders remain fully invested in the commercial success of New Evolv, as demonstrated by their receipt of all-stock merger consideration in the Merger. The oversubscription, and subsequent upsizing, of the PIPE Financing, confirmed strong, broad investor interest in the PIPE Financing opportunity.

•        Attractive Market Valuation.    The NHIC Board looked at valuation based on a discounted future enterprise value methodology, by analyzing scale, estimated growth and profitability and valuation multiples of select listed comparable companies in the SaaS/Subscription-based security, Security Hardware, and Industrial Technology and Sensing sectors. The output of this analysis resulted in a favorable comparison to Evolv’s $1.25 billion enterprise value implied by the transaction.

This prospective financial information was not prepared with a view toward compliance with published guidelines of the Securities and Exchange Commission or the guidelines established by the American Institute of Certified Public Accountants for preparation or presentation of prospective financial information.

The prospective financial information included in this registration statement has been prepared by, and is the responsibility of Evolv Technologies Inc.’s management.

PricewaterhouseCoopers LLP has not audited, reviewed, examined, compiled nor applied agreed-upon procedures with respect to the accompanying prospective financial information and, accordingly, PricewaterhouseCoopers LLP does not express an opinion or any other form of assurance with respect thereto. The PricewaterhouseCoopers LLP report included in this registration statement relates to Evolv Technologies Inc.’s financial statements. It does not extend to the prospective financial information and should not be read to do so.

Interests of Certain Persons in the Business Combination

When you consider the recommendation of the Board in favor of approval of the Merger, you should keep in mind that NHIC’s directors and officers have interests in the Business Combination that are different from, or in addition to, your interests as a stockholder, including:

•        If a proposed business combination is not completed by August 4, 2022, NHIC will be required to dissolve and liquidate. In such event, the [•]shares of common stock currently held by the Initial Stockholders, which were acquired prior to the IPO will be worthless because such holders have agreed to waive their rights to any liquidation distributions. Such shares of common stock had an aggregate market value of approximately $[•] based on the closing price of the common stock of $[•] on the Nasdaq Stock Market as of [•], 2021.

•        If the proposed Business Combination is not completed by August 4, 2022, the [•] Private Placement Warrants purchased for a total purchase price of $[•], will be worthless. Such Private Placement Warrants had an aggregate market value of approximately $[•], based on the closing price of NHIC’s Units of $[•] on Nasdaq as of [•], 2021;

•        The exercise of NHIC’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the transaction may result in a conflict of interest when determining whether such changes or waivers are appropriate and in our stockholders’ best interest.

Appraisal Rights

There are no appraisal rights available to our stockholders in connection with the Merger.

Total Shares of Common Stock Outstanding Upon Consummation of the Merger

The total number of shares of common stock to be issued and outstanding immediately following completion of the Merger will be [•]. We anticipate that the Evolv stockholders will hold [•]% of our outstanding common stock, the PIPE Investors will hold [•]% of our outstanding common stock and the current NHIC stockholders will

hold [•]% of our outstanding common stock, immediately following completion of the Merger. This percentage (i) assumes that no public shares are redeemed in connection with the Merger, (ii) does not take into account any Evolv [equity incentive awards] that are assumed by NHIC in connection with the Merger and will be outstanding immediately following the Merger, (iii) does not take into account any equity awards that may be issued under the proposed Incentive Plan Award following the Merger, and (iv) does not take into account any Net Debt adjustments to the Merger Consideration.

Anticipated Accounting Treatment

The Business Combination will be accounted for as a “reverse recapitalization” in accordance with GAAP. Under this method of accounting, NHIC will be treated as the “acquired” company for financial reporting purposes. This determination is primarily based on the fact that subsequent to the Business Combination, the Evolv stockholders are expected to have a majority of the voting power of the Combined Company, Evolv will comprise all of the ongoing operations of the Combined Company, Evolv will comprise a majority of the governing body of the Combined Company, and Evolv’s senior management will comprise all of the senior management of the Combined Company. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Evolv issuing shares for the net assets of NHIC, accompanied by a recapitalization. The net assets of NHIC will be stated at historical costs. No goodwill or other intangible assets will be recorded. Operations prior to the Business Combination will be those of Evolv.

Redemption Rights

Pursuant to our Certificate of Incorporation, holders of public shares may elect to have their shares redeemed for cash at the applicable redemption price per share equal to the quotient obtained by dividing (i) the aggregate amount on deposit in the Trust Account as of two business days prior to the consummation of the Business Combination, including interest (net of taxes payable), by (ii) the total number of then-outstanding public shares of common stock. As of [•], 2021, this would have amounted to approximately $[•] per share.

You will be entitled to receive cash for any public shares to be redeemed only if you:

(i)     (a)     hold public shares, or

(b)    hold public shares through Units and you elect to separate your Units into the underlying public shares prior to exercising your redemption rights with respect to the public shares; and

(ii)    prior to [•] p.m., Eastern Time, on [•], 2021, (a) submit a written request to Continental that NHIC redeem your public shares for cash and (b) deliver your public shares to Continental, physically or electronically through DTC.

Holders of outstanding Units must separate the underlying shares of common stock prior to exercising redemption rights with respect to the public shares. If the Units are registered in a holder’s own name, the holder must deliver the certificate for its Units to Continental, with written instructions to separate the Units into their individual component parts. This must be completed far enough in advance to permit the mailing of the certificates back to the holder so that the holder may then exercise his, her or its redemption rights upon the separation of the public shares from the Units.

If a holder exercises its redemption rights, then such holder will be exchanging its public shares for cash and will no longer own shares of the Combined Company. Such a holder will be entitled to receive cash for its public shares only if it properly demands redemption and delivers its shares (either physically or electronically) to Continental in accordance with the procedures described herein. Please see the section titled “The Meeting — Redemption Rights” for the procedures to be followed if you wish to redeem your public shares for cash.

Vote Required for Approval

Along with the approval of the Charter Approval Proposal and the Nasdaq Proposal, approval of this Business Combination Proposal is a condition to the consummation of the Merger. If this Business Combination Proposal is not approved, the Merger will not take place. Approval of this Business Combination Proposal is also a condition to

was no longer a need to continue with two series of common stock and, therefore, this amendment eliminates the Class B common stock. In addition, certain other provisions in our Existing Charter require that proceeds from the NHIC IPO be held in the Trust Account until a business combination or liquidation of merger has occurred. These provisions cease to apply once the Business Combination is consummated.

Vote Required for Approval

Assuming that a quorum is present at the Meeting, the affirmative vote of holders of a majority of the issued and outstanding shares of common stock on this Proposal 2 is required to approve the Charter Approval Proposal. Accordingly, a stockholder’s failure to vote online during the Meeting or by proxy, a broker non-vote or an abstention will be considered a vote “AGAINST” Proposal 2.

This proposal is conditioned on the approval of the Business Combination Proposal and the Nasdaq Proposal. If either of the Business Combination Proposal or the Nasdaq Proposal is not approved, Proposal 2 will have no effect even if approved by our stockholders. Because stockholder approval of this Proposal 2 is a condition to completion of the Merger under the Merger Agreement, if this Proposal 2 is not approved by our stockholders, the Merger will not occur unless we and Evolv waive the applicable closing conditions.

Board Recommendation

THE BOARD RECOMMENDS A VOTE “FOR” ADOPTION OF THE CHARTER APPROVAL PROPOSAL UNDER PROPOSAL 2.

PROPOSAL NO. 3 — THE STOCK PLAN PROPOSAL

We are asking our stockholders to approve and adopt the Evolv Technologies, Inc. 2021 Incentive Award Plan (the “Incentive Award Plan”) and the material terms thereunder.

The Incentive Award Plan is described in more detail below. A copy of the Incentive Award Plan is to be included in this proxy statement/prospectus as Annex C.

The Incentive Award Plan

The purpose of the Incentive Award Plan is to enhance our ability to attract, retain and motivate persons who make (or are expected to make) important contributions by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities.

Summary of the Incentive Award Plan

This section summarizes certain principal features of the Incentive Award Plan. The summary is qualified in its entirety by reference to the complete text of the Incentive Award Plan to be included as Annex C to this Proxy Statement.

Eligibility and Administration

Evolv’s employees, consultants and directors, and employees and consultants of its subsidiaries will be eligible to receive awards under the Incentive Award Plan. The Incentive Award Plan is expected to be administered by our board of directors with respect to awards to non-employee directors and by the compensation committee with respect to other participants, each of which may delegate its duties and responsibilities to committees of directors and/or officers (referred to collectively as the “plan administrator” below), subject to certain limitations that may be imposed under Section 16 of the Exchange Act and/or stock exchange rules, as applicable. The plan administrator will have the authority to make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the Incentive Award Plan, subject to its express terms and conditions. The plan administrator will also set the terms and conditions of all awards under the Incentive Award Plan, including any vesting and vesting acceleration conditions.

Limitation on Awards and Shares Available

The maximum number of common shares initially available for issuance under the Incentive Award Plan is equal to (i) [•] of the total number of common shares issued and outstanding immediately following the consummation of the Business Combination on a fully diluted basis, calculated by applying the treasury share method, plus (ii) an annual increase on the first day of each calendar year beginning on January 1, 2022 and ending on and including January 1, 2032, by an amount equal to the lesser of 5% of the total number of common shares outstanding on the last day of the immediately preceding fiscal year or such smaller number of common shares determined by the Board. No more than ______ shares may be issued in the form of incentive stock options (“ISOs”). Awards granted under the Incentive Award Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by an entity in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or shares will not reduce the number of shares authorized for grant under the Incentive Award Plan. Shares tendered by a holder or withheld to satisfy any exercise price or tax withholding obligation, or otherwise not issued in settlement of an award, will be eligible for grant pursuant to future awards. The maximum grant date fair value (determined as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, or any successor thereto) of equity-based awards granted to a non-employee director as compensation for services as a non-employee director pursuant to the Incentive Award Plan in the aggregate during any calendar year is $500,000, subject to exception in extraordinary circumstances determined by the Board (excluding any effected directors).

Awards

The Incentive Award Plan provides for the grant of stock options, including ISOs and non-qualified stock options (“NSOs”), restricted shares, dividend equivalents, share payments, restricted share units (“RSUs”), other incentive awards, share appreciation rights (“SARs”), and cash awards. No determination has been made as to the types or amounts of awards that will be granted to certain individuals pursuant to the Incentive Award Plan.

Certain awards under the Incentive Award Plan may constitute or provide for a deferral of compensation, subject to Section 409A of the Code, which may impose additional requirements on the terms and conditions of such awards. All awards under the Incentive Award Plan will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms and post-termination exercise limitations. Awards, other than cash awards, generally will be settled in common shares, but the plan administrator may provide for cash settlement of any award. A brief description of each award type follows.

•        Stock Options.    Stock options provide for the purchase of common shares in the future at an exercise price set on the grant date. ISOs, by contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other requirements of the Code are satisfied. The exercise price of a stock option for any such stock option may not be less than 100% of the fair market value of the underlying common share on the date of grant (or 110% in the case of ISOs granted to certain significant stockholders), except with respect to certain substitute options granted in connection with a corporate transaction. The term of a stock option may not be longer than ten years (or five years in the case of ISOs granted to certain significant shareholders), and vested in-the-money awards will be automatically exercised on the last day of the applicable term.

•        SARs.    SARs entitle their holder, upon exercise, to receive an amount equal to the appreciation of the common shares subject to the award between the grant date and the exercise date. The exercise price of a SAR may not be less than 100% of the fair market value of the underlying common share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten years, and vested in-the-money awards will be automatically exercised on the last day of the applicable term.

•        Restricted Shares and RSUs.    Restricted shares are an award of nontransferable common shares that remain forfeitable unless and until specified conditions are met, and which may be subject to a purchase price. RSUs are contractual promises to deliver common shares in the future, which may also remain forfeitable unless and until specified conditions are met. Delivery of the common shares underlying RSUs may be deferred under the terms of the award or at the election of the participant, if the plan administrator permits such a deferral.

•        Share Payments, Other Incentive Awards and Cash Awards.    Share payments are awards of fully vested common shares that may, but need not, be made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards. Other incentive awards are awards other than those enumerated in this summary that are denominated in, linked to or derived from common shares or value metrics related to common shares, and may remain forfeitable unless and until specified conditions are met. Cash awards are cash incentive bonuses subject to performance goals.

•        Dividend Equivalents.    Dividend equivalents represent the right to receive the equivalent value of dividends paid on common shares and may be granted alone or in tandem with awards. Dividend equivalents are credited as of dividend record dates during the period between the date an award is granted and the date such award vests, is exercised, is distributed or expires, as determined by the plan administrator.

Vesting

Vesting conditions determined by the plan administrator may apply to each award and may include continued service, performance and/or other conditions.

Certain Transactions

The plan administrator has broad discretion to take action under the Incentive Award Plan, as well as make adjustments to the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain transactions and events affecting common shares, such as share dividends, share splits, mergers, acquisitions, consolidations and other corporate transactions. In addition, in the event of certain non-reciprocal transactions with our shareholders known as “equity restructurings,” the plan administrator will make equitable adjustments to the Incentive Award Plan and outstanding awards. In the event of our “change in control” (as defined in the Incentive Award Plan), to the extent that the surviving entity declines to continue, convert, assume or replace outstanding awards, then the plan

administrator may provide that all such awards will terminate in exchange for cash or other consideration, or become fully vested and exercisable in connection with the transaction. Upon or in anticipation of a change in control, the plan administrator may cause any outstanding awards to terminate at a specified time in the future and give the participant the right to exercise such awards during a period of time determined by the plan administrator in its sole discretion. Individual award agreements may provide for additional accelerated vesting and payment provisions.

Foreign Participants, Claw-Back Provisions, Transferability, and Participant Payments

The plan administrator may modify award terms, establish subplans and/or adjust other terms and conditions of awards, subject to the share limits described above, in order to facilitate grants of awards subject to the laws and/or stock exchange rules of countries outside of the United States. All awards will be subject to the provisions of any claw-back policy implemented by us to the extent set forth in such claw-back policy and/or in the applicable award agreement. With limited exceptions for estate planning, domestic relations orders, certain beneficiary designations and the laws of descent and distribution, awards under the Incentive Award Plan are generally non-transferable, and are exercisable only by the participant. With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the Incentive Award Plan, the plan administrator may, in its discretion, accept cash or check, provide for net withholding of common shares, allow common shares that meet specified conditions to be repurchased, allow a “market sell order” or such other consideration as it deems suitable.

