Company: VEEAW
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001213900-25-032215
Chunk: 1475

Company: VEEA INC.
Filing Date: 2025-04-15
Form: 10-K
Item: Item 7
Chunk 1475
---

debt instrument would be separated from the convertible instrument and classified as a derivative liability if the conversion feature,
were it a standalone instrument, meets the definition of a “derivative” in ASC 815, Derivatives and Hedging. When a
conversion feature meets the definition of an embedded derivative, it would be separated from the host instrument and classified as a
derivative liability carried on the consolidated balance sheet at fair value, with any changes in its fair value recognized currently
in the consolidated statements of operations. See Note 7 “Debt” for further information.

Warrants

The
Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s
specific terms and applicable authoritative guidance in FASB Accounting Standards Codification 480, “Distinguishing Liabilities
from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment
considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant
to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants
are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement”
in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires
the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while
the warrants are outstanding.

For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification,
the warrants are required to be recorded at their initial fair value on the date of issuance, and at their fair value on each balance
sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss in the Company’s
consolidated statements of operations.

 The
                                            Company accounts for the Public and Private warrants in accordance with guidance contained
                                            in ASC 815-40. Such guidance provides that because the Public warrants meet the criteria
                                            for equity treatment. Such guidance provides that because the Private warrants do not meet
                                            the criteria for equity treatment thereunder, each warrant must be recorded as a