Company: VEEAW
Filing Date: 2025-05-21
Form Type: 10-Q
Source: 0001213900-25-046124
Chunk: 19

Company: VEEA INC.
Filing Date: 2025-05-21
Form: 10-Q
Item: Part I, Item 1
Chunk 19
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 to the number of Transferred Shares subject to such Brokerage Transfer, and the lock-up period for
such Conversion Shares would be extended for an additional 6 months to 12 months after the Financing Closing. As of March 31, 2025, $750,000
in aggregate principal amount of the September 2024 Notes, together with associated interest, had automatically converted upon the occurrence
of a Brokerage Transfer.

11

The Company reviewed the conversion
feature granted in the notes under ASC 815, “Derivatives and Hedging” (“ASC 815”), and concluded that the
conversion price was based on a variable (enterprise value) that was not an input to the fair value of a “fixed-for-fixed”
option as defined under ASC 815 - 40 and is therefore considered a conversion option liability that should be bifurcated from the debt
host. As the fair value of the conversion option liability exceeded the net proceeds received, in accordance with ASC 470-20, the Company
recorded the conversion option liability at fair value with the excess of the fair value over the net proceeds received recognized as
a loss in earnings. See Note 14 for further information.

8 - INVESTMENTS

The Company accounts for its private
company investments without readily determinable fair values under the cost method. These investments, for which the Company is not able
to exercise significant influence over any one individual investee, is measured and accounted for using an alternative measurement basis
of a) the security’s carrying value at cost, b) less any impairment and c) plus or minus any qualifying observable price changes.
Observable price changes or impairments recognized on the Company’s private company investments would be classified as a Level
3 financial instrument within the fair value hierarchy based on the nature of the fair value inputs. Any adjustments to the carrying
values are recognized in other income, net in the Company’s consolidated statements of operations and comprehensive loss. As of
December 31, 2024, the Company performed the qualitative assessment for impairment of its investments. Based on this qualitative assessment,
impairment indicators were present for one of its investments; therefore, the company performed an analysis to estimate its fair value
and recognized an impairment loss of $216,278. As of March 31, 2025, there were no indicators of impairment. The carrying value of the
Company’s private company investments as of March 31, 2025 and December 31, 2024, was $235,