Plan Amendment and Termination

The board of directors may amend or terminate the Incentive Award Plan at any time; however, except in connection with certain changes in our capital structure, shareholder approval will be required for any amendment that increases the number of common shares available under the Incentive Award Plan. No award may be granted pursuant to the Incentive Award Plan after the tenth anniversary of the adoption of the Incentive Award Plan.

Material U.S. Federal Income Tax Consequences

The following is a general summary under current law of the principal United States federal income tax consequences related to awards under the Incentive Award Plan. This summary deals with the general federal income tax principles that apply and is provided only for general information. Some kinds of taxes, such as state, local and foreign income taxes and federal employment taxes, are not discussed. This summary is not intended as tax advice to participants, who should consult their own tax advisors.

•        Non-Qualified Stock Options.    If an optionee is granted an NSO under the Incentive Award Plan, the optionee should not have taxable income on the grant of the option. Generally, the optionee should recognize ordinary income at the time of exercise in an amount equal to the fair market value of the common shares acquired on the date of exercise, less the exercise price paid for such common shares. The optionee’s basis in the common shares for purposes of determining gain or loss on a subsequent sale or disposition of such shares generally will be the fair market value of common shares on the date the optionee exercises such option. Any subsequent gain or loss will be taxable as a long-term or short-term capital gain or loss. The company or its subsidiaries or affiliates generally should be entitled to a federal income tax deduction at the time and for the same amount as the optionee recognizes ordinary income.

•        Incentive Stock Options.    A participant receiving ISOs should not recognize taxable income upon grant. Additionally, if applicable holding period requirements are met, the participant should not recognize taxable income at the time of exercise. However, the excess of the fair market value of the common shares received over the option exercise price is an item of tax preference income potentially subject to the alternative minimum tax. If common shares acquired upon exercise of an ISO are held for a minimum of two years from the date of grant and one year from the date of exercise and otherwise satisfy the ISO requirements, the gain or loss (in an amount equal to the difference between the fair market value on the date of disposition and the exercise price) upon disposition of the shares will be treated as a long-term capital gain or loss, and the company will not be entitled to any deduction. If the holding period requirements are not met, the ISO will be treated as one that does not meet the requirements of the Code for ISOs and the participant will recognize ordinary income at the time of the disposition equal to the excess of the amount realized over the exercise price, but not more than the excess of the fair market value of the common shares on the date the ISO is exercised over the exercise

price, with any remaining gain or loss being treated as capital gain or capital loss. The company or its subsidiaries or affiliates generally are not entitled to a federal income tax deduction upon either the exercise of an ISO or upon disposition of the common shares acquired pursuant to such exercise, except to the extent that the participant recognizes ordinary income on disposition of the shares.

•        Other Awards.    The current federal income tax consequences of other awards authorized under the Incentive Award Plan generally follow certain basic patterns: SARs are taxed and deductible in substantially the same manner as NSOs; nontransferable restricted shares subject to a substantial risk of forfeiture results in income recognition equal to the excess of the fair market value over the price paid, if any, only at the time the restrictions lapse (unless the recipient elects to accelerate recognition as of the date of grant through a Section 83(b) election); RSUs, dividend equivalents and other share or cash based awards are generally subject to tax at the time of payment. The company or its subsidiaries or affiliates generally should be entitled to a federal income tax deduction at the time and for the same amount as the optionee recognizes ordinary income.

Section 409A of the Code

Certain types of awards under the Incentive Award Plan may constitute, or provide for, a deferral of compensation subject to Section 409A of the Code. Unless certain requirements set forth in Section 409A of the Code are complied with, holders of such awards may be taxed earlier than would otherwise be the case (e.g., at the time of vesting instead of the time of payment) and may be subject to an additional 20% penalty tax (and, potentially, certain interest, penalties and additional state taxes). To the extent applicable, the Incentive Award Plan and awards granted under the Incentive Award Plan are intended to be structured and interpreted in a manner intended to either comply with or be exempt from Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance that may be issued under Section 409A of the Code. To the extent determined necessary or appropriate by the plan administrator, the Incentive Award Plan and applicable award agreements may be amended to further comply with Section 409A of the Code or to exempt the applicable awards from Section 409A of the Code.

Required Vote

This Stock Plan Proposal will be approved and adopted only if holders of at least a majority of the issued and outstanding shares of common stock present in person by virtual attendance or represented by proxy and entitled to vote at the Meeting vote “FOR” the Stock Plan Proposal. This Stock Plan Proposal is conditioned upon the approval and completion of the Business Combination Proposal, the Charter Approval Proposal and the Nasdaq Proposal. If any of the Merger Proposal, the Charter Approval Proposal or the Nasdaq Proposal are not approved, this proposal will have no effect even if approved by our stockholders.

Board Recommendation

OUR BOARD UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE “FOR” THE STOCK PLAN UNDER PROPOSAL 3.

PROPOSAL NO. 4 — THE NASDAQ PROPOSAL

Overview

We are proposing the Nasdaq Proposal in order to comply with Nasdaq Listing Rules 5635(a), (b), and (d). Under Nasdaq Listing Rule 5635(a), stockholder approval is required prior to the issuance of securities in connection with the acquisition of another company if such securities are not issued in a public offering and (A) have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of common stock (or securities convertible into or exercisable for common stock); or (B) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities. Under Nasdaq Listing Rule 5635(b), stockholder approval is required prior to the issuance of securities when the issuance or potential issuance will result in a change of control. Under Nasdaq Listing Rule 5635(d), stockholder approval is required for a transaction other than a public offering involving the sale, issuance or potential issuance by an issuer of common stock (or securities convertible into or exercisable for common stock) at a price that is less than the lower of (i) the closing price immediately preceding the signing of the binding agreement or (ii) the average closing price of the common stock for the five trading days immediately preceding the signing of the binding agreement, if the number of shares of common stock (or securities convertible into or exercisable for common stock) to be issued equals to 20% or more of the common stock, or 20% or more of the voting power, outstanding before the issuance.

Pursuant to the Merger Agreement, based on Evolv’s current capitalization, we anticipate that we will issue to the Evolv stockholders as consideration in the Merger, [•] shares of common stock, without giving effect to the potential earn-out shares. See the section entitled “The Merger Proposal — The Merger Agreement — Merger Consideration.” Because the number of shares of common stock we anticipate issuing as consideration in the Merger (1) will constitute more than 20% of our outstanding common stock and more than 20% of outstanding voting power prior to such issuance and (2) will result in a change of control of NHIC, we are required to obtain stockholder approval of such issuance pursuant to Nasdaq Listing Rules 5635(a) and (b).

In connection with the Merger, there will be a PIPE Investment of $300 million. As such, on or about the date of the Merger Agreement, NHIC entered into subscription agreements with the PIPE Investors for the sale of [•] shares of common stock upon the completion of the Merger. Because the shares of our common stock issued in connection with the PIPE Investment (1) was at a price that is less than the lower of (i) the closing price immediately preceding the signing of the Merger Agreement or (ii) the average closing price of the common stock for the five trading days immediately preceding the signing of the Merger Agreement, and (2) will constitute more than 20% of our outstanding common stock and more than 20% of outstanding voting power prior to such issuance, we are required to obtain stockholder approval of such issuance pursuant to Nasdaq Listing Rule 5635(d).

Effect of Proposal on Current Stockholders

If the Nasdaq Proposal is adopted, NHIC would issue shares representing more than 20% of the outstanding shares of our common stock in connection with the Business Combination and the PIPE Investment. The issuance of such shares would result in significant dilution to the NHIC stockholders and would afford such stockholders a smaller percentage interest in the voting power, liquidation value and aggregate book value of NHIC. If the Nasdaq Proposal is adopted, assuming that [•] shares of common stock are issued to the Sellers as consideration in the Merger, we anticipate that the Sellers will hold [•]% of our outstanding shares of common stock, the PIPE Investors will hold [•]% of our outstanding common stock, and the current NHIC stockholders will hold [•]% of our outstanding common stock immediately following completion of the Merger. This percentage assumes that no shares of our common stock are redeemed in connection with the Merger, does not take into account any warrants or options to purchase our common stock that will be outstanding following the Merger, any equity awards that may be issued under our proposed Incentive Award Plan following the Merger, or any Net Debt Adjustment to the Merger Consideration provided for in the Merger Agreement.

If the Nasdaq Proposal is not approved and we consummate the Business Combination on its current terms, NHIC would be in violation of Nasdaq Listing Rule 5635(a) and (b) and potentially Nasdaq Listing Rule 5635(d), which could result in the delisting of our securities from the Nasdaq Capital Market. If Nasdaq delists our securities from trading on its exchange, we could face significant material adverse consequences, including:

•        a limited availability of market quotations for our securities;

•        reduced liquidity with respect to our securities;

•        a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities;

•        a limited amount of news and analyst coverage for the post-transaction company; and

•        a decreased ability to issue additional securities or obtain additional financing in the future.

It is a condition to the obligations of NHIC and Evolv to close the Business Combination that our common stock remain listed on the Nasdaq Capital Market. As a result, if the Nasdaq Proposal is not adopted, the Business Combination may not be completed unless this condition is waived.

Vote Required for Approval

Assuming that a quorum is present at the Meeting, the affirmative vote of holders of a majority of the total votes cast on this Proposal 4 is required to approve the Nasdaq Proposal. Accordingly, neither a stockholder’s failure to vote online during the Meeting or by proxy, a broker non-vote nor an abstention will be considered a “vote cast,” and thus will have no effect on the outcome of this proposal.

This proposal is conditioned on the approval of the Business Combination Proposal and the Charter Approval Proposal. If either of the Business Combination Proposal or Charter Approval Proposal is not approved, Proposal 4 will have no effect even if approved by our stockholders. Because stockholder approval of this Proposal 4 is a condition to completion of the Merger under the Merger Agreement, if this Proposal 4 is not approved by our stockholders, the Merger will not occur unless we and Evolv waive the applicable closing condition.

Board Recommendation

OUR BOARD UNANIMOUSLY RECOMMENDS THAT OUR STOCKHOLDERS VOTE “FOR” THE NASDAQ PROPOSAL UNDER PROPOSAL 6.

PROPOSAL 5 — THE ADJOURNMENT PROPOSAL

The Adjournment Proposal, if adopted, will approve the chairman’s adjournment of the Meeting to a later date to permit further solicitation of proxies. The Adjournment Proposal will only be presented to our stockholders in the event, based on the tabulated votes, there are not sufficient votes received at the time of the Meeting to approve the other Proposals.

Consequences if the Adjournment Proposal is Not Approved

If the Adjournment Proposal is not approved by our stockholders, the chairman will not adjourn the Meeting to a later date in the event, based on the tabulated votes, there are not sufficient votes received at the time of the Meeting to approve the Business Combination Proposal, the Charter Approval Proposal, the Stock Plan Proposal or the Nasdaq Proposal.

Required Vote

This Adjournment Proposal will be approved and adopted only if holders of at least a majority of the issued and outstanding shares of common stock present in person by virtual attendance or represented by proxy and entitled to vote at the Meeting vote “FOR” the Adjournment Proposal. The Adjournment Proposal is not conditioned on the approval of any other proposal set forth in this proxy statement.

Board Recommendation

THE BOARD RECOMMENDS A VOTE “FOR” ADOPTION OF THE ADJOURNMENT PROPOSAL UNDER PROPOSAL 5.

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

Tax Consequences of the Merger to U.S. Holders of Evolv Common Stock

Subject to the discussions below relating to the receipt of cash in lieu of fractional shares, a U.S. Holder generally will not recognize any gain or loss upon the receipt of shares of NHIC capital stock in the Business Combination. The U.S. Holder’s aggregate tax basis in NHIC capital stock received in the Business Combination (including any fractional share deemed received and sold as described below) generally will be equal to the aggregate tax basis of the shares of Evolv common stock surrendered. The U.S. Holder’s holding period for shares of NHIC capital stock received in the Business Combination (including any fractional share deemed received and sold as described below) generally will include such holder’s holding period for its shares of capital stock surrendered therefor.

If a U.S. Holder has acquired different blocks of Evolv capital stock at different times or at different prices, then such holder’s tax basis and holding period in shares of NHIC capital stock received in the Business Combination generally will be determined with reference to each block of Evolv capital stock. Any such holders should consult their tax advisors with respect to identifying the bases or holding periods of the shares of NHIC capital stock received in the Business Combination.

Cash in Lieu of Fractional Shares

A U.S. Holder that receives cash in lieu of a fractional share of NHIC capital stock generally will be treated as having received such fractional share in the Business Combination and then as having sold such fractional share for cash. Such U.S. Holder generally will recognize gain or loss equal to the difference between the amount of cash received in lieu of the fractional share of NHIC capital stock and the tax basis allocated to such fractional share of NHIC capital stock. Such gain or loss generally will be capital gain or loss, and long-term capital gain or loss if the holding period for such fractional share (including the holding period of the Evolv capital stock surrendered therefor) is more than one year as of the closing date of the Business Combination. Long-term capital gains of non-corporate U.S. Holders currently are generally eligible for preferential U.S. federal income tax rates. The deductibility of capital losses is subject to limitations.

Perfection of Appraisal Rights

The above discussion does not apply to U.S. Holders of Evolv capital stock who properly perfect appraisal rights. A U.S. Holder of Evolv capital stock who perfects appraisal rights with respect to such U.S. Holder’s stock generally will recognize capital gain or loss equal to the difference between the amount of cash paid in exchange for such stock and such U.S. Holder’s tax basis in such stock, except that a portion of the cash paid may be taxable as interest.

Tax Consequences of a Redemption of Public Shares

General

This section is a general summary of the material U.S. federal income tax provisions relating to the redemption of NHIC’s common stock in connection with a business combination. This section does not address any aspect of U.S. federal gift or estate tax, or the state, local or non-U.S. tax consequences of an investment in our securities, nor does it provide any actual representations as to any tax consequences of the acquisition, ownership or disposition of our securities.

