NEW YORK (AP) — Amid the backdrop of a sales misconduct investigation and other looming legal troubles, security technology company Evolv is now firing its CEO.
Evolv's board of directors terminated chief executive Peter George on Wednesday, effective immediately, according to a Thursday announcement from the company. Michael Ellenbogen, Evolv’s current chief innovation officer, will step into the role as interim CEO and president.
Specifics behind George's firing were not immediately clear — but Evolv noted the dismissal was without cause and followed months of “careful planning and deliberation” by the board.
The move arrives just days after Evolv disclosed an ongoing investigation into the company's sales practices, warning shareholders to no longer rely on recent financial statements. The board acknowledged this investigation Thursday, but maintained that it had been “evaluating leadership and performance for several months — long before we became aware of any potential issues relating to the Company’s sales practices and financial reporting.”
Evolv shared initial findings this investigation last week. An internal committee found that certain employees engaged in sales “subject to extra-contractual terms and conditions,” the company noted, some of which were not shared with accounting personnel. Evolv says it's trying to determine if this misconduct impacted revenue reports and other financial metrics, and if so, when senior personnel became aware.
How high up that could be has yet to be confirmed, but Evolv said it would take any remedial actions as necessary. As of Friday's disclosure, the investigating committee estimated that sales transactions at issue resulted in premature or incorrect revenue recognition of about $4 million to $6 million through the end of June.
This is far from the first time Evolv has found itself in hot water. The company has faced other legal issues over the years, including separate federal probes into its marketing practices led by the Federal Trade Commission and the Securities Exchange Commission.
And earlier this year, investors filed a class-action lawsuit, accusing company executives of overstating the devices’ capabilities and claiming that “Evolv does not reliably detect knives or guns.”
Evolv, which provides security screening technology powered by artificial intelligence, also made headlines after a pilot testing program used its portable weapons scanners inside some New York City subway stations this summer.
That program faced ample criticism from some civil liberties groups, as well as questions of efficacy. Recently released police data showed that the scanners did not detect any passengers with firearms — and had more than 100 false alerts over the one-month test.
Following the news of George's firing, shares for Evolv were down nearly 10% Thursday afternoon.
According to the company, Evolv’s board formed a succession planning committee to evaluate leadership performance and plan for a CEO transition back in May. The company noted that it's been actively recruiting candidates for CEO, and intends to announce an official successor “expeditiously.”
In a statement Thursday, the board added that a leadership change was necessary “to improve the company’s culture as we prepare for the next phase of growth.”
Ellenbogen, the current interim CEO, is one of Evolv's co-founders and previously served as chief executive for seven years.
In August, Waltham, Massachusetts-based Evolv reported second-quarter revenue was $25.5 million, up 29% from $19.8 million for the same period last year. Its next earnings report is delayed due to the ongoing sales misconduct investigation.
FILE - The Evolv Express weapons detection system lights up red during a demonstration, May 25, 2022, in New York. (AP Photo/Mary Altaffer, File)
Indianapolis (4-4) at Minnesota (5-2)
Sunday, 8:20 p.m. EST, NBC
BetMGM NFL odds: Vikings by 5½.
Against the spread: Colts 7-1, Vikings 5-2.
Series record: Colts lead 18-8-1.
Last meeting: Vikings beat Colts 39-36 in OT in Minneapolis on Dec. 16, 2022.
Last week: Colts lost to Texans 23-20, Vikings lost to Rams 30-20.
Colts offense: overall (17), rush (11), pass (21), scoring (19).
Colts defense: overall (28), rush (30), pass (24), scoring (13).
Vikings offense: overall (19), rush (22), pass (17), scoring (7).
Vikings defense: overall (18), rush (3), pass (30), scoring (9).
Turnover differential: Colts plus-1, Vikings plus-5.
RB Jonathan Taylor. After missing three games with a sprained ankle, Taylor rushed for 105 yards and a TD on 20 carries last week against the Texans. He's been closer this year to his 2021 All-Pro form than he was the past two injury-affected seasons, and he'll face a Vikings defense that has been vulnerable on the ground the past two weeks against the Rams and the Lions.
LT Cam Robinson. Acquired in a trade this week with the Jaguars to replace injured standout Christian Darrisaw, the eighth-year veteran Robinson was working to get ready to play. David Quessenberry filled in for Darrisaw last week after he was hurt and figures to be part of the game plan, too, in protecting QB Sam Darnold.
Colts QB Joe Flacco vs. Vikings pass rush. The 17th-year veteran, who has replaced 2023 fourth overall draft pick Anthony Richardson as the starter for now, won't be fazed by the loud crowd or the aggressive and unpredictable blitzes that defensive coordinator Brian Flores calls for the Vikings. Flacco will face a defense eager to get back on track after two rough performances, including a game without a sack against the Rams. The Vikings are still third in the NFL in sacks per game.
The Colts got three key starters — Taylor, DT DeForest Buckner and LB E.J. Speed — back last week from injuries. Their biggest concern is LT Bernhard Raimann (concussion). If he's out, the Colts could start two rookies on the offensive line. ... The Vikings will have TE T.J. Hockenson make his season debut after spending the first eight weeks on the physically unable to perform list. LB Blake Cashman (toe), who missed the past two games, has a chance to return.
The Vikings set an NFL record in the previous matchup with the Colts by coming back from a 33-point deficit to win. That stopped a six-game losing streak to the Colts. ... Minnesota has never won a road game in the series, either in Baltimore or Indianapolis.
The Colts have had all eight of their games decided by six points or fewer, including five by three points or fewer. ... Flacco has only three career starts against the Vikings and none since 2017 when he was with the Ravens. ... Buckner has five sacks in three career games against the Vikings. ... Colts DE Dayo Odeyingbo had three tackles for loss, a forced fumble and a fumble recovery last week. He had two sacks against the Vikings in 2022. ... The Vikings have lost two games in a row after starting 5-0. They are the only team in the NFL this season to score in the first quarter of every game. ... Darnold has a 114.6 passer rating in three home games this season. He had a season-high 128.8 passer rating last week against the Rams. ... Vikings WR Justin Jefferson had a season-high eight catches for 115 yards last week. ... Vikings OLB Andrew Van Ginkel has four sacks in three home games this season.
Colts WR Josh Downs had a season-high 109 receiving yards and a TD last week against the Texans. In Flacco's two earlier starts this season, he was targeted a total of 21 times for 16 receptions. The Vikings allowed 279 passing yards and four TDs to Rams QB Matthew Stafford last week.
AP NFL: https://apnews.com/hub/NFL
Indianapolis Colts running back Jonathan Taylor (28) runs up field during the second half of an NFL football game against the Houston Texans, Sunday, Oct. 27, 2024, in Houston. (AP Photo/Eric Christian Smith)
Minnesota Vikings quarterback Sam Darnold reacts after being sacked for a safety by Los Angeles Rams linebacker Byron Young (not shown) during the second half of an NFL football game, Thursday, Oct. 24, 2024, in Inglewood, Calif. (AP Photo/Mark J. Terrill)
