Company: VEEAW
Filing Date: 2025-01-15
Form Type: 424B3
Source: 0001213900-25-003892
Chunk: 191

Company: VEEA INC.
Filing Date: 2025-01-15
Form: 424B3
Chunk 191
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Veea Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Years Ended December 31, 2023 and 2022</div>

3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

Accounts Receivable

Trade accounts receivable
are recognized and carried at billed amounts less an allowance for credit losses. The Company adopted the Current Expected Credit Losses
(“CECL”) guidance effective January 1, 2023. The Company maintains the allowance for estimated losses resulting from
the inability of the Company’s customers to make required payments. The allowance represents the current estimate of lifetime expected
credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts
when appropriate. The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical
levels of credit losses, and future expectations. Credit loss expense and allowance for credit losses were not significant as of, and
for the years ended, December 31, 2023 and December 31, 2022.

Inventory

The Company values inventory
at the lower of cost or net realizable value. Cost is computed using standard cost which approximates actual cost on a first-in, first-out
basis. At each reporting period, the Company assesses the value of its inventory and writes down the cost of inventory to its net realizable
value if required, for estimated excess or obsolescence. Factors influencing these adjustments include changes in future demand forecasts,
market conditions, technological changes, product life cycle and development plans, component cost trends, product pricing, physical
deterioration, and quality issues. The write down for excess or obsolescence is charged to the provision for inventory, which is a component
of Cost of Goods Sold in the Company’s consolidated statements of operations and comprehensive loss. At the point of the loss recognition,
a new, lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration
or increase in that newly established cost basis.

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.

Shipping and Handling

The Company considers shipping
and handling to customers to represent activities performed in fulfilling the contract with the customer. When shipping is charged to
the customer, the Company nets such charges against actual shipping costs incurred.