The discussion below of the U.S. federal income tax consequences to “U.S. Holders” will apply to a beneficial owner of our securities that is for U.S. federal income tax purposes:

•        an individual citizen or resident of the United States;

•        a corporation (or other entity treated as a corporation) that is created or organized (or treated as created or organized) in or under the laws of the United States, any state thereof or the District of Columbia

•        an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source, or

•        a trust if (i) a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S. person.

This discussion is based on the Internal Revenue Code of 1986, as amended (the “Code”), its legislative history, Treasury regulations promulgated thereunder, published rulings and court decisions, all as currently in effect. These authorities are subject to change or differing interpretations, possibly on a retroactive basis.

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to any particular holder based on such holder’s individual circumstances. In particular, this discussion considers only the redemption of our shares of common stock holders who own and hold our securities as capital assets within the meaning of Section 1221 of the Code, and does not address the potential application of the alternative minimum tax. In addition, this discussion does not address the U.S. federal income tax consequences to holders that are subject to special rules, including:

•        financial institutions or financial services entities;

•        broker-dealers;

•        taxpayers that are subject to the mark-to-market accounting rules under Section 475 of the Code;

•        tax-exempt entities;

•        governments or agencies or instrumentalities thereof;

•        insurance companies;

•        regulated investment companies;

•        regulated investment companies;

•        expatriates or former long-term residents of the United States;

•        persons that actually or constructively own 5 percent or more of our voting shares;

•        persons that acquired our securities pursuant to an exercise of employee share options, in connection with employee share incentive plans or otherwise as compensation;

•        persons that hold our securities as part of a straddle, constructive sale, hedging, conversion or other integrated transaction;

•        persons whose functional currency is not the U.S. dollar;

•        controlled foreign corporations; or

•        passive foreign investment companies.

This discussion does not address any aspect of U.S. federal non-income tax laws, such as gift or estate tax laws, state, local or non-U.S. tax laws or, except as discussed herein, any tax reporting obligations of a holder of our securities. Additionally, this discussion does not consider the tax treatment of partnerships or other pass-through entities or persons who hold our securities through such entities. If a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our securities, the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership.

We have not sought, and will not seek, a ruling from the IRS or an opinion of counsel as to any U.S. federal income tax consequence described herein. The IRS may disagree with the descriptions herein, and its determination may be upheld by a court. Moreover, there can be no assurance that future legislation, regulations, administrative rulings or court decisions will not adversely affect the accuracy of the statements in this discussion.

THIS DISCUSSION IS ONLY A SUMMARY OF THE MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE REDEMPTION OF OUR SECURITIES IN CONNECTION WITH THE BUSINESS COMBINATION. IT DOES NOT PROVIDE ANY ACTUAL REPRESENTATIONS AS TO ANY TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES AND WE HAVE NOT OBTAINED ANY OPINION OF COUNSEL WITH RESPECT TO SUCH TAX CONSEQUENCES. AS A RESULT, EACH PROSPECTIVE INVESTOR IN OUR SECURITIES IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES TO SUCH INVESTOR OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR SECURITIES, INCLUDING THE APPLICABILITY AND EFFECT OF ANY STATE, LOCAL, AND NON-U.S. TAX LAWS, AS WELL AS U.S. FEDERAL TAX LAWS AND ANY APPLICABLE TAX TREATIES.

Redemption of Common Stock

If a U.S. Holder redeems common stock into the right to receive cash pursuant to the exercise of a shareholder redemption right, for U.S. federal income tax purposes, such conversion or sale generally will be treated as a redemption and will be subject to the following rules. If the redemption qualifies as a sale of the common stock under Section 302 of the Code:

•        a U.S. Holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized and the U.S. Holder’s adjusted tax basis in the securities.

•        The regular U.S. federal income tax rate on capital gains recognized by U.S. Holders generally is the same as the regular U.S. federal income tax rate on ordinary income, except that under tax law currently in effect long-term capital gains recognized by non-corporate U.S. Holders are generally subject to U.S. federal income tax at reduced rates. Capital gain or loss will constitute long-term capital gain or loss if the U.S. Holder’s holding period for the securities exceeds one year. The deductibility of capital losses is subject to various limitations. U.S. Holders who recognize losses with respect to a disposition of our securities should consult their own tax advisors regarding the tax treatment of such losses.

Whether redemption of our shares qualifies for sale treatment will depend largely on the total number of shares of NHIC common stock treated as held by such U.S. Holder. The redemption of common stock generally will be treated as a sale or exchange of common stock (rather than as a distribution) if the receipt of cash upon the redemption (i) is “substantially disproportionate” with respect to a U.S. Holder, (ii) results in a “complete termination” of such holder’s interest in us or (iii) is “not essentially equivalent to a dividend” with respect to such holder. These tests are explained more fully below.

In determining whether any of the foregoing tests are satisfied, a U.S. Holder must take into account not only the NHIC common stock actually owned by such holder, but also the NHIC common stock that is constructively owned by such holder. A U.S. Holder may constructively own, in addition to our common stock owned directly, common stock owned by related individuals and entities in which such holder has an interest or which have an interest in such holder, as well as any common stock such holder has a right to acquire by exercise of an option, which would generally include common stock that could be acquired pursuant to the exercise of warrants. In order to meet the substantially disproportionate test, the percentage of our issued and outstanding voting shares actually and constructively owned by a U.S. Holder immediately following the redemption of our common stock must, among other requirements, be less than 80% of the percentage of our issued and outstanding voting and common stock actually and constructively owned by such holder immediately before the redemption. There will be a complete termination of a U.S. Holder’s interest if either (i) all of our common stock actually and constructively owned by such U.S. Holder is redeemed or (ii) all of our common stock actually owned by such U.S. Holder is redeemed and such holder is eligible to waive, and effectively waives, in accordance with specific rules, the attribution of shares owned by family members and such holder does not constructively own any other shares. The redemption of the common stock will not be essentially equivalent to a dividend if such redemption results in a “meaningful reduction” of a U.S. Holder’s proportionate interest in us. Whether the redemption will result in a meaningful reduction in a U.S. Holder’s proportionate interest in us will depend on the particular facts and circumstances. However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority shareholder in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.” U.S. Holders should consult with their own tax advisors as to the tax consequences of any such redemption.

If none of the foregoing tests are satisfied, then the redemption may be treated as a distribution a U.S. Holder generally will be required to include in gross income as dividends the amount received. Such amount will be taxable to a corporate U.S. holder at regular rates and will not be eligible for the dividends-received deduction generally allowed to domestic corporations in respect of dividends received from other domestic corporations. Distributions in excess of such earnings and profits generally will be applied against and reduce the U.S. Holder’s basis in its common stock (but not below zero) and, to the extent in excess of such basis, will be treated as gain from the sale or exchange of such common stock. With respect to non-corporate U.S. Holders, dividends may be subject to the lower applicable long-term capital gains tax rate (see above) if our common stock is readily tradeable on an established securities market in the United States and certain other requirements are met. U.S. Holders should consult their own tax advisors regarding the availability of the lower rate for any cash dividends paid with respect to our common stock. After the application of those rules, any remaining tax basis a U.S. Holder has in the redeemed common stock will be added to the adjusted tax basis in such holder’s remaining common stock. If there are no remaining common stock, a U.S. Holder should consult its own tax advisors as to the allocation of any remaining basis.

Certain U.S. Holders may be subject to special reporting requirements with respect to a redemption of common stock, and such holders should consult with their own tax advisors with respect to their reporting requirements.

If NHIC files a bankruptcy petition or an involuntary bankruptcy petition is filed against it that is not dismissed, the proceeds held in the Trust Account could be subject to applicable bankruptcy law, and may be included in its bankruptcy estate and subject to the claims of third parties with priority over the claims of our public stockholders. To the extent any bankruptcy claims deplete the Trust Account, we cannot assure you we will be able to return $10.00 per share to our public stockholders. Additionally, if we file a bankruptcy petition or an involuntary bankruptcy petition is filed against us that is not dismissed, any distributions received by stockholders could be viewed under applicable debtor/creditor and/or bankruptcy laws as either a “preferential transfer” or a “fraudulent conveyance.” As a result, a bankruptcy court could seek to recover some or all amounts received by our public stockholders. Furthermore, our Board may be viewed as having breached its fiduciary duty to our creditors and/or may have acted in bad faith, and thereby exposing itself and NHIC to claims of punitive damages, by paying public stockholders from the Trust Account prior to addressing the claims of creditors. We cannot assure you that claims will not be brought against us for these reasons.

Each of the Initial Stockholders and Sponsor has agreed to waive its rights to participate in any liquidation of the Trust Account or other assets with respect to the Private Placement Warrants they held.

Facilities

We maintain our principal executive offices at 12141 Wickchester Ln., Suite 325, Houston, TX. An affiliate of our Sponsor is providing this space for a fee of $15,000 per month. We consider our current office space adequate for our current operations.

Employees

NHIC has three executive officers. These individuals are not obligated to devote any specific number of hours to its matters and intend to devote only as much time as they deem necessary to its affairs. NHIC presently expects its executive officers to devote such amount of time as they reasonably believe is necessary to our business (which could range from only a few hours a week while NHIC is trying to locate a potential target business to significantly more time as it moves into serious negotiations with a target business for a business combination). NHIC does not intend to have any full-time employees prior to the consummation of a business combination.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF NHIC

The following discussion and analysis of the NHIC’s financial condition and results of operations should be read in conjunction with our audited financial statements and the notes related thereto which are included elsewhere in this proxy statement/prospectus. Certain information contained in the discussion and analysis set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those set forth under “Cautionary Note Regarding Forward-Looking Statements.”

Overview

We are a blank check company incorporated on January 24, 2020 as a Delaware corporation and formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. We intend to effectuate our initial business combination using cash from the proceeds of the initial public offering and the sale of the Private Placement Warrants, our capital stock, debt or a combination of cash, stock and debt.

The outbreak of the COVID-19 coronavirus has resulted in a widespread health crisis that has adversely affected the economies and financial markets worldwide, and potential target companies may defer or end discussions for a potential business combination with us whether or not COVID-19 affects their business operations. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. We may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limiting our ability to conduct meetings to negotiate and consummate transactions in a timely manner with potential investors, target company’s personnel, or vendors and services providers.

On August 4, 2020, simultaneously with the consummation of the IPO, we consummated the private placement (“Private Placement”) with the Sponsor and certain funds and accounts managed by Magnetar Financial LLC, UBS O’Connor LLC, and Mint Tower Capital Management B.V. (collectively the “Anchor Investors”) of 5,250,000 warrants (the “Private Warrants”) at a price of $1.00 per Private Warrant, generating gross proceeds to NHIC of $5,250,000. On August 14, 2020, simultaneously with the issuance and sale of the Over-Allotment Units, NHIC consummated the sale of an additional 450,000 Private Warrants (the “Over-Allotment Private Placement” and, together with the IPO Private Placement, the “Private Placements”), generating gross proceeds of $450,000. The Private Warrants are identical to the Warrants (as defined below) sold in the IPO except that the Private Warrants will be non-redeemable and may be exercised on a cashless basis, in each case so long as they continue to be held by the Sponsor, the anchor investors or their permitted transferees. Additionally, our Sponsor and anchor investors have agreed not to transfer, assign, or sell any of the Private Warrants or underlying securities (except in limited circumstances, as described in the Registration Statement) until the date that is 30 days after the date we complete our initial business combination. The Sponsor and anchor investors were granted certain demand and piggyback registration rights in connection with the purchase of the Private Warrants.

Results of Operations

Our only activities from January 24, 2020 (inception) through August 4, 2020 were organizational activities, those necessary to consummate the initial public offering, described above. Subsequent to August 4, 2020 our activities include seeking to identify a target company for a business combination. We do not expect to generate any operating revenues until after the completion of our business combination. We generate non-operating income in the form of income on investments held in the trust account. We are incurring expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the period from January 24, 2020 (inception) through December 31, 2020, we had a net loss of approximately $951,000, which consisted of operating costs of approximately $1,030,000 offset by income on investments held in the trust account of approximately $79,000. Included in the operating costs of approximately $1,030,000 is approximately $706,000 of professional, consulting, diligence and other costs related to evaluating business combination candidates, approximately $166,000 for professional, compliance, listing and insurance costs

associated with NHIC’s public reporting, approximately $83,000 for taxes (a portion of which can be reimbursed from the trust account), and approximately $75,000 paid to our sponsor for Administrative Support Agreement, among other costs.

Liquidity and Capital Resources

We consummated our initial public offering of 17,250,000 units, including the full exercise by the underwriter of its over-allotment option in the amount of 2,250,000 Units, at a price of $10.00 per Unit, generating gross proceeds of $172,500,000. Simultaneously with the closing of the Initial Public Offering, we consummated the sale of 5,250,000 Private Placement Warrants to our Sponsor, at $1.00 per Private Placement Warrant, generating gross proceeds of $5,250,000. On August 14, 2020, simultaneously with the issuance and sale of the Over-Allotment Units, NHIC consummated the sale of an additional 450,000 Private Warrants (the “Over-Allotment Private Placement” and, together with the IPO Private Placement, the “Private Placements”), generating gross proceeds of $450,000.

Transaction costs amounted to approximately $9,986,500 consisting of $3,450,000 of underwriting fees, $6,037,500 of deferred underwriting fees and approximately $499,000 of other offering costs.

For the period from January 24, 2020 (inception) through December 31, 2020, cash used in operating activities was approximately $454,000. Net loss of approximately $951,000 was affected by income earned on investments held in the Trust Account of approximately $79,000. Changes in operating assets and liabilities provided approximately $576,000 of cash for operating activities.

As of December 31, 2020, we had investments held in the trust account of $172,579,000 consisting of U.S. government treasury bills which matured on February 4, 2021. Upon maturity, the proceeds were invested in U.S. government treasury bills maturing on May 6, 2021. At December 31, 2020, income of approximately $79,000 was available to us to pay taxes which were accrued at approximately $83,000. Through December 31, 2020, however, we did not withdraw any interest earned on the Trust Account to pay our taxes. We intend to use substantially all of the funds held in the Trust Account, to acquire a target business and to pay our expenses relating thereto. To the extent that our capital stock is used in whole or in part as consideration to effect a business combination, the remaining funds held in the Trust Account will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our business combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.

