Company: VEEAW
Filing Date: 2025-08-19
Form Type: 10-Q
Source: 0001213900-25-078177
Chunk: 25

Company: VEEA INC.
Filing Date: 2025-08-19
Form: 10-Q
Item: Part I, Item 1
Chunk 25
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atives 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 15 for further information.

On April 17, 2025,
and May 13, 2025, the Company and the majority stockholder of the Seller (“Crowdkeep Investor”), entered into two Note Purchase
Agreements (the “Crowdkeep Note Purchase Agreements”). Pursuant to the Crowdkeep Note Purchase Agreements, the Crowdkeep Investor
loaned to the Company an aggregate of $1,000,000 in two tranches (the “Crowdkeep Loans”), of which $500,000 was provided on
April 17, 2025 and $500,000 was provided on May 13, 2025. In connection with the entry into the Crowdkeep Note Purchase Agreements the
Company issued to the Crowdkeep Investor unsecured convertible promissory notes (the “Crowdkeep Convertible Notes”). The Crowdkeep
Convertible Notes have an aggregate principal amount of $1,000,000, and the interest under the Crowdkeep Convertible Notes accrues at
an annual rate of 8%. The maturity date of the Crowdkeep Convertible Notes are April 17, 2026, and May 13, 2026, respectively.

Pursuant to the terms of the Convertible
Notes, upon an event of default, the outstanding principal amount of the applicable Crowdkeep Convertible Note, plus accrued but unpaid
interest, will become immediately due and payable in full. Events of default include failure to pay any principal or interest amounts
under the Crowdkeep Convertible Notes, failure to perform covenants in the Crowdkeep Convertible Notes and certain bankruptcy and insolvency
conditions of the Company. The Company may prepay all or any portion of the Crowdkeep Convertible Notes at any time. The Crowdkeep Convertible
Notes are convertible, in whole or in part, into shares of Common Stock (the “