Company: VEEAW
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032215
Chunk: 954

Company: VEEA INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 3
Chunk 954
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4.18% 
     3.79%
  
    Interest rate 
     6.49% 
     7.33%

    Year
    ended December 31,
    2024 
  
    Balance at January 1, 2024$
    - 
  
    Initial value, September 13,
    2024 
     900,933 
  
    Change in fair value 
     (607,067)
  
    Balance at December 31, 2024 
    $293,866 

F-36

Veea
Inc. and Subsidiaries

Notes
to the Consolidated Financial Statements 

For
the Years ended December 31, 2024 and 2023

Earn-out
Share Liability

Following the closing of the Business Combination, holders of certain capital
stock of Private Veea immediately prior to the closing will have the contingent right to receive up to 4.5 million additional shares of
the Company’s common stock  if certain trading-price based milestones of the Company’s common stock are achieved or a
change of control transaction occurs during the ten-year period following the Closing. The Company’s obligation to issue the earnout
shares is recorded as a contingent liability (the “Earn-Out Share Liability”) in the Company’s financial statements.
The initial value of the contingent earnout share liability of $53.6 million is recorded as a transaction cost within operating expenses
for the year ended December 31, 2024. The fair value of the Earn-out Share Liabilities was estimated using Monte Carlo simulation utilizing
assumptions related to the contractual term of the instruments, estimated volatility, the price of our common stock, and the risk-free
rate. A significant driver of the value of the Earn-out Share Liability at the close of the Business Combination was our closing stock
price on September 13, 2024, which was $12.00.

The following table presents the changes
in fair value of the earnout liabilities:

    Year ended December 31, 2024 
  
    Liability at January 1, 2024 
    $- 
  
    Initial value, September 13, 2024 
     53,600,000 
  
    Change in fair value 
     (38,040,000)
  
    Balance as of December 31, 2024 
    $15,560,000 

The
key inputs for the Earn-out Share Liability were as follows at September