As of December 31, 2020, we had cash of approximately $1,328,000. We intend to use the funds held outside the Trust Account for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

In order to fund working capital deficiencies or finance transaction costs in connection with a Business Combination, the initial stockholders or an affiliate of the initial stockholders, or certain of our officers and directors or their affiliates may, but are not obligated to, loan us funds as may be required. If we complete our initial Business Combination, we would repay such loaned amounts. In the event that our initial Business Combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts but no proceeds from our Trust Account would be used for such repayment. Up to $1,500,000 of notes may be convertible into Private Placement Warrants, at a price of $1.00 per warrant. The warrants would be identical to the Private Placement Warrants.

We do not believe we will need to raise additional funds in order to meet the expenditures required for operating our business. However, if our estimate of the costs of identifying a target business, undertaking in-depth due diligence and negotiating a Business Combination are less than the actual amount necessary to do so, we may have insufficient funds available to operate our business prior to our Business Combination. Moreover, we may need to obtain additional financing either to complete our Business Combination or because we become obligated

to redeem a significant number of our public shares upon consummation of our Business Combination, in which case we may issue additional securities or incur debt in connection with such Business Combination. Subject to compliance with applicable securities laws, we would only complete such financing simultaneously with the completion of our Business Combination. If we are unable to complete our Business Combination because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the Trust Account. In addition, following our Business Combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations.

Off-Balance Sheet Financing Arrangements

We have no obligations, assets or liabilities, which would be considered off-balance sheet arrangements as of December 31, 2020. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than an agreement to pay our Sponsor a monthly fee of $10,000 for office space, utilities and secretarial and administrative support. We began incurring these fees on August 4, 2020 and will continue to incur these fees monthly until the earlier of the completion of the Business Combination and our liquidation.

The underwriters are entitled to a deferred fee of 3.5% of the gross proceeds of the Initial Public Offering, or $6,037,500. The deferred fee will be payable in cash to the underwriters solely in the event that we complete a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement.

Critical Accounting Policies

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting policies:

Deferred Offering Costs:

NHIC complies with the requirements of the FASB ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (SAB) Topic 5A — “Expenses of Offering.” Costs incurred in connection with preparation for the Offering (approximately $9,986,500) including underwriters’ discount paid and deferred, have been charged to equity upon completion of the Offering.

Common Stock Subject to Possible Redemption

As discussed in Note 3, all of the 17,250,000 public shares sold as part of Units in the Public Offering contain a redemption feature which allows for the redemption of public shares if NHIC holds a stockholder vote or there is a tender offer for shares in connection with a Business Combination. In accordance with FASB ASC 480, redemption provisions not solely within the control of NHIC require the security to be classified outside of permanent equity. Ordinary liquidation events, which involve the redemption and liquidation of all of the entity’s equity instruments, are excluded from the provisions of FASB ASC 480. Although NHIC did not specify a maximum redemption threshold, its charter provides that in no event will it redeem its public shares in an amount that would cause its net tangible assets (stockholders’ equity) to be less than $5,000,001 upon the closing of a Business Combination.

NHIC recognizes changes in redemption value immediately as they occur and adjusts the carrying value of the securities at the end of each reporting period. Increases or decreases in the carrying amount of redeemable common stock are affected by adjustments to additional paid-in capital. Accordingly, at December 31, 2020, 16,229,286 of the 17,250,000 public shares were classified outside of permanent equity.

Net Income (Loss) per Common Share

Net income (loss) per common share is computed by dividing net income (loss) applicable to common stockholders by the weighted average number of shares of common stock outstanding for the period. NHIC has not considered the effect of the warrants sold in the Public Offering and Private Placement to purchase an aggregate of 14,325,000 shares of Class A common stock in the calculation of diluted income (loss) per share, since their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted income (loss) per common share is the same as basic loss per common share for the period.

NHIC’s statement of operations includes a presentation of income (loss) per share for common stock subject to redemption in a manner similar to the two-class method of income (loss) per share. Net income (loss) per share, basic and diluted for Class A common stock is calculated by dividing the interest income earned on the funds in the Trust Account, net of income tax expense and franchise tax expense, by the weighted average number of shares of Class A common stock outstanding since their original issuance. Net income (loss) per common share, basic and diluted, for shares of Class B common stock is calculated by dividing the net income (loss), less income attributable to Class A common stock, by the weighted average number of shares of Class B common stock outstanding for the period. Net income (loss) available to each class of common stockholders is as follows for the three months ended December 31, 2020 and for the period from January 24, 2020 (inception) to December 31, 2020:

Recent Accounting Standards

Management does not believe that any other recently issued, but not yet effective, accounting standards, if currently adopted, would have a material effect on our financial statements.

Our flagship product is Evolv Express®, a touchless security screening system designed to detect firearms, improvised explosive devices, and tactical knives as visitors walk through at a normal pace, individually or in groups, with no need to form into a single-file line. Evolv Express supports a maximum screening throughput of up to 3,600 people per hour (vs. approximately 350 per hour for old walk-through metal detectors) at up to 70% lower total cost per scan when labor costs are included. Based on the Evolv Cortex AI™ software platform, Evolv Express uses artificial intelligence to detect threats. The Evolv Insights™ application for Evolv Express provides detailed analytics about visitor flows and Evolv Express detection performance. The Evolv Thermal Imaging Package™ for Evolv Express integrates elevated skin temperature screening into the Evolv Express touchless security screening process. Evolv Express became commercially available in October 2019.

Evolv Edge® is the predecessor to our Evolv Express product. Evolv Edge supports structured, single-file people flows in entrances. It provides maximum screening throughput of approximately 800 people per hour. The primary distinguishing feature of Evolv Edge is that it is designed to detect non-metallic explosive devices in addition to metallic explosive devices, firearms, and tactical knives without requiring visitors to divest or empty their pockets. Evolv Edge became commercially available in 2017. While Evolv Edge is an important part of our legacy, we do not expect it to be a significant portion of our growth plan.

We have built our own direct sales organization and also developed a global distribution channel of strategic partners and resellers to reach a broad global audience and to market, sell, and support our products. Our network of third-party value-added resellers covers more than 30 countries around the world and is composed of sales and distribution professionals with years of experience in physical security solutions. This enables us to sell and service our products at-scale in markets globally and is designed to produce substantial operational leverage as we execute our strategy.

We are led by visionary technologists and a team of proven leaders with experience bringing emerging technologies to market across the physical security, cybersecurity, and software sectors. We believe that our technologies have the potential to accelerate the digital transformation of facility operations in ways that increase security, create a frictionless visitor experience, provide actionable intelligence, and reduce operating costs. We believe that, taken together, these core competencies will help us fulfill our mission and deliver enduring value for our customers.

Industry Background

We believe that most people associate security screening with airports, courthouses, and prisons. These facilities represent a small fraction of the total number of gathering spaces where mass shootings, terrorist attacks, and other forms of armed violence might occur, but they have historically had a disproportionate impact on the design and implementation of security screening technology. These specialized facilities are typically required by law to meet specific screening regulations using products built to meet technical standards designed for these environments. Many of these standards and regulations were designed in the pre-digital era of the last century.

Regulated facilities like airports and prisons usually have a local monopoly on the services they provide and therefore have historically been incentivized to emphasize technical regulatory compliance at the expense of the visitor experience. This has unfortunately led many unregulated facilities to avoid security screening altogether rather than run the risk of creating a prison-like environment for their valued customers and employees. We believe that forcing venues to choose between better security and an enjoyable visitor experience is unacceptable. We believe the solution is to deliver technology that provides both.

Security screening at most venues and facilities has historically been designed around metal detectors that require visitors to enter in single-file lines after submitting their bags and pocket contents to manual inspection. This process is usually supported by multiple security guards who perform manual bag inspections, hand wand scans, and hands-on body ‘pat downs’ to resolve the large numbers of alarms, frequently false positives, generated by the metal detectors. This complex process has numerous shortcomings:

•        Nuisance Alarm Fatigue.    Old metal detectors are not able to differentiate between weapons and harmless metallic items like phones, car keys, belt buckles, and tablets. These items generate large numbers of nuisance alarms. This problem can only be partially mitigated by emptying pockets and separately screening bags. High numbers of nuisance alarms make it difficult for even experienced, well-trained security guards to stay vigilant with every visitor.

•        Ambiguous Alarms.    When alarms occur, security guards may be confused about which visitor triggered the alarm. Even if guards correctly identify the visitor, they have no indication of where the potential threat is located on the visitor’s person. This ambiguity extends the duration, error potential, and risk level associated with manual searches to locate the threat.

•        Frequent Human Error.    Old screening technology requires careful people flow orchestration and manual processes to avoid and/or resolve nuisance alarms. There are many opportunities for even well-trained, highly motivated guards to become fatigued, or distracted, allowing weapons to slip through. Additionally, guards may be affected by unconscious bias that causes them to manually search some visitors more thoroughly than others, allowing weapons to enter undetected.

•        Frustrating Delays.    Taking time to form single-file lines, wait their turn to enter, empty pockets, separately process bags, and resolve frequent nuisance alarms creates frustrating delays for visitors at the precise moment when they should be feeling the exhilaration of arrival.

•        Invasive Contact.    Waiting in large crowds, placing one’s personal items in communal bowls and having bags and bodies touched by strangers has never been something visitors want or expect during their arrival experience. The ongoing COVID-19 pandemic has amplified visitor demand and expectations for a touchless experience and social distancing that old screening technology and processes cannot deliver.

•        High Labor Costs.    The intensively manual processes of old screening technology require large numbers of security staff. The only way to reduce wait times during peak arrival periods is to deploy equipment and guards up to the limit of what the physical space can accommodate, generating substantial variable labor expenses.

•        Transient Security Staff.    Many venues have a core set of security professionals and managers on staff. For those venues which are event based, they may hire security staff for each event. Recruiting and hiring security staff for each event can result in a wide variance in the skills and experience of staff conducting the screening.

•        Lack of Data Insights.    Traditional screening technologies provide little or no digital data analytics about the visitors passing through the systems. This forces security teams to make decisions with limited insights and prevents them from seizing potential opportunities to improve their operations.

The Old Security Screening Arrival Experience

The historical emphasis on technical detection performance using outdated standards tested in isolation has drawn attention away from performance of the screening process as a whole system. As noted above, legacy screening technologies effectively detect metal, but they also generate numerous false alarms for harmless items. To bring down the false alarm rate, security teams proactively divert metal items away from the metal detectors into manual bag check processes that are vulnerable to human frailty and relatively easy for a determined attacker to defeat. The result is a slow, frustrating process that fails to deliver the security it promises. The root causes are outdated technical standards, old analog technology, and the inability of humans to fully compensate for these deficiencies.

Evolv touchless security screening technology overcomes the limitations of old security screening technology and processes. We define touchless security screening as a screening process that reliably detects weapons and other threats in a way that allows most people to enter venues and facilities while walking at a normal pace together with their party, without requiring manual bag or body inspections.

Touchless security screening provides a range of benefits including:

•        Reliable Precision.    Our technology uses artificial intelligence to reliably detect real threats and ignore harmless items as visitors walk through side-by-side while carrying their bags, without emptying their pockets. This dramatically reduces the number of nuisance alarms.

•        Automated and Targeted.    When our system detects a potential threat, it captures a photo of the person in question and visually overlays a red outline on the area of the body or bag where the threat was detected so the security guards know exactly where to look to resolve the alarm. This reduces the potential for human error and accelerates the resolution process.

•        High Throughput.    Allowing visitors to enter while walking at a normal pace with low alarm rates makes screening with our products up to ten times faster than old screening processes. High throughput also reduces large crowds in entry areas, which can be an attractive soft target for threat actors.

•        Non-Invasive.    Fast touchless security screening allows more visitors to enjoy the natural excitement and anticipation of the arrival experience without the distraction of unwanted crowding, waiting, or touching.

•        Reduced Visitor Anxiety.    The significant reduction in wait time and the elimination of divesture of personal items reduces the anxiety of people passing through the security screening system. Additionally, families, friends and those needing assistance can pass through the system together, eliminating the need to be split up as they pass through security.

•        Improved Security Staff Experience.    Automated prompting of individuals who trigger an alert with a guard-directed image improves the ability of staff to identify the individual and location on the individual for further security inspection. Additionally, eliminating the manual bag checks reduces injuries for staff putting their hands in bags where sharp objects such as needles may be present.

•        Cost Effective.    By significantly reducing the need for manual inspections to process nuisance alarms, touchless security screening allows a smaller number of guards to safely screen a significantly larger number of visitors, resulting in significant overall savings of up to 70%.

•        Reduced Physical Footprint.    For those venues that use walk-through metal detectors, our system may significantly reduce the physical space allocated to security screening operations. Having fewer screening points reduces operational complexity and supports more focused attention by security staff. Additionally, venues can reallocate the open space created by our products to functions such as guest experience activities or food and beverage sales.

•        Continuous Improvement.    Unlike analog alternatives, our products use artificial intelligence software to classify threats based on a large and growing digital data set that makes it possible to improve detection accuracy over time.

•        Analytic Insights.    Our Evolv Insights™ analytics application provides self-serve access to insights regarding visitor flow and arrival curves, location specific performance, system detection performance and alarm statistics, and comparisons across multiple business dimensions.

Red Outline of Potential Threat Detected

Our Market Opportunity

We believe that the current macro trends in firearms ownership, mass shootings, and pandemic awareness suggest that the need for effective security screening processes has never been greater and will continue to grow for the foreseeable future.

In the United States, there are as many as 393 million privately-owned guns in circulation. In the rest of the world there are as many as 464 million guns in civilian hands and 24 countries with more than 18 civilian guns per 100 residents. According to the Gun Violence Archive, in 2020 there were 611 mass shootings in the United States, a 40% year-on-year increase and an all-time record in a year when most people were not free to gather. There are ten countries that have more violent gun-related deaths than the United States, and many countries around the world have also experienced mass shootings and other acts of intentional violence using firearms, improvised explosive devices or large tactical knives.

The COVID-19 pandemic made people into potential threats to venues and facilities in a way never seen before. Based on our experience with customers throughout the pandemic, bolstered by original consumer research we have sponsored, we believe that consumers are and will remain uncomfortable with traditional high-touch security screening processes. We believe that visitors and security staff alike will continue to prefer a fully touchless security screening process in the future.

