Company: VEEAW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-111013
Chunk: 173

Company: VEEA INC.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 173
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 five-step approach as defined in ASC 606, “Revenue from
Contracts with Customers”, in determining the amount and timing of revenue to be recognized: (1) identify the contract with
a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction
price to the performance obligations in the contract; and (5) recognize revenue when a corresponding performance obligation is satisfied.
Most contracts with customers are to provide distinct products or services within a single contract. However, if a contract is separated
into more than one performance obligation, the total transaction price is allocated to each performance obligation in an amount based
on the estimated relative standalone selling price.

For licenses of technology,
recognition of revenue is dependent upon whether the Company has delivered rights to the technology, and whether there are future performance
obligations under the contract. Revenue from non-refundable upfront payments is recognized when the license is transferred to the customer
and the Company has no other performance obligations. Revenue for licenses delivered under a subscription model having terms between one
and twelve-months are recognized over time. Subscription revenue is generated through sales of monthly subscriptions. Customers pay in
advance for the licenses and subscriptions. Revenue is initially deferred and is recognized using the straight-line method over the term
of the applicable subscription period.

Cost of Goods Sold

Cost of goods sold consists
primarily of the cost of finished goods, components purchased for manufacturing and freight. Cost of goods sold also includes third-party
vendor costs related to cloud hosting fees.

Operating Expenses

We classify our operating
expenses into the following categories:

    ●
    Product development expenses. Product development expenses primarily consist of employee compensation, employee benefits, stock-based compensation related to technology developers and product management employees, as well as fees paid for outside services and materials.

    ●
    Sales and marketing expenses. Sales and marketing expenses consist of compensation and other employee-related costs for personnel engaged in selling, marketing and sales support functions. Selling expenses also include marketing and the costs associated with customer evaluations. The Company does not currently incur advertising costs.

    ●
    General and administrative expenses. General and administrative expenses consist of compensation expense (including stock-based compensation expense) for employees and executive management, and expenses associated with finance, tax, and human resources. General and administrative expenses also includes transaction costs, expenses associated with facilities, information technology, external professional services, legal costs and settlement of legal claims and other administrative expenses.

    ●
    Depreciation and