Company: VEEAW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-111013
Chunk: 27

Company: VEEA INC.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 months after the Closing they were separately designated by the Transfer Agent and kept as book entry shares on
the Transfer Agent’s records and were not be eligible to be held by DTC without the Investor first notifying the Company of its
intent to transfer any such Transferred Shares to a brokerage account and/or to be held by DTC or another nominee (a “Brokerage
Transfer”). If the Investor provided such notice or otherwise has any Transferred Shares subject to a Brokerage Transfer within
6 months after the Closing, a portion of the outstanding obligations under such Investor’s Note would automatically convert into
a number of Conversion Shares equal 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 September 30, 2025,
$700,000 in aggregate principal amount of the September 2024 Notes, together with associated interest, had automatically converted upon
the occurrence of a Brokerage Transfer.

14

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 15 for further information.

Convertible Notes Payable Issued
in connection with Crowdkeep Acquisition

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.