In the fall of 2020, we sponsored an original research survey conducted by The Harris Poll to understand American consumer expectations for security screening technology. We found the following:

•        Americans are concerned about social violence, responding that they are very or somewhat concerned about mass shootings (83%), street crime (81%) and protest-related civil unrest (81%).

•        Nearly 7 in 10 (69%) Americans value the general sense of safety that physical security measures provide, and over half (54%) believe there is deterrent value in those measures.

•        Nearly 8 in 10 (79%) feel that metal detectors create long lines, and two-thirds (67%) feel that metal detectors create crowds that violate social distancing guidelines.

•        When asked to consider how specific safety and security measures affected their likelihood of returning to venues and facilities, nearly 9 in 10 (87%) Americans said they were likely to return if touchless security screening was in place.

These results closely match what we are hearing directly from our customers: that visitors value security screening in general but are very aware of the limitations of old screening technology and processes. As consumers experience our products firsthand at iconic venues and facilities, we have found that they strongly prefer it over the old approach.

We believe that many venues and facilities have reluctantly chosen to operate without security screening because of the inherent shortcomings of old screening technology. Due to these macro trends, we believe that venues and facilities that already conduct security screening will feel increasingly compelled to consider alternatives. Further, we believe that venues and facilities that have previously chosen not to implement security screening due to concerns about cost, effectiveness, or visitor experience impact will feel increasingly compelled to introduce security screening for the first time.

We believe our market opportunity has both a security screening opportunity as well as an adjacent market expansion opportunity as follows:

Security Screening Opportunity

We estimate that our current primary market opportunity is for weapon screening at venues and facilities in the following segments:

•        Large Workplaces

•        Arts & Entertainment Venues

•        Government Offices

•        Hospitality Facilities

•        Hospitals & Health Care Facilities

•        Houses of Worship

•        Educational Institutions

Using a variety of published industry reports and government data, we estimate that the above facilities together comprise nearly 400,000 sites and millions of individual thresholds where our security screening products could potentially be deployed. We estimate that this market represents over $20 billion in potential weapon screening system sales.

Most venues and facilities in our target segments do not fall under government regulations that mandate the adoption of security screening systems that conform to specific standards. We estimate that these unregulated facilities represent over 80% of the total worldwide market opportunity for security screening technology and represent the best opportunity for rapid adoption of our innovative weapon screening products.

We believe that our touchless security screening technology is poised to become the clear leader in this developing security screening market opportunity.

Adjacent Market Expansion Opportunities

We believe there are many additional opportunities for us to create new value-added applications that expand our market opportunity beyond security screening. Security screening and many other operational processes in venues and facilities are currently largely manual and analog. Our vision is to digitally transform many of these processes by adding new software applications and digital sensors to our platform. We believe our current products are establishing a foothold for our platform in the threshold area of venues and facilities. Potential future applications that could build on our presence in the threshold area include more advanced visitor analytics and identification and processing tickets or other credentials. We also see opportunities for new sensors and applications to help venues identify potential threats and guide visitors in the parking lots and other perimeter approach areas of facilities. As visitors pass the threshold to the interior of the facility, we anticipate opportunities to remove friction

from the visitor, maximize retail revenue, and provide insights that may help reduce costs over time. We call this our Digital Threshold Vision. We estimate that the market for these incremental Digital Threshold Vision opportunities increases our total market opportunity to $100 billion by 2025.

The Digital Threshold Vision

Our Growth Strategy

The key elements of our growth strategy within our target market include the following:

•        Develop Initial Customer Successes in Specific Target Metropolitan Areas

Decision-makers at our prospective customers are often professionally connected to decision-makers at other prospective customers in different vertical industries within a specific target metropolitan area. We have established a successful pattern of targeting and winning lighthouse customers in specific vertical industries, and then leveraging that success to solicit referrals at other venues and facilities across the metropolitan area in other vertical industries. We have developed a playbook for executing this pattern through orchestration of our direct sales resources and channel partners in a manner that we believe will continue to scale as we develop the available market.

•        Develop our Global Strategic OEM Partnership with Motorola Solutions

We have signed a global strategic OEM partnership with Motorola Solutions, a global leader in mission-critical communications and analytics technology. Motorola Solutions is also an investor in Evolv. Motorola Solutions will sell Motorola Solutions-branded premium products, initially using the Evolv Express platform, co-branded as “powered by Evolv Technology” through their worldwide network of over 2,000 resellers and integration partners. Additionally, we have created an integration between our platform and Motorola Solutions products. We plan to continue to assist Motorola Solutions in bringing these premium products to market through their channel partners and to assist them in delivering integrated solutions to their customers.

•        Expand and Activate Our Distribution Channels

We have a global distribution network consisting of over 30 value-added resellers covering more than 30 countries around the world. This includes global systems integrators such as Stanley Security and Johnson Controls and smaller regional resellers. Stanley Security is also an investor in Evolv. We intend to continue to develop our distribution network by adding further geographic coverage and sales capacity. We plan to continue to cultivate field level collaboration between our direct sales team and our resellers to develop the ability of the resellers to find, develop, close, and service customers independently.

•        Concentrate Marketing and Sales Effort in Specific Target Accounts in Specific Vertical Industries

Through our experience to date we have developed a proprietary list of target vertical industries, developed a list of target accounts within those industries, and identified target decision-makers in our target accounts. We believe that our target account list represents the best immediate growth opportunities for our business. Over time we plan to adjust our target account list to reflect current market conditions and the capabilities of our products. We plan to continue to execute advertising, content marketing, lead generation, and sales development activities to our target account list to create qualified sales opportunities.

•        Promote Awareness by Gathering and Leveraging Our Customer Community

Our subscription business model presents significant opportunities to bring incremental value to existing customers over time. We intend to realize this value by seeking referrals from existing customers and partners to other prospective qualified customers, selling additional capacity to existing customers, and selling new add-on products and services to existing customers. We are continuing to develop and expand our customer success function within the global revenue organization to focus on helping customers successfully deploy our products and cultivate referrals, expansion, and upsell opportunities. We are also investing in programs to help our customers connect with each other to share best practices on a regional and vertical industry basis. Our buyers are naturally collaborative on security best practices due to their vested interest in collective deterrence and the likelihood that any security event will have a negative collective impact at the metropolitan, regional or industry level.

•        Pursue Strategic Acquisitions and Partnerships

We intend to selectively pursue acquisitions and/or equity investments in businesses that represent a strategic fit and are consistent with our overall growth strategy. Such partnerships would allow us to add incremental revenue and cash flows, accelerate market penetration of our products by enabling expansion of our product portfolio, access new markets, and provide a stronger value proposition for our customers while delivering increased customer lifetime value. We believe that because of our core focus on engineering and technology development as well as our unique distribution network, we will be able to integrate and drive adoption of new technologies and capabilities acquired via strategic acquisitions.

Our Competitive Strengths

We are a disruptive innovator in the security screening industry with a mission to make the technology accessible to all venues and facilities that operate under a credible threat of armed violence. We believe our collective expertise coupled with the following competitive strengths, will allow us to maintain and extend a leadership position in next-generation security screening and expand our market opportunity:

•        Large and Growing Data Set

The vast amounts of data generated by our products constitute a large and diverse repository of digital machine learning training data for weapons and common non-threat items. This proprietary data set is essential in training our software to accurately classify a broad set of threats and non-threats under a wide variety of real-world conditions. We expect that this data set will continue to grow as our products are deployed in more venues and facilities. As the data set grows, we expect that our detection capabilities will continue to improve. In turn, we expect our customers to benefit from these improvements through regular software updates under our subscription business model. In a world where data is an increasingly decisive competitive advantage, we believe we are well positioned to deliver value to our customers in ways that competitors may be unable to match.

•        Unmatched Detection Effectiveness Based on Artificial Intelligence Software

We believe that real-world screening operations based on our products detect more actual weapon threats with fewer nuisance alarms than similar screening operations based on old walk-through metal detectors. Our systems use digital processing and artificial intelligence to differentiate between real weapon threats and harmless items like phones and keys. The Evolv Cortex AI™ software platform provides the digital brain of our solutions. Unlike analog alternatives, our solutions classify threats based on classification

models that improve over time as we process more real-world data. Evolv Cortex AI also makes it possible to integrate new kinds of sensors and data sources and integrate our solutions with other platforms and applications.

•        Differentiated and Proprietary Technology Platform

We have invested significant resources in developing proprietary and patented technologies across artificial intelligence software, cloud services, and advanced sensors to accelerate the widespread adoption of touchless security screening. These technologies serve as the foundation of our products.

Our key innovations include:

•        Technology to process RF electromagnetic wave sensor data across multiple frequencies to detect size, composition, and shape of metal objects while in motion.

•        Technology to classify and differentiate the electromagnetic signature of weapons from harmless items such as smartphones and keys.

•        Technology to isolate relevant electromagnetic signals in the presence of external interference and noise generated by environmental factors such as structural metal, wind, and other factors.

•        Technology to process hundreds of thousands of sensor data points for each individual passing through security screening system while walking at a normal pace.

•        Technology to isolate a detected threat carried by an individual among an unstructured, overlapping flow of visitors walking through the system at a normal pace.

•        Technology to isolate the spatial location of detected threats and correlate this spatial data with digital imagery to provide a clear visual indicator to help security guards quickly and intuitively resolve any system alarms.

In addition to these core detection-related innovations, we have developed a purpose-built, proprietary housing for our advanced sensor arrays that features an attractive, welcoming, and customizable industrial design and supports a wide variety of indoor and outdoor configurations. We have also created cloud services to capture and present rich analytics and insights, support remote system upgrades as new capabilities become available, and facilitate remote system diagnostics. This technology platform is the basis of our future products and is critical to enhancing our existing offerings. Elements of these technologies and processes are protected by our know-how and by multiple patents or pending patent applications.

•        Extensible Product Platform

We have designed our platform so that it will be possible to add new types of sensors, new detection algorithms, and new cloud services and analytics to support new use cases, new applications, and new product offerings. For example, we were able to rapidly respond to customer requirements during the COVID-19 pandemic by adding Elevated Body Temperature (EBT) alerts to our platform as part of the Thermal Imaging Package for Evolv Express.

We have also designed our platform with application programming interfaces (APIs) that allow integration and interoperability with complementary third-party security solutions such as biometric authentication, video management software, threat intelligence, messaging, and mass-notification systems. For example, we have used our APIs to integrate Evolv Express alerts to the Motorola Solutions Avigilon Control Center platform, as well as to deployed venue access control systems.

•        High Screening Throughput

Our unique detection methodology results in fewer nuisance alarms and allows visitors to walk through in unstructured flows, without emptying their pockets and without surrendering their bags for manual inspection. The overall result is screening that is up to ten times faster than old screening processes. The result is a visitor experience that is more similar to walking through a shoplifting prevention system at a department store than an airport security checkpoint.

•        Significant Cost Savings

Because our technology generates so few nuisance alarms and scans visitors so quickly, far fewer security guards and equipment is required. The total cost per visitor scanned is up to 70% lower with our products, allowing venues to reduce overall operational costs and making security screening financially feasible at more venues and events.

•        Digital Analytic Insights

Each of our products records over five hundred thousand points of anonymous digital data for each individual visitor. This flood of data allows us to generate analytics that appear in our Evolv Insights™ application. Evolv Insights™ provides self-serve access, insights regarding visitor flow and arrival curves, location specific performance, system detection performance and alarm statistics, and comparisons across multiple business dimensions. In the future, we will also be able to help customers correlate data from our sensors with data from other sensors, venue enterprise data, and other external data sources to provide deeper insights.

Evolv Insights™ Analytics Application

Our customers tell us that the analytics we provide are valuable because they have not previously been available at all or were too costly and time consuming to acquire through manual methods. As we add new kinds of sensors to our platform and integrate new external sensors and data sources with our data, we believe we will be able to deliver increasingly pivotal insights that will help make facilities even safer, more enjoyable for visitors, and more profitable for their owners and operators.

•        Key Strategic Global Partners

We have signed global strategic partnership agreements with Motorola Solutions, Stanley Security, and Johnson Controls. Each of these strategic partners has a globally recognized brand, a large global distribution network, global systems integration and support capabilities, and global customer networks full of potential prospects for our touchless security screening solutions. Both Motorola Solutions and Stanley Security are investors in Evolv. We believe that these strategic partners will provide us with significant leverage and global reach that will allow us to rapidly scale our business and guide customers to success.

•        Global Distribution Capabilities

We have developed a global distribution network consisting of over 30 value-added resellers covering over 30 countries around the world. Our resellers, who have extensive experience in physical security technologies and processes, provide marketing, sales, systems integration, and local support services for customers across an array of vertical markets and regions. They also bring an existing base of customers into which we can drive awareness of and ultimately sell our touchless security screening products. Whenever possible we seek to form relationships with the leading resellers in each region in order to secure access to the most valuable existing customer relationships and the best talent pool available in each region.

•        Visionary and Experienced Management Team

Our management team and board of directors blend a range of skills and backgrounds from technology, cybersecurity, materials science, artificial intelligence, law enforcement and real estate. Our advisors are renowned industry leaders with experience at the Secret Service, the FBI, the military, the TSA, the Department of Homeland Security, the Intelligence Community and Congress. In engineering, we are led by accomplished and visionary technologists and scientists who have many years of experience in relevant fields. Our commercialization efforts are managed by individuals with prior successes in building and growing both direct and indirect, channel-driven sales organizations.

•        Self-Reinforcing Adoption Cycle

We believe that as we acquire more customers and deploy more of our products, we gather more digital data that helps us improve the detection accuracy and performance of our systems and provide deeper analytic insights to our customers. As the accuracy and analytic insight of our systems increases, we believe more prospective customers will be attracted to our products and more engaged prospects will choose to purchase our products. We anticipate that this cycle will continue to operate in the future, creating ongoing competitive advantages for us and for our reseller partners.

Our Products

Since our founding in 2013, we have developed an extensive portfolio of proprietary technologies that form the foundation of our integrated security screening products, which are comprised of artificial intelligence software, cloud services, and advanced sensors.

