Evolv Technologies Chief Financial Officer Mark Donohue resigned on November 21, according to a securities filing, a move that comes as the company's investigation into certain sales practices nears its conclusion. The company has hired David Rawden, a director at business consulting firm AlixPartners, as interim CFO until a successor is found. Evolv said on Thursday that Donohue will leave the company without any benefits or severance.

Donohue's departure follows the Waltham, Massachusetts-based company's termination of its CEO Peter George without cause on October 30, effective immediately, according to another filing with the U.S. Securities and Exchange Commission. Evolv appointed Chief Innovation Officer and board member Michael Ellenbogen as interim CEO and President, also effective October 30, until a permanent successor is found. According to the company, Ellenbogen, a co-founder of Evolv, previously served as CEO for seven years before assuming his current role.

Evolv also released preliminary findings of its investigation in a separate press release on Thursday. In addition to Donohue's departure, "to date, as a result of the investigation, four other employees, including personnel in the sales, accounting, and finance departments, have been terminated or have resigned," the company said.

The departures of Evolv's CFO and four unnamed employees are the latest leadership changes since the investigation was first disclosed in late October. The investigation delves into whether certain sales of its products and subscriptions "were impacted by terms and conditions outside of contracts that affected revenue recognition and other metrics, and if so, when senior company personnel became aware of these issues."

Donohue served as the company's CFO for two years. The company provides security solutions, including weapon scanners, to schools, hospitals, and sports venues, according to his LinkedIn profile. According to the company's most recent proxy filing in April, Donohue's total compensation last year reached $2.8 million, including a base salary of $400,962.

During his tenure as interim CFO, Rawden, 67, will not receive direct compensation from Evolv for his services. Evolv will pay AlixPartners a fee of $50,000 per week, plus "reasonable expenses," in exchange for Rawden's services, the company said in the filing announcing the CFO appointment. AlixPartners will also assist Evolv in "timely preparing" restated financial statements related to certain accounting inaccuracies.

During his tenure at AlixPartners, Rawden has held various interim CFO positions, including interim chief financial officer for pharmaceutical company Simtra, education program provider Academic Partnerships, and oil and gas holding company Southland Royalty, according to the filing.

Rawden will assume the interim position after a special committee of independent directors concluded that the accounting for certain transactions—including sales to one of its largest channel partners—was inaccurate due to Evolv's investigation. Among other errors, "revenue was recognized prematurely or incorrectly in financial statements prepared between the second quarter of 2022 and the second quarter of 2024," the company said in the press release on preliminary investigation findings.

The committee also concluded that "certain accounting personnel" were aware of the out-of-contract terms, and that "the relevant allegations were raised internally in July 2024 and were known to senior finance and accounting personnel," according to the press release. However, such allegations "were not escalated to the audit committee or the board of directors before Evolv filed its second quarter 2024 financial statements," nor were they communicated to the company's independent auditor, Big Four accounting firm PricewaterhouseCoopers, according to the release of the findings.

Evolv did not respond to requests for comment regarding Donohue's resignation or the departures or terminations of the four other employees resulting from the investigation. The leadership changes and personnel departures come as the company's board "has determined that new leadership is essential to move the company forward," Evolv said in its investigation announcement.

While these inaccuracies did not affect the company's cash position or debt, the transactions involved have resulted in "premature or incorrect" revenue recognition amounts between $4 million and $6 million as of June 30, the committee expects. The investigation is nearing completion, and directors do not expect the findings to change, the company said.

In the second quarter ended June 30, Evolv reported revenue of $25.5 million, a 29% increase year-over-year. The company also reported an adjusted loss of $11.1 million for the quarter, with cash and cash equivalents of $56.7 million at the end of the period and no debt, according to its earnings report.

In a separate press release, Evolv also provided a strategic update for the quarter ended September 30, with interim CEO Ellenbogen stating in the release that "the fundamentals of our business remain strong." Among other metrics, the company added approximately 465 new multi-year subscriptions for its Evolv Express product, a security screening solution, and noted that its technology is used to screen an average of 3 million visitors per day.

Both the update and the leadership changes come at a time when Evolv's weapon scanners are under increased scrutiny from regulators and the media. In SEC filings this year, Evolv also disclosed to investors inquiries from the SEC and FTC regarding its marketing practices, while reports about the effectiveness of its scanners have also proliferated.

Citing the results of a 52-page private report, NBC 5 reported earlier this month that Evolv's scanners missed certain weapons and showed mixed results for others. The company also conducted a one-month pilot of its AI-powered scanners in the New York City subway, which yielded lukewarm results, according to an October Associated Press report. During the pilot, Evolv's scanners did not identify any passengers carrying guns but produced more than 100 false alarms, the AP reported.

"As I look to the future of the company we have built together, I want to be clear about my priorities, and each one is designed to rebuild trust," Ellenbogen said in a video statement posted to the company's YouTube channel on Thursday. "I want to emphasize that none of the challenges our company faces are related to the effectiveness of our technology," he said.