Evolv Express

Evolv Express

Our flagship product is Evolv Express, a touchless security screening system designed to detect firearms, improvised explosive devices, and tactical knives in unstructured people flows. Evolv Express supports a maximum screening throughput of 3,600 people per hour. Evolv Express became commercially available in in October 2019.

The Evolv Thermal Imaging Package for Evolv Express is an add-on product that integrates elevated body temperature screening into the Express touchless security screening process. This package also includes the Evolv TempCheck™ software application. The Thermal Imaging Package became commercially available in July 2020.

Evolv Thermal Imaging Package for Evolv Express

Evolv Edge

Evolv Edge is the legacy predecessor to our Evolv Express product. Evolv Edge supports structured, single-file people flows. It provides maximum screening throughput of approximately 800 people per hour. The primary distinguishing feature of Edge is that it is designed to detect non-metallic explosive devices in addition to complete improvised explosive devices, firearms, and tactical knives. Evolv Edge became commercially available in 2017. While Evolv Edge® is an important part of our legacy, we do not expect it to be a significant portion of our growth plan.

Licensing Model

We primarily sell our solutions under a subscription agreement that bundles our artificial intelligence software, cloud services, and advanced sensor equipment. We sometimes refer to this subscription as “security-as-a-service”. The security-as-a-service subscription agreement gives customers access to our solution for a defined time, usually with a multi-year term, annual payment installments, and no right of cancellation. In some situations, we also sell our products under a purchase plus subscription agreement by which the customer agrees to pay a one-time upfront fee for the equipment and a mandatory annual subscription fee for access to our software and cloud services. We do not currently directly offer short term rental agreements for our solutions, but we allow certain reseller partners to offer rental terms to certain customers under certain conditions.

Our Customers

Our customers include many iconic venues across a wide variety of industries including major sports leagues, notable performing arts and entertainment venues, major tourist destinations and cultural attractions, large industrial workplaces, school districts, and prominent houses of worship.

Our customer contracts typically range in size from $100,000 to $500,000. At least 99% of our customer agreements include non-cancelable multi-year commitments. No single customer has accounted for more than 12% of our total revenue from inception to date.

Research and Development

We believe that the touchless security screening market is poised for rapid technological advancements across software, cloud services, and sensors. We invest significant resources into ongoing research and development programs because we believe our ability to maintain and extend our market position depends, in part, on breakthrough technologies that offer a unique value proposition for our customers and differentiation versus our competitors. Our research and development team, which is responsible for both the development of new products and improvements to our existing product portfolio, consists of talented and dedicated engineers, technicians,

scientists, and professionals with experience from a wide variety of the world’s leading physical security, cybersecurity, and software technology organizations. Our primary areas of focus in research and development include, but are not limited to:

1.      Enhanced system usability, operator ergonomics, and mobility to drive further efficiencies.

2.      Continued improvement of the detection algorithm performance including assessing the ability to detect new threats.

3.      Additional system sensors and fusion with a variety of other data inputs to expand venue insights, analytics applications and operational performance.

4.      New applications that digitally transform operations in and adjacent to the arrival experience at venues and facilities.

5.      Integrations into venue security infrastructure and operating systems.

Sales and Marketing

We sell our security screening products through both our own direct sales force and through a global distribution network consisting of over 30 resellers covering over 30 countries around the world. Our resellers resell our products to our customers, for whom they also perform installation, systems integration, and local support and maintenance services, with backup services provided by our internal support teams. Many resellers offer third-party physical security products including cameras, access control systems, and video monitoring systems in their respective territories and regions, which provides an opportunity to cross-sell our touchless security screening products to a broad, existing customer base that has purchased these other products. To augment the reach of our distribution network, we also intend to grow our direct sales efforts focused primarily on serving major accounts and expanding our footprint.

Our marketing strategies are focused on supporting sales growth by (i) driving awareness; (ii) developing comprehensive sales and marketing content, tools, and campaigns for each stage of the sales process; and (iii) scaling those campaigns via our global distribution network. We drive awareness for Evolv, our security screening products, and our customers’ successes through public relations and communications efforts that span mainstream, business, and trade press across the security sector generally and in key verticals such as tourist sites, performing arts and entertainment, theme parks, industrial workplaces, municipal government, and professional sports. Our internal marketing team develops content in multiple formats and delivery methods to facilitate marketing campaigns and sales enablement.

Manufacturing and Suppliers

Our physical products are manufactured via a third-party contract manufacturer with international quality certifications, such as ISO9001:2015. We design the products and processes and internally manufacture the initial engineering prototypes. Our internal manufacturing and supply chain teams work collaboratively with both our internal engineering department and our third-party contract manufacturers to scale up the prototypes for commercialization through a phase gate product launch process. Our third-party contract manufacturer provides a variety of services including sourcing off-the-shelf components, manufacturing custom components/assemblies, final product assembly and integration, end of line testing and quality assurance per our specifications, material and finished goods inventory, and direct global shipping to Evolv customers.

We initially manage the supply chain for key components and materials, and then set up supply agreements in conjunction with our contract manufacturer to ensure stable supply and redundancy where applicable. Component purchasing is managed by our contract manufacturer’s sourcing team under a vendor list approved by us to leverage the buying power of their global scale. All Evolv products are built to Evolv’s specification, work instructions and testing protocols. Inventory levels are managed with our manufacturing partners to ensure an adequate supply is on hand to meet business forecasts.

Intellectual Property

Our ability to drive innovation in the security screening market depends in part upon our ability to protect our core technology and intellectual property. We attempt to protect our intellectual property rights, both in the United States and abroad, through a combination of patent, trademark, copyright and trade secret laws, as well as nondisclosure and invention assignment agreements with our consultants and employees and through non-disclosure agreements with our vendors and business partners. Unpatented research, development, know-how and engineering skills make an important contribution to our business, but we pursue patent protection when we believe it is possible and consistent with our overall strategy for safeguarding intellectual property.

As of March 31, 2021, we own or co-own 6 issued United States patents, 7 issued foreign patents and have 9 pending or allowed patent applications. In addition, we have 2 issued United States trademarks, 5 pending United States trademark applications, 9 foreign trademarks and 8 pending foreign trademark application. Evolv’s patents and patent applications are directed to, among other things, security screening, threat detection and discrimination, imaging systems and related technologies. In addition to patents owned or co-owned by Evolv, the Company has in-licensed ninety-five patents, including but not limited to metamaterials, RF imaging, compressive sensing, and signal processing, for security related applications.

Employees

Our employees are critical to our success. As of March 31, 2021, we had 84 full-time employees based primarily in the greater Boston, Massachusetts area. We also engage numerous consultants and contractors to supplement our permanent workforce. A majority of our employees are engaged in research and development and go-to-market related functions. We consider our relationship with our employees to be in good standing. None of our employees are subject to a collective bargaining agreement or represented by a labor union.

Facilities

Our corporate headquarters is located in an approximately 15,100 square foot facility that we lease in Waltham, Massachusetts. Our lease of this facility expires on June 30, 2021. We are currently pursuing new office space in Waltham, Massachusetts and are negotiating to sub-lease new office space that is sufficient for our current and planned needs, as well as options to expand on commercially reasonable terms.

Government Regulations

We are subject to various laws, regulations, and permitting requirements of federal, state, and local authorities, related to health and safety, anti-corruption and export controls. We believe that we are in material compliance with all such laws, regulations, and permitting requirements.

Export and Trade Matters

We are subject to anti-corruption laws and regulations imposed by governments around the world with jurisdiction over our operations, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010, as well as the laws of the countries where we do business. We are also subject to various trade restrictions, including trade and economic sanctions and export controls, imposed by governments around the world with jurisdiction over our operations. For example, in accordance with trade sanctions administered by the Office of Foreign Assets Control and the U.S. Department of Commerce, we are prohibited from engaging in transactions involving certain persons and certain designated countries or territories, including Cuba, Iran, Syria, North Korea and the Crimea Region of Ukraine. In recent years, the United States government has a renewed focus on export matters. For example, the Export Control Reform Act of 2018 and regulatory guidance thereunder have imposed additional controls and may result in the imposition of further additional controls, on the export of certain “emerging and foundational technologies.” Our current and future products may be subject to these heightened regulations, which could increase our compliance costs.

See “Risk Factors — Failure to comply with applicable anti-corruption legislation and other governmental laws and regulations could result in fines, criminal penalties and materially adversely affect its business, financial condition and results of operations” for additional information about the environmental, health and safety laws, and regulations that apply to our business.

Competition

Evolv has experienced, and expects to continue to experience, competition from a number of companies, including other vendors of security screening systems. A variety of security screening technologies compete with our proprietary technologies, including, but not limited to walk-through metal detectors, handheld metal detector wands, passive or active weapon screening systems based on millimeter wave or terahertz imaging technology.

We believe that we provide the only proven touchless security screening products addressing customer requirements around throughput, visitor experience, and cost effectiveness. We are well-positioned to compete in our industry based on these core competencies and on the following competitive strengths:

•        Proven threat detection performance with low nuisance alarm rate

•        High throughput and superior visitor experience

•        Expandable digital platform able to provide analytics and insight to support customer operations, along with the ability to add additional capability over time

•        We have established commercial momentum as a provider of touchless security screening whereas a number of other vendors that claim capabilities in this area have struggled to do so

In addition, our deep technology portfolio and wealth of experience working with customers enables us to compete across a wide range of vertical markets.

Legal Proceedings

We are from time to time subject to various claims, lawsuits, and other legal and administrative proceedings arising in the ordinary course of business. We are not currently engaged in any litigation or criminal proceedings.

•        Evolv is the larger entity based on historical revenues and business operations; and

•        The Combined Company assumed Evolv’s name.

Under this method of accounting, NHIC is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination is treated as the equivalent of the Combined Company issuing stock for the net assets of NHIC, accompanied by a recapitalization, and the historical financial statements of Evolv became the historical financial statements of the Combined Company upon the closing of the Business Combination.

COVID-19

In March 2020, the World Health Organization declared the outbreak of COVID-19 a pandemic. It is not possible to accurately predict the full impact of the COVID-19 pandemic on our business, financial condition and results of operations due to the evolving nature of the COVID-19 pandemic and the extent of its impact across industries and geographies and numerous other uncertainties. For example, we face uncertainties about the duration and spread of the outbreak, additional actions that may be taken by governmental entities, and the impact it may have on the ability of us, our customers, our suppliers, our manufacturers and our other business partners to conduct business. Governments in affected regions have implemented, and may continue to implement, safety precautions which include quarantines, travel restrictions, business closures, cancellations of public gatherings and other measures as they deem necessary. Many organizations and individuals, including our company and employees, are taking additional steps to avoid or reduce infections, including limiting travel and staying home from work. These measures are disrupting normal business operations and have had significant negative impacts on businesses and financial markets worldwide. We continue to monitor our operations and government recommendations and have made modifications to our normal operations because of the COVID-19 pandemic, including requiring most non-engineering or operations-related team members to work remotely, utilizing heightened cleaning and sanitization procedures, implementing new health and safety protocols and reducing non-essential travel.

The COVID-19 pandemic initially caused us to experience several adverse impacts, including extended sales cycles to close new orders for our products because many of our customers were required to completely or partially shut down facilities, delays in shipping and installing orders due to closed facilities and travel limitations and delays in collecting accounts receivable.

As the pandemic shutdown orders began to be relaxed and some segments of our prospective customer set began to formulate and execute their reopening plans, we began to see increased demand for touchless security screening processes of the kind enabled by our products. We also experienced new demand for rapid body temperature screening as part of the pandemic security screening process. In response to customer requests, we brought to market the Evolv Thermal Imaging Package™ for Evolv Express®™, a new add-on product developed in approximately 90 days during the pandemic lockdown. While ongoing demand for this product is uncertain, we believe our ability to integrate thermal screening into our product in a compressed time frame is an indicator of our innovation capabilities and of the potential for new future add-on products based in additional sensors and data types.

The rapid development and uncertainty of the impacts of the COVID-19 pandemic precludes any prediction as to the ultimate impact of the COVID-19 pandemic on our business. However, the COVID-19 pandemic, and the measures taken to contain it, continue to present material uncertainty and risk with respect to our performance and financial results. In particular, venues and facilities across an array of vertical markets are temporarily reducing capital expenditure budgets globally as they seek to preserve liquidity to ensure the longevity of their own operations, which in turn may lead to reductions in purchases of our security screening products. Further, office closures may prevent organizations from reaching typical utilizations of our security screening products, resulting in reductions in purchases of add-on products and expansion units. Additionally, the COVID-19 pandemic may contribute to facility closures at our third-party contract manufacturer and key suppliers, causing delays and disruptions in product manufacturing, which could affect our ability to ship products purchased by our customers in a timely manner. Disruptions in the capital markets as a result of the COVID-19 pandemic may also adversely affect our business if these impacts continue for a prolonged period and we need additional liquidity.

In the short-term, we have taken, and will continue to take, actions to mitigate the impact of the COVID-19 pandemic on our cash flow and results of operations and financial condition. While we are experiencing supply chain challenges, we do see this being overcome in the near future. In the long-term, we believe that the COVID-19 pandemic will encourage organizations to reassess their security screening processes and may continue to accelerate their adoption of solutions such as touchless security screening, which could create additional demand for our products.

Additional information regarding COVID-19 risks appears in the “Risk Factors” section of this proxy statement/prospectus.

Key Factors Affecting Our Operating Results

We believe that our performance and future success depend on many factors that present significant opportunities for us but also pose risks and challenges, including the following:

Adoption of our Security Screening Products

We believe the world will continue to focus on the safety and security of people in the places where they gather. Many of these locations are moving toward a more frictionless security screening experience. We are well-positioned to take advantage of this opportunity due to our proprietary technologies and global distribution capabilities. Our products are designed to empower venues and facilities to realize the full benefits of touchless security screening, including a rapid visitor throughput and minimal security staff to screened visitor physical contact. We expect that our results of operations, including revenue, will fluctuate for the foreseeable future as venues and facilities continue to shift away from conventional security screening processes towards touchless security screening. The degree to which potential and current customers recognize these benefits and invest in our products will affect our financial results.

Pricing, Product Cost and Margins

To date, most of our revenue has been generated by sales of subscriptions which represented 55% and 19% of total revenue in the years ended December 31, 2020 and 2019, respectively. The remaining revenue was generated from product sales and service for our products. Going forward, we expect to sell our products in a variety of vertical industry markets and geographic regions. Pricing may vary by region due to market-specific dynamics. As a result, our financial performance depends, in part, on the mix of sales/bookings/business in different markets during a given period. In addition, we are subject to price competition, and our ability to compete in key markets will depend on the success of our investments in new technologies and cost improvements as well as our ability to efficiently and reliability introduce cost-effective touchless security screening products for our customers.

Continued Investment and Innovation

We believe that we are a leader in touchless security screening products, offering transformative technologies that enable higher throughput, a more frictionless visitor experience, and substantial cost savings through our product innovations. Our performance is significantly dependent on the investment we make in our research and development efforts and on our ability to be at the forefront of the security screening industry. It is essential that we continually identify and respond to rapidly evolving customer requirements, develop and introduce innovative new products, enhance existing products and generate customer demand for our products. We believe that investment in our security screening products will contribute to long-term revenue growth, but it may adversely affect our near-term profitability.

Components of Results of Operations

Revenue

We derive revenue from the sale of our products, subscriptions, and services. Our arrangements are generally noncancelable and nonrefundable after ownership passes to the customer. Revenue is recognized net of sales tax.

A portion of our revenue is generated through sales with our distributors. Regardless if we sell through an order received from distributor or if we sell directly to an end-use customer, the transactions are essentially structured in the same manner.

Product Revenue

We derive revenue from the sale of our products to customers which includes our Edge and Express products that contain embedded software. In addition, we also generate product revenue from sale of accessories.

Subscription Revenue

In addition to selling our products directly to customers, we also sell our products and services under bundled lease arrangements (“subscriptions”), which typically include equipment and maintenance services. The lease term is typically four years and customers pay a fixed payment for the lease of the product and service elements over the contractual term of the lease. While most of our customers pay an annual subscription fee, there are also quarterly payment arrangements.

Services Revenue

We also provides maintenance, installation, and training services for our products. Revenue for installation and training is recognized upon the completion of these services. Maintenance services consists of technical support, bug fixes and threat updates. Maintenance revenue is recognized ratably over the period of the engagement.

Cost of Revenue

We recognize cost of revenues in the same manner that the related revenue is recognized.

Cost of Product Revenue

Cost of product revenue consists primarily of costs paid to third party manufacturers, labor costs, and shipping costs.

Cost of Subscription Revenue

Cost of subscription revenue consists primarily of labor costs, shipping costs, and depreciation related to leased units.

Cost of Services Revenue

Cost of services revenue consists primarily of labor, spare parts, shipping costs, and field service repair costs. Cost of service revenue related to maintenance consists primarily of labor, spare parts, shipping costs, field service repair costs, equipment, and supplies.

A provision for the estimated cost related to warranty is recorded to cost of revenue at the time revenue is recognized as necessary. Our estimate of costs to service the warranty obligations is based on historical experience and expectations of future conditions. As of December 31, 2020 and 2019, we recorded a warranty accrual of less than $0.1 million and $0.1 million, respectively.

Gross Profit and Gross Margin

Our gross profit is calculated based on the difference between our revenues and cost of revenues. Gross margin is the percentage obtained by dividing gross profit by our revenue. Our gross profit and gross margin are, or may be, influenced by a number of factors, including:

•        Market conditions that may impact our pricing;

•        Product mix changes between established products and new products;

•        Our cost structure for manufacturing operations, including contract manufacturers, relative to volume, and our product support obligations; and

•        Our ability to maintain our costs on the components that goes into the manufacture of our product.

We expect our gross margins to fluctuate over time, depending on the factors described above.

Research and Development

Our research and development expenses represent costs incurred to support activities that advance the development of innovative security screening technologies, new product platforms, as well as activities that enhance the capabilities of our existing product platforms. Our research and development expenses consist primarily of salaries and bonuses, employee benefits, prototypes, design expenses, consulting and contractor costs and an allocated portion of overhead costs. We expect research and development costs will increase on an absolute dollar basis over time as we continue to invest in our advancing our portfolio of security screening products.

Sales and Marketing

Sales and marketing expenses consist primarily of employee-related costs for individuals working in our sales and marketing departments, costs related to trade shows and events and an allocated portion of overhead costs. We expect our sales and marketing costs will increase on an absolute dollar basis as we expand our headcount and initiate new marketing campaigns.

General and Administrative

General and administrative expenses consist primarily of personnel-related expenses associated with our executive, finance, legal, information technology and human resources functions, as well as professional fees for legal, audit, accounting and other consulting services, and an allocated portion of overhead costs. We expect our general and administrative expenses will increase on an absolute dollar basis as a result of starting to operate as a public company, including expenses necessary to comply with the rules and regulations applicable to companies listed on a national securities exchange and related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, as well as increased expenses for general and director and officer insurance, investor relations, and other administrative and professional services. In addition, we expect to incur additional costs as we hire additional personnel and enhance our infrastructure to support the anticipated growth of the business.

Interest Expense

Interest expense includes cash interest paid on our long-term debt as well as amortization of deferred financing fees and costs.

Loss on Extinguishment of Debt

In August 2019 and September 2019, Evolv entered into Convertible Note Purchase Agreements (the “2019 Convertible Notes”) with existing investors. The 2019 Convertible Notes provided a conversion option whereby upon the closing of a specified financing event, the 2019 Convertible Notes would automatically convert into shares of the same class and series of capital stock that Evolv issued to other investors in the financing at a conversion price equal to 85% of the price per share paid by the other investors. In October 2019, a specified financing event occurred and we recorded a loss on extinguishment of debt in the consolidated statements of operations and comprehensive loss for the year ended December 31, 2019.

In December 2020, we entered into a Credit Agreement with JPMorgan Chase Bank, N.A. (“Credit Agreement”). Proceeds from the debt were used to repay the outstanding balance of existing term loans and revolving credit with Silicon Valley Bank. Upon repayment of the outstanding amounts, Evolv recorded a loss on extinguishment of debt in the consolidated statements of operations and comprehensive loss.

Income Taxes

Our income tax provision consists of an estimate for U.S. federal and state income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and

liabilities and changes in tax law. There is no provision for income taxes for the years ended December 31, 2020 and 2019 because Evolv has historically incurred net operating losses and maintains a full valuation allowance against its deferred tax assets.

Results of Operations

Comparison of the Years Ended December 31, 2020 and 2019

The following table summarizes our results of operations for the years ended December 31, 2020 and 2019 (in thousands):

Revenue, Cost of Revenue and Gross Profit

Product

Product revenue was $1.3 million for the year ended December 31, 2020, compared to $4.2 million for the year ended December 31, 2019. Cost of product revenue was $1.2 million for the year ended December 31, 2020, compared to $4.2 million for the year ended December 31, 2019. The decrease of $2.9 million in revenue and decrease of $3.1 million in cost of revenue was primarily due to a shift from direct product sales of Evolv Edge product to subscription based sales of our Evolv Express. Gross profit increased by $0.2 million, or 289%, and gross profit margin increased by 9 percentage points. The increase in gross profit is primarily driven by our continued efforts to streamline the manufacturing process and reduce costs by introducing standardized parts into our product. We will continue to see improvement in our gross margins as we continue to engineer our product for lower cost components and as we continue to gain leverage in the market place with increased sales, we expect higher discounts from suppliers.

Subscription

Subscription revenue was $2.6 million for the year ended December 31, 2020, compared to $1.1 million for the year ended December 31, 2019. Cost of subscription revenue was $1.8 million for the year ended December 31, 2020, compared to $0.5 million for the year ended December 31, 2019. The increase of $1.5 million in revenue and increase of $1.3 million in cost of revenue was primarily due to a shift from direct product sales of Evolv Edge product to subscription based sales of our Evolv Express. Gross profit increased by $0.2 million, or 44%, and gross profit margin decreased by 21 percentage points. The increase in gross profit is primarily driven by our increased subscription revenue, while our gross profit margin decrease is due to continued investment in the manufacturing process and an increase in manufacturing personnel. The decrease in gross margin is due to the evolution of our product during the year ended December 31, 2020 as we absorbed higher cost of the components and we did not have the tooled parts in place. We will continue to see improvement in our gross margins as we continue to engineer our product for lower cost components and as we continue to gain leverage in the market place with increased sales, we expect higher discounts from suppliers.

Service

Service revenue was $0.9 million for the year ended December 31, 2020, compared to $0.6 million for the year ended December 31, 2019. Cost of service revenue was $0.5 million for each of the years ended December 31, 2020 and 2019. The increase of $0.3 million in revenue was primarily due to increased installation and training related to the Evolv Express product. Gross profit increased by $0.3 million, or 835%, and gross profit margin increased by 36 percentage points. The increase in gross profit is primarily driven by standardization of the installation and training process.

Research and Development Expenses

Research and development expenses were $15.7 million for the year ended December 31, 2020, compared to $8.5 million for the year ended December 31, 2019. The increase of $7.2 million was primarily due to increases in prototyping costs of $4.2 million, consulting fees of $2.0 million and employee related expenses of $1.0 million. The increase in employee related expenses is due to additional personnel costs resulting from additional headcount in our research and development function due to the design of Evolv Express. The increase in prototyping costs and consulting fees is due to the design of Evolv Express during the year ended December 31, 2020.

Sales and Marketing Expenses

Sales and marketing expenses were $7.4 million for the year ended December 31, 2020, compared to $6.6 million for the year ended December 31, 2019. The increase of $0.8 million was primarily due to an increase of $0.9 million in employee related expenses, professional fees of $0.3 million and other marketing expenses of $0.2 million, offset by a reduction in trade show and travel expenses of $0.6 million. The increase in employee related expenses is due to additional commissions and personnel costs resulting from additional headcount in our sales function. The increase in professional fees is related to increased consulting on ways to maximize sales and business development. The reduction in trade show and travel expenses was mainly related to COVID-19. The remaining difference resulted from other individually insignificant variations between the two periods.

General and Administrative Expenses

General and administrative expenses were $5.1 million for the year ended December 31, 2020, compared to $3.9 million for the year ended December 31, 2019. The increase of $1.2 million was primarily due to increases in employee related expenses of $0.5 million and professional fees of $1.0 million, partially offset by a decrease of $0.3 million in in facilities and recruiting fees. There was an increase in salaries and related costs as a result of expanding our administrative team. Due to the increasing size of the business and additional rounds of financing, professional fees such as attorney expenses increased. The decrease in recruiting was related to an increased recruiting effort in 2019 and the decrease in facilities was due to a reduction in depreciation on non leased equipment as certain items have fully depreciated.

Interest Expense

Interest expense was $0.4 million for the year ended December 31, 2020, compared to $0.8 million for the year ended December 31,2019. The decrease of $0.4 million was primarily due to convertible notes outstanding for a longer period of time in the year ended December 31, 2019 as compared to the year ended December 31, 2020.

Loss on Extinguishment of Debt

Loss on extinguishment was $0.1 million for the year ended December 31, 2020, compared to $0.7 million for the year ended December 31, 2019. The decrease of $0.6 million related to the conversion of the 2019 Convertible Note which resulted in a higher loss on extinguishment of the 2020 Silicon Valley Bank term loan.

Income Taxes

There is no provision for income taxes for the years ended December 31, 2020 and 2019 because Evolv has historically incurred net operating losses and maintains a full valuation allowance against its deferred tax assets. We have provided a valuation allowance for all of our deferred tax assets as a result of our historical net losses in the jurisdictions in which we operate. We continue to assess all positive and negative evidence, including our future taxable income by jurisdiction based on our recent historical operating results, the expected timing of reversal of temporary differences, various tax planning strategies that we may be able to enact in future periods, the impact of potential operating changes on our business and our forecast results from operations in future periods based on available information at the end of each reporting period. To the extent that we are able to reach the conclusion that deferred tax assets are realizable based on any combination of the above factors in any given tax jurisdiction, a reversal of all or some related portion of our existing valuation allowances may occur.

Liquidity and Capital Resources

We have incurred a net loss since our inception. We incurred net losses of $27.4 million and $19.9 million and cash outflows from operating activities of $23.3 million and $15.2 million during the years ended December 31, 2020 and 2019, respectively. As of December 31, 2020, we had $4.7 million in cash and cash equivalents. As an early stage company, we have primarily obtained cash to fund our operations through preferred stock offerings and debt instruments. We expect we will continue to need investments to support the growth of the business, continue research and development in our product platforms, and support our operations.

Since inception, we have received cumulative net proceeds from the sale of our preferred and common stock of $76.5 million to fund our operations. As of December 31, 2020, our principal sources of liquidity were our cash and cash equivalents and a $10.0 million line of credit with JPMorgan Chase Bank, N.A. (“JPM”), of which $6.5 million was unused and available to be accessed until the maturity date in December 2022.

In December 2020, we entered into the Credit Agreement, which extinguished all previous debt. Under the terms of the Credit Agreement, we received proceeds of $10.0 million (“JPM Term Loan”) with a maturity date in December 2024, and provides us with a revolving line of credit up to $10.0 million with a maturity date in December 2022. We entered into this loan to fund our operations. Interest on the JPM Term Loan is calculated as the greater of (A) Wall Street Journal Prime rate plus 2.25% and (B) 5.5%. Interest on the revolving line of credit is calculated as the greater of (A) Wall Street Journal Prime rate plus 1.25% and (B) 4.5%. In connection with this loan, we are also subject to periodic reporting requirements, and the lender has a first priority lien on all assets.

In September and December of 2020, we issued a total of $4.0 million of convertible notes. These convertible notes mature on September 25, 2023, however they convert to preferred shares upon a qualified financing. Upon a change in control event or default, the lender is entitled to receive the outstanding principal and any accrued but unpaid interest.

In January 2021, we issued a total of $30.0 million of convertible notes with a maturity date of September 2021 however they convert to preferred shares upon the closing of the Business Combination. Upon a change in control event or default, the lender is entitled to receive the outstanding principal and any accrued but unpaid interest.

As noted in the “Recent Developments”, we entered into a Merger Agreement with NHIC. In the event the that we do not complete the merger, then we expect to seek additional funding through private equity financings, debt financings or other capital sources, including collaborations with other companies or other strategic transactions. We may not be

able to obtain financing on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of our shareholders. Although management continues to pursue these plans, there is no assurance that we will be successful in obtaining sufficient funding on terms acceptable to us to fund continuing operations, if at all.

Cash Flows

Since inception, we have primarily used proceeds from issuances of preferred stock and debt instruments to fund our operations. The following table sets forth a summary of cash flows for the periods presented:

Operating Activities

During the year ended December 31, 2020 operating activities used $23.3 million primarily resulting from a net loss of $27.4 million, partially offset by non-cash adjustments of $1.9 million and $2.2 million of cash provided by changes in operating assets and liabilities. The non-cash adjustments consisted primarily of $1.1 million in depreciation and amortization and $0.7 million in stock-based compensation. The changes in operating assets and liabilities consisted primarily of cash provided by an increase of $2.3 million in deferred revenue, an increase of $2.2 million in accrued expenses and other current liabilities and an increase of $1.9 million in accounts payable, which were partially offset by an increase of $1.8 million in commission assets, an increase of $1.5 million in inventory, an increase of $0.5 million in accounts receivable and an increase of $0.4 million in prepaid expenses and other current assets. The increase in depreciation and amortization was due to an increase in the leased equipment and the increase in stock-based compensation was due to an increase in stock option grants. The changes in commission assets and deferred revenue were primarily due to a shift towards a subscription based model. The increase in accounts receivable is primarily due to the timing of payments from customers. The increase in accrued expenses and other current liabilities and accounts payable is primarily due to an increase in research and development and general and administrative expenses due to the growth in our business and anticipation of the Business Combination as well as the timing of vendor invoicing and payments. The increase in prepaid expenses and other current assets is primarily due to prepaid subscriptions and insurance.

During the year ended December 31, 2019 operating activities used $15.2 million primarily resulting from a net loss of $19.9 million, partially offset by non-cash adjustments of $2.0 million and $2.6 million of cash provided by changes in operating assets and liabilities. The non-cash adjustments primarily consisted of a $0.7 million loss on extinguishment of debt, $0.5 million in depreciation and amortization, $0.5 million in noncash interest expense and $0.3 million in stock-based compensation. The changes in operating assets and liabilities primarily consisted of cash provided by a $1.4 million increase in deferred revenue, $1.3 million from a decrease in prepaid expenses and other current assets, and $1.2 million from the increase in accrued expenses and other current liabilities, these were partially offset by an increase of $0.7 million in accounts receivable and an increase of $0.5 in commission assets. The loss on extinguishment and noncash interest expense was primarily related to the conversion of the 2019 Convertible Notes. The increase in deferred revenue and commission assets is due to an overall increase in subscription revenue when compared to the year ended December 31, 2018. The increase in accrued expenses and other current liabilities was primarily due to increases in our research and development expenses and general and administrative expenses due to the growth in our business as well as the timing of vendor invoicing and payments. The decrease in prepaid expenses and other current assets was primarily due to a decrease in prepayments to manufacturers.

Investing Activities

During the year ended December 31, 2020 and 2019 investing activities used $6.6 million and $0.7 million, respectively for the purchases of property and equipment.

Financing Activities

During the year ended December 30, 2020 cash provided by financing activities was $17.2 million primarily consisting of $25.5 million from the issuance of long-term debt, net of issuance costs, $3.0 million from the issuance of Series B-1 convertible preferred stock, net of issuance costs and $0.4 million from the exercise of stock options, partially offset by $11.5 million in net cash out flows for the repayment of long-term debt.

During the year ended December 30, 2019 cash provided by financing activities was $27.8 million primarily consisting of $22.4 million from the issuance of Series B-1 convertible preferred stock and $5.5 million from the issuance of long-term debt, net of issuance costs, and $0.7 million from financing obligations, partially offset by $0.7 million in net cash out flows for the repayment of long-term debt.

Recent Accounting Pronouncements

Refer to Note 2 of our condensed consolidated financial statements found elsewhere in this proxy statement/prospectus.

Internal Control Over Financial Reporting

In the course of preparing the financial statements that are included in this proxy statement/prospectus, management has determined that we have material weaknesses in our internal control over financial reporting. These material weaknesses primarily pertain to maintaining effective segregation of duties, timely reconciliation, analysis of certain complex, non routine transactions, maintaining effective controls over information technology general controls for systems that are relevant to the preparing of financial statements and the ability to produce financial statements on a public company timeline. We have concluded that these material weaknesses in our internal control over financial reporting occurred because, prior to this offering, we were a private company and did not have the necessary business processes, personnel and related internal controls to operate in a manner to satisfy the accounting and financial reporting timeline requirements of a public company.

In accordance with the provisions of the JOBS Act, we and our independent registered public accounting firm were not required to, and did not, perform an evaluation of our internal control over financial reporting as of December 31, 2020 nor any period subsequent in accordance with the provisions of the Sarbanes-Oxley Act. Accordingly, we cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act after the completion of this offering.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risks from fluctuations in interest rates, which may adversely affect our results of operations and financial condition. We seek to minimize these risks through regular operating and financing activities. For additional information on our variable rate debt, refer to the notes to our consolidated financial statements found elsewhere in this proxy statement/prospectus.

Interest Rate Risk

We have exposure to interest rate risk from our variable rate debt. We do not hedge our exposure to changes in interest rates. At December 31, 2020, we had $16.4 million in variable rate debt outstanding. A hypothetical 10% change in interest rates would have an immaterial impact on annualized interest expense.

Critical Accounting Policies and Significant Judgments and Estimates

Our consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, costs and expenses, and the disclosure of contingent assets and liabilities in our consolidated financial statements. We base our estimates on historical experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.

While our significant accounting policies are described in more detail in Note 2 to our consolidated financial statements appearing at the end of this proxy statement/prospectus, we believe that the following accounting policies are those most critical to the judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606. We derive revenue primarily from the sale of our products, subscriptions, maintenance, and services to customers.

In addition to selling its products directly to customers, Evolv enters into leasing arrangements (“subscriptions”) and maintenance contracts with customers. Lease terms are typically four years. Both subscription revenue and maintenance are recognized ratably over the period of the arrangement.

We also provide installation and training services for our products. Revenue is recognized upon the completion of these services.

A portion of our revenue is generated by sales in conjunction with our distributors. When we transact with a distributor, its contractual arrangement is with the distributor and not with the end-use customer. Whether we transact with a distributor and receive an order from a distributor or directly from an end-use customer, our revenue recognition policy and resulting pattern of revenue recognition is the same.

The transaction price is the amount of consideration that we expect to be entitled for providing goods and services under a contract. It includes not only fixed consideration, such as the stated amount in a contract, but also several other types of variable consideration or adjustments (generally discounts or incentives which are included as a part of the SSP estimation process). We often explicitly provide customers with discounts which reduces the transaction price; these are normally offered on a prospective basis. Other types of variable consideration are not considered significant. We do not normally provide for rights of returns to customers on product sales and, therefore, do not record a provision for returns.

Transfer of control is generally upon shipment or delivery, depending on contractual terms, and occurs when title and risk of loss transfers to the customer, which represents the point in time when the customer obtains the use of and substantially all of the benefits of the product. Our normal terms of sale are freight on board (“FOB”) destination. Occasionally, when customer acceptance of the product is required and is other than perfunctory, revenue for the entire customer arrangement is deferred until the acceptance has been received.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct product or service to a customer that are both capable of being distinct, whereby the customer can benefit from the product or service either on its own or together with other resources that are readily available, and are distinct in the context of the contract, whereby the transfer of the product or service is separately identifiable from other promises in the contract.

Multiple Performance Obligations with an Arrangement

The Company’s contracts may include multiple performance obligations when customers purchase a combination of products and services. For these arrangements, Evolv allocates the contract’s transaction price to each performance obligation on a relative SSP basis. The Company determines SSP based on the price at which the performance obligation is sold separately. If the SSP is not observable through past transactions, Evolv estimates the SSP taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligation.

Stock-Based Compensation

We measure stock-based option awards granted to employees, consultants and directors based on their fair value on the date of grant using the Black-Scholes option-pricing model. Compensation expense for those awards is recognized, net of estimated forfeitures, over the requisite service period, which is generally the vesting period of the respective award.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model, which uses the following inputs: (i) the fair value per share of the common stock issuable upon exercise of the option, (ii) the expected term of the option, (iii) expected volatility of the price of the common stock, (iv) the risk-free interest rate, and (v) the expected dividend yield. We value our common stock taking into consideration its most recently available valuation of common stock performed by third parties as well as additional factors which may have changed since the date of the most recent contemporaneous valuation through the date of grant. The exercise price of the option cannot be less than the fair market value of a share of common stock on the date of grant. The expected term of the stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla”. We have historically been a private company and lack company-specific historical and implied volatility information for its stock. Therefore, we estimate our expected stock price volatility based on the historical volatility of publicly traded peer companies and expect to continue to do so until such time as it has adequate historical data regarding the volatility of our own traded stock price. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that we have never paid cash dividends on common stock and do not expect to pay any cash dividends in the foreseeable future.

Determination of Fair Value of Common Stock

As there has been no public market for our common stock to date, the estimated fair value of our common stock has been determined by our board of directors as of the date of each option grant, with input from management, considering our most recently available third-party valuations of common stock and our board of directors’ assessment of additional objective and subjective factors that it believed were relevant and which may have changed from the date of the most recent valuation through the date of the grant. These third-party valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Our common stock valuations were prepared using either an option pricing method, or OPM. The OPM treats common stock and preferred stock as call options on the total equity value of a company, with exercise prices based on the value thresholds at which the allocation among the various holders of a company’s securities changes. Under this method, the common stock has value only if the funds available for distribution to stockholders exceeded the value of the preferred stock liquidation preferences at the time of the liquidity event, such as a strategic sale or a merger. These third-party valuations were performed at various dates, which resulted in valuations of our common stock of $0.16 per share as of December 31, 2020 and $0.15 per share as of December 31, 2019. In addition to considering the results of these third-party valuations, our board of directors considered various objective and subjective factors to determine the fair value of our common stock as of each grant date, including:

•        the prices at which we sold shares of preferred stock and the superior rights and preferences of the preferred stock relative to our common stock at the time of each grant;

•        the progress of our research and development of our products;

•        our stage of development and commercialization and our business strategy;

•        our financial position, including cash on hand, and our historical and forecasted performance and operating results;

•        the lack of an active public market for our common stock and our preferred stock; and

•        the likelihood of achieving a liquidity event, such as an initial public offering, or IPO, or sale of our company in light of prevailing market conditions.

The assumptions underlying these valuations represented management’s best estimate, which involved inherent uncertainties and the application of management’s judgment. As a result, if we had used significantly different assumptions or estimates, the fair value of our common stock and our stock-based compensation expense could have been materially different.

Once a public trading market for our common stock has been established in connection with the completion of this offering, it will no longer be necessary for our board of directors to estimate the fair value of our common stock in connection with our accounting for granted stock options and other such awards we may grant, as the fair value of our common stock will be determined based on the quoted market price of our common stock.

Valuation of Warrant Liability

We classify certain warrants to purchase shares of our common stock as liabilities on our balance sheets as these warrants are free-standing financial instruments that may require us to transfer assets upon exercise. The warrant liability associated with each of these warrants was initially recorded at fair value on the issuance date of each warrant and is subsequently remeasured to fair value at each balance sheet date. Changes in fair value of the warrants are recognized as a component of other income (expense) in our statements of operations and comprehensive loss. We will continue to adjust the liability for changes in fair value until the warrants are exercised, expire or qualify for equity classification.

We utilize the Black-Scholes option-pricing model, which incorporates assumptions and estimates to value the preferred stock warrants. We assess these assumptions and estimates on a quarterly basis as additional information impacting the assumptions is obtained. Estimates and assumptions impacting the fair value measurement include the fair value per share of the underlying redeemable preferred stock, the remaining contractual term of the warrants, risk-free interest rate, expected dividend yield and expected volatility of the price of the underlying common stock. We determine the fair value per share of the underlying preferred stock by taking into consideration our most recent sales of our preferred stock as well as additional factors that we deem relevant. We have historically been a private company and lack company-specific historical and implied volatility information of our stock. Therefore, we estimate expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. We have estimated a 0% dividend yield.

Valuation of Derivative Liability

The 2020 Convertible Notes provided a conversion option whereby upon the closing of a specified financing event the Convertible Notes would automatically convert into shares of the same class and series of capital stock of Evolv issued to other investors in the financing at a conversion price equal to 80% of the price per share of the securities paid by the other investors. This conversion option was determined to be an embedded derivative required to be bifurcated and accounted for separately from the 2020 Convertible Notes. The fair value of the derivative liability was determined based on inputs not observable in the market. Upon the closing of the 2020 Convertible Notes we determined that the probability of completing the specified financing event was 100%; thus, the value of the automatic conversion option was deemed to be 20% of the fair value of the capital stock to be issued upon conversion of the 2020 Convertible Notes, or $1.0 million. This amount represented the fair value of the embedded derivative at issuance.

Valuation of Inventory

Inventory is valued at the lower of cost or net realizable value. Cost is computed using the first-in, first-out method. We regularly review inventory quantities on-hand for excess and obsolete inventory and, when circumstances indicate, record charges to write down inventories to their estimated net realizable value, after evaluating historical sales, future demand, market conditions and expected product life cycles. Such charges are classified as cost of product revenue in the statements of operations and comprehensive loss. Any write-down of inventory to net realizable value creates a new cost basis.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Emerging Growth Company Status

The Jumpstart Our Business Startups Act of 2012, or the JOBS Act, permits an “emerging growth company” such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. The Combined Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies and our financial statements may not be comparable to other public companies that comply with new or revised accounting pronouncements as of public company effective dates. We may choose to early adopt any new or revised accounting standards whenever such early adoption is permitted for private companies.

We will cease to be an emerging growth company on the date that is the earliest of (i) the last day of the fiscal year in which we have total annual gross revenues of $1.07 billion or more, (ii) the last day of our fiscal year following the fifth anniversary of the date of the closing of this offering, (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the Securities and Exchange Commission.

Further, even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We cannot predict if investors will find our common shares less attractive because we may rely on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares and our share price may be more volatile.